Chiyuan Cable and Telecommunication Corp. Ltd. violated the Fair Trade Law for incorporating untrue notes into channel purchase contract stating that it represented all cable system operators in the southern district of Miaoli
Chinese Taipei
Case:
Chiyuan Cable and Telecommunication Corp. Ltd. violated the Fair Trade Law for incorporating untrue notes into channel purchase contract stating that it represented all cable system operators in the southern district of Miaoli.
Key words:
deceptive, channel providers, agent, signal relay
Reference:
Fair Trade Commission Decision of December 24, 1997 (the 321st Commission Meeting); Decision (87) Kung Ch'u Tzu No. 034 and Letter (87) Kung Yi Tzu No. 8607129-010
Industry:
Television Industry (8520)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
A complaint was brought to this Commission reporting that Chiyuan Cable and Telecommunication Corp. Ltd. (Chiyuan) while purchasing channels added to the contract a note stating that "[a]s far as the subject of the contract is concerned, Chiyuan is the sole representative in the thirteen villages and towns in the southern district of Miaoli, representing other system operators and subscribers in the region. If you act against the above representation, you will be held accountable for breach of the contract. If the competent authority requires information regarding the programs and channels incorporated in this contract, you will unconditionally cooperate with the authority and assume all legal responsibility. Noted by Chiyuan." The complaint alleged that such note implied that Chiyuan was the exclusive system operator for the broadcast or brokerage of the channels in that district, which constituted a violation of the Fair Trade Law.
According to this Commission's investigation, the Complainant and Chiyuan were both cable TV broadcasting systems in the same broadcasting district, i.e., they were competitors. Before November 1996, the Complainant transmitted signals to its subscribers via Chiyuan's network. Therefore, the Complainant authorized Chiyuan to negotiate with the channel providers regarding the license contracts. In November 1996 the alliance between the Complainant and Chiyuan collapsed. With the knowledge that the Complainant would not continue relaying its signals, Chiyuan added a note to the contract that "[a]s far as the subject of the contract is concerned, Chiyuan is the only relevant trader in the thirteen villages and towns in the southern district of Miaoli, representing other system operators and subscribers in the region. If you act against the above representation, you will be held accountable for breach of the contract. If the competent authority requires information regarding the programs and channels incorporated in this contract, you shall unconditionally cooperate with the authority and assume all legal responsibility. Noted by Chiyuan." Such note caused confusion and misunderstanding for the Complainant and the channel providers.
The investigation also showed that Chiyuan and the Complainant, located in the same broadcasting. Other than the Complainant’s authorization for Chiyuan to negotiate with channel providers regarding the contracts, Chiyuan did not really represent all of the system operators in the district. The channel providers who signed the contracts also denied the additional note as part of the terms and conditions of the contract. Therefore, the content of the note added to the contract by Chiyuan was obviously untrue. Moreover, though Chiyuan expressed in a written notice its willingness to correct the note when the contract was to be renewed in 1998, the fact that the content of the note was in violation of the Fair Trade Law could not be remedied.
Article 24 of the Law states that "except otherwise provided for in this Law, no enterprise shall engage in any deceptive or obviously unfair acts that could adversely affect the order of trade." As Chiyuan was not the agent for all system operators in the southern district of Miaoli, the note it had added to the contract was obviously false and deceptive, which could adversely affect the order of trade among channel providers. Therefore, Chiyuan was found to have violated Article 24 of the Fair Trade Law.
Summarized by Lai, Mei-hua
Supervised by Lin, Yu-ch'ing
Appendix:
Chiyuan Cable and Telecommunication Corporation. Ltd.'s Uniform Invoice Number: 23960536