Mei T'ing Feng Co., Ltd. was complained for false advertising in violation of the Fair Trade Law

Chinese Taipei

Case:

Mei T'ing Feng Co., Ltd. was complained for false advertising in violation of the Fair Trade Law

Key Words:

false advertisement, number one, the best, the most

Reference:

Fair Trade Commission Decision of September 24, 1997 (the 308th Commission Meeting); Disposition (86) Kung Ch'u Tzu No. 173

Industry:

Beauty Industry (8991)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1.A complaint was filed by a consumer to the Commission alleging that Mei T'ing Feng Co., Ltd. (hereinafter, "MTF") made false advertisements on all major domestic media in August 1996, which claimed the following: (1) "Maidenhood [service mark of the company] has become the No. 1 company in the weight-loss and beauty industry, thanks to its 150,000 members and endorsement of elites from various professions"; (2) The company has the following achievements: "best brand image," "most effective weight-loss scheme," "best weight-loss clinic," "company with the best credit," "safest scheme," "best product quality," "best education and training programs," "winner of the most awards and honors," and "most scientific in weight-loss scheme." In addition, the company also claimed in the above advertisements that it is "a company with a 19-year commitment to its brand image” and has “standard fire protection equipment.”

2.The use alone of superlatives in MTF's advertisements, such as "most," "best," "outstanding," and "excellent," which are subjective expressions known to be exaggerative, is not likely to create false impression. Therefore, such expressions are not considered "false" or "misleading." However, if the specific expressions used in the advertisement are exaggerated and unsubstantiated by facts or deviate from the truth to the extent of causing misconception of the general consumer, such advertisement will be considered false or misleading and will be subject to proper regulatory action. In this case, MTF claims the best services in its advertisement in a manner that is sufficient to cause the general consumer to make a purchase decision. Therefore, MTF should have provided concrete data regarding its "best services" to substantiate the truth of its advertisements

3.Regarding MTF's claim of being the "No. 1 company in the weight-loss and beauty industry," "most effective weight-loss scheme," and "best education and training programs," MTF merely provided market share information collected by it to serve as the basis for comparison or used statements of its employees who previously worked for other similar companies to support its claim of being the "No. 1 company." There is no concrete, objective evidence that supports MTF's status as the leading company in this industry. Therefore, such claim is misleading to the consumer.

Regarding MTF's claim to have the "best brand image," the term "image" is an abstract concept that depends to a great extent on subjective value judgments. Although there is no definite standard for determining the best image, there are acceptable empirical indicators, such as business scale, reputation, quality and service, to help render a general judgment. MTF substantiates its claim by merely providing the result of a survey conducted on a sample of 600 females (drawn each season) at the age of 20 to 44, living in Taipei, Taichung City and Kaohsiung City, and likely to seek professional help for weight control and weight loss. However, after reviewing the FSA Market Survey Questionnaires and Report submitted by MTF, the Commission has found that the survey was conducted by telephone interviews with randomly selected subjects. The interview covered the subject's impression of weight-loss commercials on TV, fairness of the fees, duration of the weight-loss schemes, the first weight-loss company that comes to mind, etc. These questions can hardly enable the subject to form a judgment of the "best brand image." Therefore, MTF obviously has misled the consumer.

Regarding MTF's claim to be a "company with the best credit," MTF just accepts credit card applications of its members on behalf of China Trust Commercial Bank as a matter of cooperation between the two companies. Application review and issuance of credit cards are handled by China Trust on its own. Therefore, MTF cannot claim to be a "company with the best credit" on such basis.

Regarding MTF's claim to "best quality," MTF stated that it mainly uses products manufactured by DIBI, the leading brand for beauty salons in Europe. However, MTF has failed to provide concrete evidence to support that DIBI is the leading brand in Europe. Therefore, such claim is false.

Regarding MTF’s claim to have the "most scientific weight-loss scheme," MTF stated that healthy, scientific weight loss is its objective, which is initiated by MTF in the industry. MTF also cited as evidence the recommendations of President Chuang of the Taipei Nursing College, Director Hsieh Ming-tse of the Health and Nutrition Department of the Taipei Medical College, Councilor Ch'in Li-fang of the Taipei City Council, well-known TV anchor Yieh Shu-shan and doctor and writer Ho Wen-yung. Regardless of the reliability and appropriateness of such recommendations with the professional background and expertise of those persons, MTF uses of its objective of healthy and scientific weight-loss and its initiative of such objective in the industry as the basis for its claim to have the "most scientific weight-loss scheme" is obviously false.

MTF's claim to be the “best weight-loss clinic,” "safest scheme," "winner of the most awards and honors", "150,000 members," and "endorsement of elites from various professions" cannot be found to be false because of the difference in definition and personal subjective opinions of relevant individuals.

Regarding MTF's claim to "19-year commitment to its brand image, with no franchises", this Commission has previously penalized MTF for false advertising about its "18th anniversary" through the Disposition dated January 5, 1996 and with reference number (85) Kung Ch'u Tzu No. 001. The disposition was made because the exclusive use period for "Maidenhood," MTF's service mark, began on January 16, 1992. MTF later indicated, once again, "19-year commitment to its brand image" in the advertisement in question. Apparently, MTF has failed to rectify its violation pursuant to the above Disposition. Therefore, MTF is hereby fined NT$500,000 for making this "19-year" claim in accordance with Article 41 of the Fair Trade Law. As for the claim to "no franchises," it is hardly false since MTF has used "Maidenhood" as its service mark for outlets under its direct supervision.

Regarding MTF's claim to have "standard fire protection equipment," "open for business on Sundays and all holidays," MTF stated that as a gesture of the company's dedication to the safety of its customers and employees, MTF has purchased insurance and set up fire protection facilities. In addition, MTF is open for business 360 days a year, except for the Chinese New Years, a period lasting five days. Therefore, such claims are not false.

In conclusion, MTF has violated Article 21(3) of the Fair Trade Law, to which Article 21(1) of the same article are applied mutatis mutandis. Therefore, MTF is hereby penalized in accordance with Article 41 of the same law.

Summarized by Wu, Tsuei-feng

Appendix:
Mei T’ing Uniform Invoice Number: 89967052

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