False advertising about fees for subscription to the Asian Wall Street Journal in violation of Article 21 of the Fair Trade Law
Chinese Taipei
Case:
False advertising about fees for subscription to the Asian Wall Street Journal in violation of Article 21 of the Fair Trade Law
Key Words:
false, untrue or misleading advertising, the Asian Wall Street Journal, fees
Reference:
Fair Trade Commission Decision of May 24, 1995 (the 188th Commission Meeting); Disposition (84) Kung Ch'u Tzu No. 058
Industry:
Publishing Industry (8020)
Relevant Laws:
Summary:
1. The Asian Wall Street Journal is published in Hong Kong by Dow Jones Publishing Co. (Asia), Inc.. Although Dow Jones does not have any branch office or agency in Chinese Taipei, it distributes the newspaper through its distributors. This conforms to the definition under Article 2(4) of the Fair Trade Law: "any other persons or organizations engaged in transactions by providing goods or services." Therefore, the Fair Trade Law applies. In June and July of 1993, Dow Jones advertised in the Asian Wall Street Journal of subscription rates for the newspaper as follows: "Subscription Rates: One Year/ Six Months: NT$6,800/NT$3,750." While the advertisement also specified the subscription rates for different countries and indicated that such subscription fees may be paid by credit card, the subscribers were charged at a subscription rate (NT$3,964/Six Months) different from the advertised rates. In addition, the advertisement failed to indicate that payment of subscription fees by credit card would lead to a difference in subscription rates due to fluctuation of exchange rates at a different date and to price differentials between the buyer and seller. Thus, the general public reading the advertisement would conclude that they may pay NT$3,750 by credit card for a six-month subscription of the Asian Wall Street Journal. However, after a subscriber paid the subscription fees via credit card issued by Citibank in June 11, 1993, he subsequently learned from the credit card statement that the subscription fee was NT$3,964 instead, which is obviously inconsistent with the amount advertised by Dow Jones for the six-month subscription.
2. The Commission decided in the 189th Commission Meeting that Dow Jones failed to make it clear to credit card subscribers to the newspaper that the prices for the newspaper specified in the advertisement may vary due to fluctuation of exchange rates. Therefore, this constitutes false, untrue or misleading advertising or representations in violation of Article 21(1) of the Fair Trade Law. Although Dow Jones subsequently noted in the advertisement that "Prices charged could vary slightly due to exchange rate fluctuations" as a result of the Commission's investigation, its prior advertisements containing false and misleading information has already violated Article 21(1) of the Fair Trade Law. Dow Jones may not claim that its prior advertisements did not violate the law on the grounds that the advertisements for subscriptions were subsequently corrected. Therefore, Dow Jones shall, within 30 days of receipt of this Decision, cease any false or misleading advertising or representations regarding subscription prices for its publications.
3. Although Tai Hsiang Publishing Co. is the general distributor for the Asian Wall Street Journal in Chinese Taipei, it has not violated Article 21(2) of the Fair Trade Law. Violation of Article 21(2) of the Fair Trade Law requires intent or negligence on the part of the offender, the term "negligence" means "failure to exercise reasonable or due diligence in the cases where reasonable or due diligence is required". When Tai Hsiang processed subscription payments for the Asian Wall Street Journal, it collected, on behalf of Dow Jones, payments made in cash, by check or by money order from the subscribers for the amount specified in the subscription advertisement. However, if the subscribers decided to subscribe by credit card, Tai Hsiang would refer subscription information directly to Dow Jones directly, which then provided such information to relevant credit card issuers to process the payments. Because Tai Hsiang could not know whether the prices for payment by credit cards were consistent with those indicated in the advertisement, the condition for "intent" or "negligence" is lacking on the part of Tai Hsiang. Therefore, Tai Hsiang will not be punished.
Summarized by Liu, Shao-chen
Supervised by Hsu, Chao-ying
＠: For information of translation, click here
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