A complaint alleging P'ai Chin Han Co. Ltd. engaged in false advertising in violation of the Fair Trade Law
Case:
A complaint alleging P'ai Chin Han Co. Ltd. engaged in false advertising in violation of the Fair Trade Law
Key Words:
hydrotherapy, Department of Health, medical practices, false advertising
Reference:
Fair Trade Commission Decision of September 12, 2000 (the 462nd Commissioners' Meeting); Disposition (89) K'ung Ch'u Tzu No. 154
Industry:
Tour and Inn Industry (5011)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. A complaint received by the Department of Health (DOH) alleged that the "Ta Wei Ying Hydrotherapy" advertisement published in the United Daily News on 5 August 1999 made exaggerated and false presentations. The DOH forwarded the complaint to the R.O.C. Society for Internal Medicine for its opinion. Relevant personnel of the Society indicated that they were unfamiliar with such "health water." But as the advertisement did not involve food, medical equipment, medicine, or medical practices, the DOH wrote the Fair Trade Commission (the Commission) asking it to handle the case with the purpose of ensuring that P'ai Chin Han cease its unlawful conduct and that citizens not be cheated.
2. After Investigation the Commission found as follows: P'ai Chin Han claimed in its advertisement that its "health water" could be taken internally or used externally as a rinse and that the product "featured the benefits of protecting health and strengthening constitution." It also claimed the following benefits: removes stones, reduces swelling and pain, strengthens metabolism and enzyme reaction, detoxifies, and eliminates allergies; if taken internally over the long-term, the product can protect health, and in concert with reasonable hydrotherapy showering and soaking, the product can eliminate sickness and prolong lifespan, eliminate fatigue, improve circulation, invigorate blood flow, prevent stroke, reduce high blood pressure, improve the immune system, and prevent cancerous tumors." But there was no concrete evidence, scientific basis, relevant academic medical literature, or expert research reports to support the claims. Although P'ai Chin Han provided explanatory information as requested by the Commission, the Society found that that information was merely a draft document describing the patent application in America for the DYNA-MAG ACTIVATOR water treatment product and that it did not explain the differences between the "health water" and general filtered water. The information contained no theoretical basis to support the benefits claimed.
3. Disposition and Grounds: (1) P'ai Chin Han made false and misleading presentations in the advertisement with respect to service quality in violation of Article 21(3) of the Fair Trade Law, which applies mutates mutandis under Article 21(1). (2) P'ai Chin Han argued in its defense that a reporter of the United Daily News was responsible for collecting content and conducing interviews related to the advertisement and for writing the advertisement, and that the reporter made the error. The Commission found, however, that the content had been provided by P'ai Chin Han, that the advertisement had been compiled by United Daily News advertising personnel, and that the advertisement had had to be reviewed and approved by P'ai Chin Han before it could be published. These findings could find support from a file letter of the United Daily News. Therefore, P'ai Chin Han's claims were false. (3) After weighing P'ai Chin Han's motives, anticipated illicit gains, damages to the trading order, duration of the conduct, gains obtained, scale of the operation, status of operations, market position, past record of violations, and evidence of repentance, the Commission ordered the P'ai Chin Han to immediately cease the offending conduct and imposed an administrative fine of NT$150,000 pursuant to the forepart of Article 41 of the Fair Trade Law.
Appendix:
P'ai Chin Han Co. Ltd.'s Uniform Invoice Number: 89516450 Summarized by Tu Hsing-feng; Supervised by Yeh Tien-fu