Complaints against four enterprises, including Chung Hwa Computer Center, for the violation of the Fair Trade Law by their comparative advertisement for fax reception/transfer service
Chinese Taipei
Case:
Complaints against four enterprises, including Chung Hwa Computer Center, for the violation of the Fair Trade Law by their comparative advertisement for fax reception/transfer service
Key words:
comparative advertisement, obviously unfair
Reference:
Fair Trade Commission Decision of 27 May 1998 (the 342nd Commission Meeting); Dispositions (87) Kung Ch'u Tzu Nos. 127, 128, 129
Industry:
Telecommunications Industry (6320)
Relevant Laws:
Summary:
Chung Hwa Telecom Ltd. [Chung Hwa] simultaneously operated both international direct dial fax and fax reception/transfer telecommunications services. Three of the respondents, Taiwan Telecom, Infoserve Technology Corp. Ltd. and Mackay Telecommunications, Inc., in their price lists compared their prices with Chung Hwa's prices for international direct dial fax services; no specific basis is given for the comparison except the use of vague terms such as "Directorate General of Telecommunications" or "Chung Hwa Telecom". Such comparison clearly had the possibility of confusing and misleading consumers who were unaware that Chung Hwa also operated a fax reception/transfer service.
Although the international direct dial fax and fax reception/transfer are both fax transmission services, they have a competitive relationship and differ functionally. The international direct dial fax service provides instant fax and thus a speed advantage. The fax reception/transfer service, though not providing instant fax, provides diversified premium services (such as single message-multiple recipient, multiple message-multiple recipient, auto redial, status return report, and address book) and has a price advantage. Without specifying the basis of comparison, the said three respondents compared their advantageous price of the fax reception/transfer service with Chung Hwa's price for the international direct dial fax service. The comparison was made on dissimilar bases, intended in the respondents' favor, obviously contrary to the efficiency-based competition, and obviously unfair to their competitors. This constitutes a violation of Article 24 of the Fair Trade Law (the Law).
As to respondent Chung Hwa Computer Center, although it compared its CFAX global fax reception/transfer service prices with Chung Hwa's international direct dial fax prices, the comparison basis was clearly specified as "CFAX" and "ITA" and the cost details were listed. Consumers were not likely to be misled; thus the respondent Chung Hwa Computer Center did not violate Article 24 of the Law.
Summarized by Li, Wen-hsiu
Supervised by Wu, Ting-hung