Taiwan Fixed Network Corp. was complained for publishing advertisements claiming "The first three digits dialed when making international calls are now 006 for Chunghwa Telecom users" and "The first three digits dialed when making international calls are now 006 for FarEasTone Telecom/KG Telecom users" in violation of the Fair Trade Law

Case:

Taiwan Fixed Network Corp. was complained for publishing advertisements claiming "The first three digits dialed when making international calls are now 006 for Chunghwa Telecom users" and "The first three digits dialed when making international calls are now 006 for FarEasTone Telecom/KG Telecom users" in violation of the Fair Trade Law

Keywords:

fixed communication business, international network identifier codes, misleading advertisement

Reference:

Fair Trade Commission Decision of December 9, 2004 (the 683rd Commissioners'Meeting); Disposition Kung Ch'u Tzu No. 093122

Industry:

Telecommunications (6000)

Relevant Law:

Article 24 of the Fair Trade Law

Summary:

1.	The Fair Trade Commission (FTC) received a complaint alleging that Taiwan Fixed Network Corp. published an advertisement claiming that "the first three digits dialed when making international calls are now 006 for Chunghwa Telecom users" on July 19, 21, 22, 24, and 26, 2004 and another advertisement claiming that "the first three digits dialed when making international calls are now 006 for FarEasTone Telecom/KG Telecom users" on July 20, 21, and 23, 2004. The advertising media were the United Daily News, the Libertytimes, and the Apple Daily. The entire content of the advertisements was printed black in large and bold typeface, stating that "starting from July 15, 2004, the first three digits dialed when making international calls are now '006'for Chunghwa Telecom users", "starting from July 15, 2004, the first three digits dialed when making international calls are now '006'for FarEasTone Telecom/KG Telecom users", "dial now directly without applying or switching numbers", and "everyone respond to win the prize," with a prize giveaway message and an example explaining how to dial international calls printed on the bottom right. On the bottom of the advertisement mentioning Chunghwa Telecom, a blue bar with radiant colors of yellow, orange, and red inside was printed; while on the advertisement mentioning FarEasTone Telecom and KG Telecom, a round angle was printed on the up left and a red triangle was printed on the bottom right. A red triangle was also printed in front of the words "Everyone respond to win the prize." There was no information at all in the advertisements that was clear enough to distinguish the enterprise name, trademark, or corporate identification of the advertisement publisher. The complainant was under the impression that Taiwan Fixed Network Corp. intentionally tried to mislead the customers of Chunghwa Telecom or FarEasTone Telecom into believing that the first three digits dialed when making international phone calls were changed into "006" from July 15, 2004, in violation of the Fair Trade Law.
2.	Upon the investigations, the FTC found that: The advertisement of "Calling Up the World" published in June 2004 and "it's all given by 006" published in July 2004 both contained the blue square pattern with the words "006 International Direct Dialing," the trademark of Taiwan Fixed Network Corp, and the enterprise name. However, the aforementioned advertisements in question, except for the words "toll free inquiry and prize line: 0809-000166" printed on the bottom, did not contain sufficient information for potential customers to distinguish the enterprise name, trademark, or corporate identification of the advertisement publisher. Moreover, given the facts that Taiwan Fixed Network Corp. employed large, black, and bold typeface to indicate the date and the information that the first three digits had been changed to "006" for Chunghwa Telecom or FarEasTone/KG Telecom users, the message disseminated here can easily be interpreted into that from July 15, 2004 users of Chunghwa Telecom or FarEasTone Telecom shall dial "006" instead when making international phone calls. Additionally, the patterns used in the advertisements were indeed similar to the corporate identity systems employed by Chunghwa Telecom or FarEasTone Telecom in their advertisements. Therefore, based on the joint observation of the patterns and wording, the said advertisements can easily mislead the public into believing that such advertisements were published separately by Chunghwa Telecom or FarEasTone Telecom. The message gave wrong understanding that from July 15, 2004, the mobile phone users of Chunghwa Telecom or FarEasTone Telecom shall dial "006" instead when making international phone calls.
3.	Grounds for the disposition: (1) Enterprises shall abide by the principle of being accurate, complete, and not misleading to provide advertisements that comply with business competition ethics. The advertisements published by Taiwan Fixed Network Corp. conspicuously violated the aforesaid principle. The advertisements can easily mislead consumers into believing that the mobile phone users of Chunghwa Telecom or FarEasTone Telecom shall dial "006" when making international calls from July 15, 2004. It is inconsistent with the principle that advertisements shall pass on accurate information. Besides, the advertisements in question failed to contain sufficient information about the enterprise name, trademark, or identification of the advertisement publisher, which is inconsistent with the principle that advertisements shall completely disclose relevant information. Moreover, the advertisements in question can easily mislead the consumer into having wrong understanding about the identity of the advertisement publisher and the content of the advertisements, which is conspicuously against the general business competition ethics. (2) After the ban on the fixed communication business was lifted, each telecommunication enterprise has put a great deal of efforts in their advertisements and marketing activities to make consumers clearly aware of their own international identifier codes. They all expect to establish consumers'knowledge of their own network identifier codes, so that they can strive for more trading opportunities. However, the wrong message sent out by Taiwan Fixed Network Corp. is misleading enough to make the general public have mistaken knowledge of the network identifier codes of Chunghwa Telecom or other fixed communication business operators, and cause damages to Chunghwa Telecom or other fixed communication businesses'benefits that are supposed to be derived from the efforts put in advertisements and marketing activities to enhance consumers'knowledge of their own network identifier codes. Thus, the conduct that Taiwan Fixed Network Corp. published such misleading advertisements and damaged the beneficial results of its competitors is conspicuously unfair and is malicious enough to affect trading order in violation of Article 24 of the Fair Trade Law. (3) After considering the motivation, purpose, and expected improper benefit of the conduct, the degree and duration of the harm to trading order, profits gained, scale, operating condition and market position of the enterprise, and its attitude following the violation, the Commission, in accordance with the fore part of Article 41 of the Fair Trade Law, ordered Taiwan Fixed Network Corp. to immediately cease the aforementioned unlawful practices on the day following the receipt of the formal disposition notice and imposed an administrative fine of NT$ 1,500,000.

 
Summarized by Liao, Hsien-Chou;

Supervised by Hou, Vh-Hsien

Appendix:

Taiwan Fixed Network Corp.'s Uniform Invoice Number: 70774528