ETWebs Taiwan Inc. was complained for publishing false advertising in its “3C Convenience Card” promotion in violation of the Fair Trade Law

Chinese Taipei

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1. A member of the public filed a complaint stating that ETWebs Taiwan Inc. (ETWebs) claimed in advertising for its broadband Internet service that applicants for the service could “pick one of four free gifts.” After registering by telephone with a representative of ETWebs, followed by numerous telephone conversations with ETWebs representatives inquiring as to when delivery of the free gift could be expected, the Complainant was informed that they must first apply for a credit card from The Chinese Bank, a domestic commercial bank, and would receive the free gift only after their credit card application was reviewed and approved by the bank. The Complainant subsequently filed a written complaint alleging that ETWebs had made false and misleading representations in its advertising with regard to the free gifts offered, in violation of the provisions of Article 21 of the Fair Trade Law.

2. After investigation, it is the findings of the Fair Trade Commission (FTC) that advertising flyers produced for ETWebs' “3C Convenience Card” promotion stated: “Choice 1 -- Surf the Internet for 10% off (with the following notation in brackets: [NT$900 per month]),” “Choice 2 -- 4 free tickets to Taipei Sea World,” and “Choice 3 -- Choose one of four fine gifts (with the following notation in brackets: ‘Pending card approval').” ETWebs clearly indicated in the advertisement that “Choice 3 -- Choose one of four fine gifts” required prior approval of a credit card application and it was thus not inconsistent with the content of the promotion. Further investigation revealed that the advertisement in dispute was not, in fact, produced by ETWebs, thus making it difficult to hold the company responsible for the advertisement. Further inquiry determined that New Tang Cheng CATV (the respondent), a domestic cable TV company, had handled sales of ETWebs' “3C Convenience Card” promotion on a commission basis during the period of 15 September 2001 through 31 October 2001. Following the signing of Internet subscriber contracts and installation, ETWebs paid the respondent NT$300 for each new subscriber brought online through the respondent's efforts. As part of its promotion efforts, the respondent produced its own advertising flyers. The content of the disputed advertisement, however, while offering new subscribers a “choice of one of four free gifts” (as in the respondent's original advertisement stating “choose one of four fine gifts”)—namely a VCD player, a bicycle, a computer scanner or a home exercise unit—failed to disclose the important trading condition that new subscribers must first obtain approval of their credit card applications before they could receive one of the four gifts. This act was sufficient to mislead consumers into thinking that all subscription applicants were immediately eligible to receive their “choice of one of four free gifts.”

3. Grounds for disposition made by the FTC were as follows:

(1) Free gift giveaways and rewards offered by enterprises seeking to meet sales promotion goals are considered parts of the said enterprise's goods and services and often prove extremely attractive to consumers. Restrictions and other obligations associated with special offers for giveaways and prizes—including their content, time period, quantity, means and location— are all considered important trading information sufficient to influence a consumer's decision on whether or not to engage in a given transaction and, therefore, enterprises must clearly and specifically declare the details of such important trading information in all advertising for such promotions. In the event of a failure to clearly state all restrictions and other important trading information to the extent that there is a likelihood that consumers will be misled, it is considered a false or misleading representation. The free giveaway advertisements that the respondent produced for the broadband Internet promotion failed to fully disclose important trading conditions on obtaining the free gifts, causing the potential that consumers would be misled and thereby constituting a false or misleading representation in violation of the provisions of Article 21(1) of the Fair Trade Law as applied mutatis mutandis through Article 21 (3) of that law.

(2) Following overall consideration of the respondent's motivations, its scope of business, the degree of harm its actions caused to the trading order, its cooperative attitude toward the investigation and other factors, the respondent was issued an NT$100,000 administrative fine in accordance with the provisions of the fore part of Article 41 of the Fair Trade Law.

Appendix:

New Tang Cheng CATV's Uniform Invoice Number: 97165153

Summarized by Tsao, Huei-Wen; Supervised by Lee, Wen-Hsiu