Synnex Technology International Corporation violates the Fair Trade Law by its false and misleading advertisement

Case:

Synnex Technology International Corporation violates the Fair Trade Law by its false and misleading advertisement

Key Words:

finish fixing, service time, maintenance time, attainment rate

Reference:

Fair Trade Commission Decision of May 20, 2004 (the 654th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 093057 of May 21, 2004

Industry:

Retail Sale of Computer and Peripheral Equipment, Software (4731)

Relevant Laws:

Article 21(3) of the Fair Trade Law

1. This case was initiated following a complaint from a consumer of the Synnex Technology International Corporation. While Synnex Technology International Corporation's advertisements claimed "We Will Finish Fixing Your Mobile Phone in 30 Minutes," when the complaining consumer brought in a mobile phone for repair, in-store service personnel notified him that the claimed service was provided for only the first mobile phone brought in for repair after the store opened each day. Moreover, maintenance time exceeded 30 minutes both times when after the consumer twice brought in a mobile phone for repair. The foregoing advertisement was clearly false, in violation of Article 21 of the Fair Trade Law (FTL).
2. Findings of the Fair Trade Commission (FTC) after investigation:
   Synnex Technology International Corporation's mobile phone repair process begins when a consumer brings in a mobile phone to one of Synnex's directly-managed maintenance centers and fills out a "Synnex Technology International Corporation Maintenance Network Repair Form." The consumer takes back the red leaf of the "Synnex Technology International Corporation Maintenance Network Repair Form" after confirmation by the accepting unit. Since the form must clearly state the time the transaction between the two parties began in the repair time column, in accordance with the ordinary perceptions of the general public, the statement of the claim "We Will Finish Fixing Your Mobile Phone in 30 Minutes" should take the repair time recorded on the "Synnex Technology International Corporation Maintenance Network Repair Form" as its starting time, and "service time" (the amount of time consumed from the time the mobile phone is registered for maintenance to the completion of maintenance) shall be calculated from this starting time. Service time can be verified from the maintenance time calculated from the registration time in Synnex's computerized records. Furthermore, Synnex had repeatedly claimed that uneven customer flow was an important reason for its inability to achieve completion of repair of mobile phones in 30 minutes, and Section 4(4), Note 1-2 of the "Synnex Technology International Corporation Service Network" service guidelines state: "Repair of mobile phones in 30 minutes cannot be achieved if customer flow is uneven." It can be presumed that the advertising claim "We Will Finish Fixing Your Mobile Phone in 30 Minutes" has the basic meaning that service time (calculated from delivery for repair) shall be 30 minutes. But if service time is taken to be "maintenance time," and is calculated as the time needed by maintenance personnel after the beginning of maintenance, this will not lead to the result of excessive waiting time caused by uneven customer flow and inability to complete repair in 30 minutes. Consequently, the company achieved an attainment rate of between 57% and 67% from July 2003 to January 2004 based on in-store waiting service time for 30-minute repair service. This is a gap of from 33% to 43% of the advertised service, which must be deemed unacceptable for general or relevant consumers. While Synnex made the claim that it raised its 30-minute repair service attainment rate to 88% from the 1st to the 19th of April 2004, Synnex began placing "We Will Finish Fixing Your Mobile Phone in 30 Minutes" advertisements at least as early as August 2003. These advertisements appeared quite attractive to those trading counterparts attentive to service quality, and were sufficient to influence trading counterparts' reasonable judgment. Synnex must therefore ensure that the content of its advertisements correspond to the real circumstances, and shall not rely on subsequent improvement to avoid its legal obligations. This case involved inconsistency between advertising representations and the facts, and it shall be asserted that Synnex's false and misleading advertisements violated Article 21(3) of the FTL, in which Article 21(1) applies mutatis mutandis. After considering Synnex Technology International Corporation's illegal motivation, degree of damage, circumstances of violation, scale of operations, and attitude after violation, it was accordingly determined in accordance with the fore part of Article 41 of the FTL that Synnex Technology International Corporation shall cease the foregoing illegal actions and be imposed an administrative fine of New Taiwan Dollars (NT$)400,000.

Appendix:
Synnex Technology International Corporation's Uniform Invoice Number: 23060541