Warning to New Century InfoComm Tech Co., Ltd. for false advertising in newspapers, using false and misleading presentations
Case:
Warning to New Century InfoComm Tech Co., Ltd. for false advertising in newspapers, using false and misleading presentations
Key Words:
false advertising, layout errors, correct actions
Reference:
Fair Trade Commission Decision of October 9, 2003 (the 622nd Commissioners’ Meeting); Letter (92) Kung San Tzu No. 09200009643
Industry:
Telecommunications (6000)
Relevant Law:
Article 21 of the Fair Trade Law
Summary:
1. This case originated with a letter of complaint forwarded by The Directorate General of Telecommunications (the DGT) of the Ministry of Transportation and Communications alleging, in brief, as follows:
New Century InfoComm Tech Co., Ltd. (New Century) advertised in the United Daily News on 9 May 2003, using the language “007 international direct dialing; real, super-low rates; discounts applicable for both mobile and domestic calls; NT$3 for calls to China and Hong Kong, NT$1 to US and Canada.” The complainant, after consulting the phone company's customer service department, found that the aforementioned promotion was applicable to mobile phone users only after the fourth minute; therefore the complainant believed false advertising was involved.
2. It was found that the newspaper advertisements posted by New Century in the United Daily News on 2 May, 5 May, 7 May, 9 May, 12 May, 13 May, 15 May, 20 May, 21 May, and 23 May all included the language, “the promotional rate is applicable to mobile phone users only after the fourth minute,” with the exception of those posted on 7 May and 9 May. Therefore the assertion by New Century that the cause was due to a layout error by the advertising agent should be acceptable. In addition, after examining the advertisements for Internet promotional discounts that New Century posted in the newspapers (excluding those of 7 and 9 May), an extra note containing the language “the promotional rate is applicable to mobile phone users only after the fourth minute” had been inserted, and taking the advertisement as a whole, the size of the font used in the note was within a range acceptable to the general public. Since consumers have ample time to read the newspaper and can read the ad repeatedly, such a presentation should be sufficient to allow them to clearly understand the restrictions attached to the promotional program. Therefore, when reviewing its advertisements posted in May 2003 (with the exception of 7 May and 9 May), it is difficult to conclude that New Century had a deliberate intent to make false or misleading presentations. While consumers could easily be mislead by the advertisements posted by New Century on 7 and 9 May in the United Daily News, which stated “007 international direct dialing; real, super-low rates; discounts applicable for both mobile and domestic calls; NT$3 for calls to China and Hong Kong, NT$1 to US and Canada” but omitted the note “the promotional rate is applicable to the mobile phone users only after the fourth minute,” the ad did also list the promotional period and a free customer-service number. Upon receiving a call from a member of the public, customer service department would immediately affirm that the promotional rate was applicable only after the fourth minute for mobile phone users. New Century also changed the advertising script right after the mistake was revealed, and posted the corrected advertisement from 13 May on to avoid misleading consumers, so that little blame shall be attached to New Century for such negligence.
3. As a result of the investigation, despite the fact that the advertisements New Century posted on 7 and 9 May in the United Daily News were false and misleading, the Fair Trade Commission found the violation minor after considering the motivation and purpose, the damage to the trading order, and the duration of the violation, in addition to which New Century had already corrected its advertisement before the complaint was filed. Therefore, it is not necessary to order New Century to cease or correct its actions. However, to avoid reoccurrence of similar disputes, the Fair Trade Commission decided to issue a severe warning notice to New Century, in accordance with the Fair Trade Law, with regard to its performance of due diligence in future promotional advertising.
Appendix:
New Century InfoComm Tech Co., Ltd.’s Uniform Invoice Number: 70774626
Summarized by Lai, Mei-Hua; Supervised by Yeh, Ning