Pacific Sogo Department Stores Co., Ltd. violated the Fair Trade Law for using false and misleading representations on posters during anniversary celebration

Chinese Taipei

Case:

Pacific Sogo Department Stores Co., Ltd. violated the Fair Trade Law for using false and misleading representations on posters during anniversary celebration

Key Words:

false advertising, mistaken perception

Reference:

Fair Trade Commission Decision of August 22, 2002 (the 563rd Commissioners’ Meeting); Letter (91) Kung San Tzu No. 0910008317and Disposition (91) Kung Ch'u Tzu No. 091130

Industry:

Department Stores (4751)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. The case originated from a complaint alleging that, in connection with its anniversary celebration on 9 through 20 September 2001, Pacific Sogo Department Stores Co., Ltd. (Pacific Sogo) announced on posters that “Any customer purchasing a total of NT$30,000 or more during the anniversary celebration can bring their receipts to the activity center on the 12th floor and redeem them for ‘food and beverage coupons’ for use at designated restaurants during the celebration period.” The redemption, however, was limited to only invoice amounts totaling NT$30,000 or more on a single day. Pacific Sogo was thus alleged to have engaged in false advertising, in violation of the Fair Trade Law.

2. Through investigation, the Fair Trade Commission (FTC) discovered that Pacific Sogo, to publicize its anniversary celebration from 9 through 20 September 2001, used television, newspapers, buses, and MRT stations for advertising in addition to preparing brochures on its gift and prize activities and discounted goods for issuance to its members. The advertisements covered relevant gift and prize activities and discounted goods, yet only the advertising publications given to members mentioned additional food and beverage coupons. Apart from those advertisements, Pacific Sogo also put up posters with varying content and sizes at its location, explaining the nature of their two-fold gift and prize activities and the methods of redemption, and precisely specified the food and beverage coupon part of the celebration. However, the FTC’s investigation revealed that on other advertising posters put up on the location during the celebration period, the words “on a single day” had not been set out in a prominent typeface. As a result, consumers made purchases of NT$30,000 or more during the celebration period in expectation of obtaining food and beverage coupons. They took their invoices to exchange for the coupons, only to find that only purchases of NT$30,000 or more “on a single day” would be honored. Pacific Sogo thus caused injury to its trading counterparts through creating mistaken perceptions.

3. The FTC concluded that when Pacific Sogo published information about gifts or prizes as a premium for purchases in promotional ads in an attempt to induce trading counterparts to trade, it should have assumed the obligation of proper attention to ensure the truthfulness of its advertisements. Pacific Sogo claimed that the words “on a single day” were omitted due to a proofreading error which was not discovered in time. Nevertheless, the advertising materials received by consumers carried the ads about additional food and beverage coupons stating that “Any customer purchasing a total of NT$30,000 or more during the anniversary celebration can bring the invoices to the activity center on the 12th floor and redeem them for ‘food and beverage coupons,’” which were obviously inconsistent with Pacific Sogo’s actual activities. The FTC therefore held that Pacific Sogo was in violation of Article 21(1) of the Fair Trade Law due to the use of false and misleading representations in its anniversary celebration advertisements with respect to the restrictive conditions for obtaining food and beverage coupons.

Appendix:
Pacific Sogo Department Stores Co., Ltd.’s Uniform Invoice Number: 21257316

Summarized by Lai, Mei-Hua; Supervised by Wu, Jack T.H.