San Yang Energy Development Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false representations in its advertising catalog

San Yang Energy Development Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false representations in its advertising catalog

Chinese Taipei

Case:

San Yang Energy Development Co., Ltd. allegedly violated Article 21 of the Fair Trade Law by making false representations in its advertising catalog

Key Words:

false, misleading, solar water heater

Reference:

Fair Trade Commission Decision on June 27, 2002 (the 555th Commissioners’ Meeting); Disposition (91) Kung Ch'u Tzu No. 091106

Industry:

Retail Sale of Household Appliances (4641)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. San Yang Energy Development Co., Ltd. (San Yang Co.) allegedly advertised its product the “Shang Yang Solar Water Heater” in the following terms: “1.932 - the single largest heat collecting area nationwide.” However, the solar water heater that has the largest heat collecting area in the nation, 2.22 m2 or 2.15 m2, is in fact the product of Solatech Enterprises Corporation, as shown on the website of the agency for the administration of the solar water heating systems promotion and award program by the Ministry of Economic Affairs. Accordingly, the abovementioned advertisement was suspected of containing false representations.

2. San Yang Co. claimed in its advertising catalog that its product has a heat collecting area of “1.932 - the single largest heat collecting area nationwide.” Such a claim would lead consumers to conclude that San Yang Co.’s solar water heater has a heat collecting area per unit of 1.93m2, the single largest in the domestic market for solar water heaters. However, the Fair Trade Commission (FTC) investigated and found that by the time the disputed advertising catalog was printed, among the solar water heaters sent to the Energy & Resources Laboratories of the Industrial Technology Research Institute for examination and testing in accordance with the guidelines for the promotion and award of solar water heating systems, the product that had the largest heat collecting area per unit was the product of Solatech Corporation, with a heat collecting area per unit of 2.22 m2. San Yang Co.’s product was merely the largest in terms of the size of a single plate of a metal flat plate solar collector. In addition, the above-stated solar water heaters sent as specimens for examination, testing, and certification were not representative of the specifications of all of the products available in the market. The claims in the disputed advertising catalog obviously conflict with the facts and would create erroneous perceptions or decisions by trading counterparts. The disputed advertising catalog was therefore deemed to contain false and misleading representations.

3. San Yang Co.’s “Shang Yang Solar Water Heater” advertising catalog constitutes false and misleading representations of product content in violation of Article 21(1) of the Fair Trade Law. In accordance with the fore part of Article 41 of the same law, the FTC therefore ordered the company to cease such false and misleading representations. After weighing the motives for the violation, the degree of damage done, the circumstances of the violation, the business scale, and the respondent's attitude in cooperating with the investigation, the FTC imposed a fine of NT$50,000 on the company.

Appendix:

San Yang Energy Development Co., Ltd.’s Uniform Invoice Number: 22686384

Summarized by Lee, Wan-Chun;
Supervised by Yeh, Ning

＊＊: For information of translation, click here

1.	San Yang Energy Development Co., Ltd. (San Yang Co.) allegedly advertised its product the “Shang Yang Solar Water Heater” in the following terms: “1.932 - the single largest heat collecting area nationwide.” However, the solar water heater that has the largest heat collecting area in the nation, 2.22 m2 or 2.15 m2, is in fact the product of Solatech Enterprises Corporation, as shown on the website of the agency for the administration of the solar water heating systems promotion and award program by the Ministry of Economic Affairs. Accordingly, the abovementioned advertisement was suspected of containing false representations.
2.	San Yang Co. claimed in its advertising catalog that its product has a heat collecting area of “1.932 - the single largest heat collecting area nationwide.” Such a claim would lead consumers to conclude that San Yang Co.’s solar water heater has a heat collecting area per unit of 1.93m2, the single largest in the domestic market for solar water heaters. However, the Fair Trade Commission (FTC) investigated and found that by the time the disputed advertising catalog was printed, among the solar water heaters sent to the Energy & Resources Laboratories of the Industrial Technology Research Institute for examination and testing in accordance with the guidelines for the promotion and award of solar water heating systems, the product that had the largest heat collecting area per unit was the product of Solatech Corporation, with a heat collecting area per unit of 2.22 m2. San Yang Co.’s product was merely the largest in terms of the size of a single plate of a metal flat plate solar collector. In addition, the above-stated solar water heaters sent as specimens for examination, testing, and certification were not representative of the specifications of all of the products available in the market. The claims in the disputed advertising catalog obviously conflict with the facts and would create erroneous perceptions or decisions by trading counterparts. The disputed advertising catalog was therefore deemed to contain false and misleading representations.
3.	San Yang Co.’s “Shang Yang Solar Water Heater” advertising catalog constitutes false and misleading representations of product content in violation of Article 21(1) of the Fair Trade Law. In accordance with the fore part of Article 41 of the same law, the FTC therefore ordered the company to cease such false and misleading representations. After weighing the motives for the violation, the degree of damage done, the circumstances of the violation, the business scale, and the respondent's attitude in cooperating with the investigation, the FTC imposed a fine of NT$50,000 on the company.