Yahoo Taiwan Inc. violated the Fair Trade Law by plagiarizing content on the "New Websites" section of Yam Digital Technology Co., Ltd.'s Website
Case:
Yahoo Taiwan Inc. violated the Fair Trade Law by plagiarizing content on the "New Websites" section of Yam Digital Technology Co., Ltd.'s Website
Key Words:
exploiting the fruits of a competitor's efforts, Website content provider
Reference:
Fair Trade Commission Decision of October 25, 2001 (the 520th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 172
Industry:
Information Provision Service Industry (7503)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. Yam Digital Technology Co., Ltd. (Yam) and Yahoo Taiwan Inc. (Yahoo) are Website content providers. In a complaint, Yam alleged that between 29 March and 17 April of 2001, Yahoo repeatedly plagiarized content on the "New Websites" section of Yam's Website. This content consisted of introductory information edited and prepared by specific personnel at Yam on the "Six Best New Websites" selected by Yam from 300 to 400 new Websites registered daily on the Yam search engine. During this period, Yahoo published introductions to 60 new websites on the "New Kimo" section of its Website. The wording of introduction in 53 of the 60 websites was identical to that on Yam's Website, leading Yam to allege that Yahoo had violated Article 24 of the Fair Trade Law. 2. The Fair Trade Commission (FTC) investigated and found as follows:The "Six Best New Websites" on the "New Websites" section of the Yam Website are selected from the 300 to 400 new Websites registered on the Yam search engine daily through individual review of each Website, and are made available for public browsing on the Yam Website. This service is provided to carry out its business goal of providing high quality content on its Website.The "Best New Websites" on the "New Kimo" section of the Yahoo! Kimo Website provides a similar service. It introduces five new websites per day. Between March 29 and April 17 of 2001, of the 60 new Website introduced on the "New Kimo" section of its Website, 53 contained information identical to that published earlier the same day or previously on the "New Websites" section of the Yam Website.Although overlap can occur in new Website information published on different Websites, there was considerable cause for concern in this case because there was a 90% rate of overlap on the new Website information, and the wording used was identical. Furthermore, of the 53 items containing identical information, one-third of the items had not been registered on the Yahoo! Kimo search engine, so the source of the information was unclear. Although the other two-thirds of the items could be found on the Yahoo! Kimo Website, the wording used on the "New Kimo" section of the Website differed dramatically from that in search results of the Yahoo! Kimo search engine, but was identical to that on the "New Websites" section of the Yam Website.The "New Websites" section of the Yam Website was made available for public browsing. The content on the "New Kimo" section of the Yahoo! Kimo Website is highly similar to that on the "New Websites" section of the Yam Website. It was evident that this content was directly extracted from the "New Websites" section of the Yam Website for the purpose of enriching the content of the Yahoo! Kimo Website.3. Article 24 of the Fair Trade Law states: "In addition to what is otherwise provided for in this Law, an enterprise shall not engage in other deceptive or obviously unfair acts that are likely to affect the trading order."If the conduct of an enterprise violates the principle of efficient competition and fundamentally harms fair market competition, such conduct is obviously unfair to competitors that abide by the spirit of fair competition. Exploiting the fruits of another's efforts by capitalizing on the reputation or well-known advertisements of another, improperly imitating the appearance or symbol of another's products or services, taking advantage of the effort or cost invested by another in advertising and marketing and so on to promote the sales of ones own products (commonly referred to as "free-riding") are reprehensible acts that run counter to the ethics of commercial competition. Therefore if a business seeks to sway customers not through diligent efforts but rather by extracting business information from the Website of another to enrich the information on its own Website, such conduct constitutes an unfair competitive practice of exploiting the fruits of a competitor's efforts in violation of Article 24 of the Fair Trade Law. The Yam Website is the first search engine for the global Chinese community and has many users. The "New Websites" section of the Yam Website selects the "Six Best New Websites" from the daily 300 to 400 new Websites registered on the Yam search engine and provides introductory information on those new Websites. This section helps users quickly select Websites that suit their needs from among the many available Websites and is used by Yam to secure a business toehold in the fiercely competitive Website market.Rather than exerting its own efforts to search for and compose information on new Websites, Yahoo elected instead to plagiarize content on the Yam Website. By reproducing the information from the "New Websites" section of its competitor to enrich the content on its own Website, increase the volume of visitors to its own Website, and expand its own advertising income, Yahoo exploited the fruits of another's efforts and harmed the trading order, which is centered upon efficient competition on price, quality, and service. Such conduct is obviously unfair to competitors that abide by the rules of fair competition, runs counter to the ethics of commercial competition, and constitutes patently unfair conduct sufficient to affect the trading order under Article 24 of the Fair Trade Law. The FTC therefore ordered Yahoo to immediately cease the obviously unfair acts sufficient to affect the trading order and imposed an administrative fine of NT$300,000, pursuant to Article 41 of the Fair Trade Law.Appendix:Yam Digital Technology Co., Ltd.'s Uniform Invoice Number: 16747089Yahoo Taiwan Inc.'s Uniform Invoice Number: 70468838Summarized by Liao, Hsien-Chou;Supervised by Lee, Wen Hsiu