Chia Jei Technology Business Company Ltd. and Pinlight International Technology Company Ltd. violates the Fair Trade Law by publishing comparative advertising

Case:

Key Words:

water purifier, comparative advertisement, filter

Reference:

Fair Trade Commission Decision of August 19, 2004 (the 667th Commissioners’ Meeting); Disposition (93) Kung Ch’u Tzu No. 079

Industry:

Precision Instruments Wholesaling (4545), Drinking Water Equipment Manufacturing and Repairing (2591)

Relevant Laws:

Article 21 and 24 of the Fair Trade Law

Summary:

This case originated from a complaint letter filed by the Changhua County Government and Shin Chang Natural Gas Co., Ltd. alleging that: Shin Chang International Natural Gas Equipment & Engineering Co., Ltd. sold gas safety equipment to each township and city within Changhua County in the name of safety inspections, and caused confusion to the customers of Shin Chang Natural Gas Co., Ltd. to whom the customers thought the sale was conducted. The alleged act had seriously affected the good faith of Shin Chang Natural Gas Co., Ltd. More complaint letters were filed hereafter from the people in Changhua City and Taichung County complaining that: Shin Chang International Natural Gas Equipment & Engineering Co., Ltd. mailed gas service notifications to the gas users then sent its personnel to the users’ households to conduct gas safety inspections. After entering the houses and finishing the inspection of gas pipelines, the inspectors would say a leak of gas was found and an installation of new switches (automatic shut-off devices) costing New Taiwan Dollars (NT$) 2,900 was needed.
To understand the case, the Fair Trade Commission (FTC) had sent letters or personnel to the business place of Shin Chang International Natural Gas Equipment & Engineering Co., Ltd. for investigation. However, the responsible person of said company pretended to be absent or refused to come to the FTC to explain after the letters were dispatched. Moreover, it was found that the responsible person of said company, Wu, Chi-Sen, had also employed the same improper method selling gas equipment in the name of Shin Shin Development Gas Equipment Co., Ltd., and had also been disposed of by the FTC. Upon the investigation, the FTC found that Shin Change International Natural Gas Equipment & Engineering Co., Ltd. sold gas safety equipment as its business which differed from gas companies that supply natural gas, yet it deliberately chose a similar trade name to Shin Chang Natural Gas Co., Ltd. that supplied natural gas. As for the observation of the service notifications printed and delivered by said company, the words "Shin Chang Natural Gas" were purposely enhanced through printing and composition techniques. The entire effect was sufficient to make the consumers mistake the company for the local piping gas company, Shin Chang Natural Gas Co., Ltd.
It is not that gas safety equipment business operators may not sell goods through door-to-door sales. However, business operators shall fully disclose complete information when conducting door-to-door sales and shall not employ improper sales methods, engaging in safe inspection in the name of a piping gas company. Shin Chang International Natural Gas Equipment & Engineering Co., Ltd. had failed to reveal the real sales entity to the counterparts when selling its products in the name of gas safety inspection, which was deceptive conduct sufficient to affect the trading order in violation of Article 24 of the Fair Trade Law (FTL) and shall be disposed pursuant to the forepart of Article 41 of the same law. The FTC ordered the company to immediately cease the said deceptive conduct sufficient to affect the trading order.

Appendix:
Shin Chang International Natural Gas Equipment & Engineering Co., Ltd.’s Uniform Invoice Number: 80003839
Shin Chang Natural Gas Co., Ltd.’s Uniform Invoice Number: 59033674

Summarized by Wang, Hung-Chu; Supervised by Tso, Tien-Liang

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