Shepherd King International Trade Co., Ltd. violated the Fair Trade Law for its safe product brochures and advertisements were untrue

Chinese Taipei

Case:

Shepherd King International Trade Co., Ltd. violated the Fair Trade Law for its safe product brochures and advertisements were untrue

Key Words:

untrue advertisements, false and untrue, misleading

Reference:

Fair Trade Commission Decision of September 10, 1997 ( the 306th Commission Meeting); Disposition (86) Kung Chu Tzu No. 157

Industry:

Metal Products Manufacturing Industry (2170)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1..Chien Shuen Trading Co., Ltd. complained that both the Yue Ta Enterprise Co., Ltd. and Shepherd King International Trade Co., Ltd. (having the same sales channel as Yue Ta Co.) made false, untrue, and misleading representations relating to the origin and quality of their products; their acts were allegedly in violation of Article 21 of this Law. The concrete evidences were as follows:

(1)Yue Ta Co. was the distributor of Sun Safes Mfg. Co. of Korea and imported the “ Euro” brand safes from that company. In the product brochures and advertisements, however, the respondent claimed that the safes were “ imported from Germany,” were “ the only safes that had the ISO 9002 certification for the European common market,” “ had received the Germany Industrial Design Award,” and that “ the ‘ Euro’ safes of Germany has established 11 safe factories in eight countries around the world.” The claims were allegedly untrue and were misleading the consumers.

(2)Shepherd King International, which had the same sales channel as Yue Ta Co., printed on its product brochures that the safes “ were made of four-layer metal plates,” “ had the thickest alloy plate among imported safes of the same category;” that the safes “ were equipped with SiO2 anti-flammable fillings;” that the ‘ Euro’ safes of Germany “ had established 11 safe factories in eight countries around the world,” “ ranked among the top three safe manufacturers in the world;” and that “ all products were manufactured by and imported from the mother company in Asia.” The claims were allegedly untrue.

(3)In the mail order catalog published by China Trust Commercial Bank, Shepherd King International further used the following untrue phrases: “ safes imported from the United States” and “ certified by the JIS of Japan.”

2.From the perspective of the parties committing the prohibited activities, both the Yue Ta Co. and Shepherd King International should be the defendants in this case. However, Yue Ta Co. received approval for dissolution on October 11, 1995 and its business operations were undertaken by Shepherd King International. Thus Shepherd King International became the only respondent in the case.

In addition, the complainant also forwarded the advertisements produced by Yue Ta Co.. There was, however, no clear evidence to prove that the company had in fact used the advertisement. Therefore, the advertisements will not be included within the scope of discussion for this case. The above clarifications are thus made.

3.Investigation further showed that relating to the advertisements in question, the respondent knew that the products described in the brochures, the ES030, 80381, SM020, and the EW-01, were imported from Korea, and that no relation existed between the Korean factory and Germany. The above issue was proven when the company presented its case at this Commission. The respondent, however, in its product advertisements, printed untrue statements such as “ Euro Safes from Germany,” “ Euro safes of Germany had established 11 safe factories in eight countries around the world, and ranked among the top three safe manufacturers in the world,” and “ all products were imported directly from its Korean subsidiary factory.” It was obvious that the respondent’s intention was to mislead prospective trading counterparts into believing that the products were manufactured in Germany, thus leading to transactions with the respondent.

4.The respondent argued that there were printing errors in the brochures in question, and that the use of the said brochures was discontinued long ago; the company had printed new product brochures with the necessary corrections. However, the comparative advertisement for “ Euro Safes” forwarded by the complainant on March 18, 1997 still contained untrue statements such as “ Euro Safes are 100% imported from Germany” and “ received the Germany Industrial Design Award.” In presenting its side to this Commission, the respondent also admitted in designing and producing the advertisement, and that its distributors in Kaohsiung and other areas were still using the said advertisement. Thus it was determined that the advertisement was false and misleading.

5.The respondent claimed in its product brochures that the safes “ were made of four-layer metal plates,” “ had the thickest alloy plate among imported safes of the same category;” and that the safes “ were equipped with SiO2 anti-flammable fillings.” Since the complainant neither forwarded any test report from professional certification agencies, nor explained whether the said representations could cause the general public to have reasonable doubts, there was no clear evidence that the said brochures were false and misleading.

6.Lastly, after having conducted telephone inquiry with Hsing Lei Company, which was commissioned by the China Trust Commercial Bank to print the mail order catalogs, it was found that the said product advertisement in the mail order catalog was imported by the said company, and not produced by the respondent. This issue was thus unrelated to this case, and hereby clarified.

Summarized by Tu, Hsing-feng
Supervised by Pai, Yu-chuang

Appendix:
Shepherd King International Trade Co., Ltd.’s Uniformed Invoice Number: 22203084

＠: For information of translation, click here

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