Farty Sou Spirit Lamp Development Co., Ltd. made false and misleading presentations in its advertisements and on its circulars and packaging in violation of the Fair Trade Law
Case:
Farty Sou Spirit Lamp Development Co., Ltd. made false and misleading presentations in its advertisements and on its circulars and packaging in violation of the Fair Trade Law
Key Words:
circulars and packaging, false and misleading advertisements
Reference:
Fair Trade Commission Decision of December 21, 2000 (the 476th Commissioners' Meeting); Disposition (89) Kung Ch'u Tzu No. 223
Industry:
Other Manufactured Chemical Products Manufacturing Industry (1890)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. A complaint filed against Farty Sou Spirit Lamp Development Co., Ltd. ("Farty Sou") in 1996 alleged that the company violated Articles 20 and 21 of the Fair Trade Law. But in its 22 October 1996 ruling, the Fair Trade Commission (the Commission) found that the allegations were groundless. However, Farty Sou's claim newly that "in its 22 October 1996 letter, the Fair Trade Commission found that Farty Sou's butter oil lamps were produced from genuine butter oil", carried in media and on product packaging and inner cartons, showed that the company intentionally used the Commission's public authority and credibility to mislead consumers. According to a 1993 indictment issued by the Chang Hua District Prosecutors' Office that reads "(2) According to an authentication of the oil lamp and candle manufacturing process conducted on-site, to palm oil (10%), hydrogenised palm oil (in solid form) (90%) was added, and to that, butter fragrance (0.1%) was added, "the main raw material of Fart Sou's butter oil lamps was not butter oil but palm oil to which butter fragrance was added. Therefore, Farty Sou intentionally misquoted the 22 October 1996 letter of the Commission with the purpose of causing people to make mistaken differentiations. Its conduct was in violation of Article 21 of the Fair Trade Law.
2. At the 257th Commissioners' Meeting, the Commission found that in the absence of other factual evidence proving otherwise, the Fair Trade Law had not been violated by Farty Sou. Farty Sou argued subjectively that in the above letter it was found that oil products produced from palm oil to which hydrogenised palm oil (in solid form) was added also constituted a kind of butter oil, that the company had been totally consistent with the definition and description of butter oil in the relevant literature, and that [its product] did constitute a kind of butter oil. Farty Sou also argued that according to the Commission's letter, the company's use of the words Farty Sou butter oil lamp on its lamps did not constitute false advertising, and that based on its objective interpretation of the letter, the Commission had found that the Farty Sou butter oil lamps produced by adding hydrogenised palm oil (in solid form) to palm oil did constitute a kind of butter oil lamp. It therefore argued that the lamps could be sold under the name butter oil lamp.
3. In its 22 October 1996 letter ref. (85) Kung Ts'an Tzu No. 84124391-007, the Commission stated that Farty Sou's use of the name 'butter oil lamp' could not be said to constitute false advertising. But when Farty Sou claimed in media and on product packaging and inner cartons that [its butter oil lamps] had been "produced from genuine butter oil based on a 22 October 1996 letter of the Fair Trade Commission", the company caused consumers to mistakenly think that the Commission verified that its lamps were produced from genuine butter oil. Although the Commission stated in its letter that Farty Sou had not violated Article 21 of the Fair Trade Law prohibiting enterprises from making false or misleading presentations on the advertising of products, it verified neither the content, the production process, nor the quality of the lamps. After weighing Farty Sou's motives, the damage caused, the circumstances of the violation, the scale of the operations, and evidence of repentance, the Commission ordered the company to immediately cease the offending conduct and imposed an administrative fine of NT$100,000 pursuant to the forepart of Article 41 of the Fair Trade Law.
Appendix:
Farty Sou Spirit Lamp Development Co., Ltd.'s Uniform
Invoice Number: 86955779
Summarized by: Ho Yin-ru; Supervised by: Yeh Tien-fu