Labor Union Cooperative Ltd. violated the Fair Trade Law for misleading the general or concerned public to form mistaken beliefs

Chinese Taipei

Case:

Labor Union Cooperative Ltd. violated the Fair Trade Law for misleading the general or concerned public to form mistaken beliefs

Key Words:

mistaken belief, consumer cooperatives

Reference:

Fair Trade Commission Decision of 28 February 1996 (the 228th Commission Meeting); Disposition (85) Kung Ch'u Tzu No. 031

Industry:

Retailing Industry (5319)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1. Department of Construction of the Provincial Government in October 1995 referred to the Fair Trade Commission a complaint filed by Ms. Chang from Chung Li City in Taoyuan County that a Labor Union Cooperative located close to her store allowed commissary goods, the prices of which are much lower than that of equivalent goods, to be circulated in the market, and her livelihood was thus adversely affected as her products could not compete with these commissary goods price-wise. Department of Construction asked the Commission to handle the case.

2. The Fair Trade Commission sent its staff to conduct a field investigation and found that the outlet the complainant alleged had placed signs as "distribution department of commissary goods for servicemen, civil servants and teachers" and "distribution department of commissary goods from Labor Union Cooperatives." If the outlet was indeed a cooperative, then it should be open only to its members rather than the general public. But no inspection of membership cards was conducted at the outlet. Moreover, the plastic bags supplied by the outlet for customers to carry their purchased goods had marks like "Neili distribution department of commissary goods of Labor Cooperative in Chungli area of Taoyuan County" and "Chungli distribution department of commissary goods of Labor Consumer Union Cooperative in Chungli area of Taoyuan County" printed on them.

3. (1) The provisions of Article 21(1) of the Fair Trade Law provides that: "An enterprise shall not make, on goods or in advertisements, relating thereto, any false, untrue or misleading presentation which may likely cause confusion to or mistake by consumers such as their price, quantity, quality, content, manufacturing process, date of manufacturing, validity period, use method, purpose of use, place of origin, manufacturer, place of manufacturing, processor, and place of processing." The provisions of paragraph 3 of the same article provides that: "The provisions of the two preceding paragraphs shall apply mutatis mutandis to the provision of services by enterprises." Therefore, if the expressions or representations made by enterprises may cause the general or concerned public to form mistaken beliefs or make wrong decisions, then regardless of whether such expressions or representations are in compliance with the facts, the enterprises in question would be liable for misrepresentation. (2) The sanctioned party put up advertisement signs at conspicuous locations at the outlet reading "distribution department of commissary goods for servicemen, civil servants and teachers" and "distribution department of commissary goods from Labor Union Cooperatives." It printed on the plastic bags both its own name and the name of the labor consumer cooperative in Chungli area (which is indeed a consumer cooperative). Such acts aimed to have general consumers mistakenly believe that the sanctioned party was part of a consumer consumer cooperative and sold commissary goods. The complainants' allegation also illustrated this point. The complainant thought the sanctioned party was a so-called "consumer cooperative" and alleged that the sanctioned party did not inspect membership card and caused the commissary goods to go into the marketplace. (3) To sum up, the sanctioned party's attempt to cause the concerned public to form mistaken beliefs or make wrong decisions was patent and constituted a violation of the provisions of Article 21(3) of the Fair Trade Law.

　

Summarized by Wu, Ting-hung
Supervised by Pai, Yu-chuang

Appendix:
Uniform Invoice No.: 89695334

＊＊: For information of translation, click here

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