Compensation by photo developer for damage to or loss of customer film
Chinese Taipei
Case:
Compensation by photo developer for damage to or loss of customer film
Key words:
deceptive, patently unfair, rectify business operation
Reference:
Fair Trade Commission Decision of 7 June 1998 (the 343rd Commission Meeting); Letter (87) Kung Ch'u Tzu No. 8701687-011
Industry:
Photography Industry (8992)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
Candor Law Office [the complainant] complained in a letter to the FTC that Ever Union Color Corp. [the respondent and the photo developer] damaged the negatives of the professional photographic works of Candor's client, Mr. Tseng. The respondent told Tseng that it could indemnify him with a new roll of film, which was the maximum compensation provided under the trade association's regulation. The FTC found that the photo developer had indicated on its receipts that the compensation should be in accordance with the trade association's regulation. Since the trade association might have violated the Fair Trade Law in prescribing regulations regarding compensation, this Commission started investigation with its authority.
Regarding compensation procedures, the benefit from a suit for damages to negatives is normally small, and it is hard to prove damage. A consumer would have a difficult time requesting compensation for damages. The photo developer indicated on its receipt that damaged negative film should be "compensated at the same [monetary] value as the film in accordance with the trade association's regulation." Such a notice of limited liability of the developer made more difficult the exercise of the consumer's right for compensation because most consumers were unable to verify the alleged regulation with the trade association and could not determine whether the trade association's regulation was reasonable. Furthermore, even if the consumer should find the trade association's regulation unreasonable, the cost of flight [for justice] would be far higher than the damages. Taking advantage of the consumer's weakness, the developer transferred to the consumer the risk of damage to the negatives.
Regarding compensation terms, the developer only made compensation for the price of the damaged negative film, which is clearly lower than the compensation that can be claimed under Civil Code Article 227. According to the Civil Code, damages should include positive damages (actual damages) and negative damages (lost profit). If one were to adopt such a single standard as that of the photo trade, then damages to negative films of significant events, such as a professional photographic works, weddings, trips abroad, travel, and evidence collected during criminal investigations, would be calculated at the same low level as damages to negative films of ordinary daily life. Obviously, such compensation could not reflect the actual damages and contradicts the legislative purpose of compensation for damages provided under the Civil Code.
The FTC found that the trade association had not prescribed the alleged uniform compensation, but the statement on the receipts had become a common practice in the photo industry. Such practice had a certain influence, as the consumer's rights could not be reasonably protected through the selection of trading counterparts. Giving its administrative guidance, the FTC addressed a letter to the trade association and the respondent to the following effect:
“In event of damage to or loss of customer film, the compensation amount shall be subject to both parties' negotiation and agreement. However, some developers indicate on their receipts 'in accordance with the trade association's regulations, compensation shall equal the price of a new film.' If the trade association actually specified such compensation standard, it would likely constitute a restraint on the competition function of the market and result in material restriction on competition, which violated the provisions of the Fair Trade Law regarding 'concerted actions. If the trade association did not specify such compensation standard, the photo developers' indicating on their receipts or claiming a compensation standard 'in accordance with the trade association's regulation' is providing erroneous information that affected consumer decisions. Such indications or claims may have violated Article 24 of the Fair Trade Law regarding 'deceptive' and 'patently unfair' acts. The FTC will continue to watch closely the fee collection and compensation situation of the photo developers. Shall anyone be founded in violation of the Fair Trade Law, it would be punished in accordance with the law.”
Summarized by Wei, T'ing-hsun
Supervised by Lin, Yu-ch'ing
Appendix:
Ever Union Color Corp. Uniform Invoice No.: 84282876
Candor Law Office Uniform Invoice No.: 77125582