Nice Beauty.com Corporation was complained for violation of Article 21 of the Fair Trade Act through alleged false statement of product contents on its nicebeauty.com website and product labels

Chinese Taipei

Case:

Nice Beauty.com Corporation was complained for violation of Article 21 of the Fair Trade Act through alleged false statement of product contents on its nicebeauty.com website and product labels

Key Words:

false and misleading

Reference:

Fair Trade Commission Decision of February 13, 2003 (the 588th Commissioners' Meeting); Disposition (92) Kung Ch’u Tzu No. 092024

Industry:

Retail Sale of Cosmetics (4652)

Relevant Law:

Article 21 of the Fair Trade Act

Summary:

1. The case was originated from a complaint alleging that the statements made by Nice Beauty.com Corp. (Nice Beauty) on its nicebeauty.com website were false. Nice Beauty stated on its nicebeauty.com website that the products for which it served as agent were manufactured by the California-based Dr. Bella Laboratory. However, since commencement of operations, Nice Beauty had been unwilling to publish either Dr. Bella's complete company address in the United States or the address of the manufacturer. As Internet searches and inquiries of residents in California revealed no information about Dr. Bella Laboratory, the aforesaid advertisements were thus suspected to be false.

2. Nice Beauty claimed that "Dr. Bella Laboratory" was a brand name, a kind of specification or certification, and not a brick-and-mortar research institute, and that it had registered the "Dr. Bella Laboratory" trademark. The various announcements on its website, however, proved the contrary. On the web page "Origin of Dr. Bella and Story of the Brand" from its nicebeauty.com website, Nice Beauty stated that "Dr. Bella Laboratory is headquartered in San Francisco, California" and that it "has nearly 20 years of experience in R&D and manufacturing." On the web page "Making You Beautiful is Dr. Bella's Everlasting Promise to Women," Nice Beauty stated, together with supporting pictures of researchers and buildings, that "Dr. Bella Laboratory is staffed with a team of doctorate-level researchers with intensive knowledge and research backgrounds in skin care." On the web pages about its products "Renewing and Repairing Pre-makeup Base" and "Whitening Beauty Mask," it stated that "Dr. Bella Biotechnology Laboratory combines precise biochemical manufacturing technologies…" and that "Dr. Bella Laboratory's specialized R&D techniques combine modern biotechnology…." In addition, the wording "Dr. Bella Laboratory, California, U.S.A." was printed on its product labels. All of these statements would mislead its trading counterparts to mistakenly believe that the term "Dr. Bella Laboratory" was not only a brand name but also a brick-and-mortar laboratory headquartered in San Francisco, California with a long history and actual experience in R&D and manufacturing, with a team of specialized, doctorate-level researchers, and that the products sold by Nice Beauty under the brand name of "Dr. Bella Laboratory" were products of the laboratory's R&D program. Those representations obviously departed from the truth, the discrepancy would be difficult for the general public at large to accept, and would be capable of creating mistaken perceptions and decisions by its trading counterparts. It was therefore determined that the aforementioned representations on the nicebeauty.com website and on the products exhibited on its various pages to be false and misleading.

3. Nice Beauty violated Article 21(1) of the Fair Trade Act with its false and misleading representations as to the origin of goods and other matters on the nicebeauty.com website and on the packaging of its products. Weighing the motives for its violation, the degree of injury to the trading order, the seriousness of the violations, the scale of the company's business, and its cooperativeness during investigation, the Fair Trade Commission ordered Nice Beauty to cease the above-mentioned false and misleading representations and imposed an administrative fine of NT$500,000.

Appendix:
Nice Beauty.com Corp’s Uniform Invoice Number: 70485040

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