Ai-Fan-Ta Digital Co., Ltd.

776th Commissioners' Meeting (2006)

Case:

The sales prices of CASIO digital cameras sold on PC Home's website was complained by the public to be untrue and constitute a violation of the Fair Trade Law

Key Words:

PC Home, Ai-Fan-Ta, untrue advertisement

Reference:

Fair Trade Commission Decision of September 20, 2006 (the 776th Commissioners' Meeting); Disposition (95) Kung Ch'u Tzu No. 095145

Industry:

Retail Sale of Photographic Equipments (4645)

Relevant Laws:

Article 21 of the Fair Trade Law

1. This case originated from email forwarded by the Premier of the Executive Yuan stating that: PChome Online Inc. (hereinafter called “PChome”) labeled the sales price of “CASIO EX-Z110 Digital Cameras” as NT$790 on its web page under the directory of PChome Online/Store Street on April 1, 2006. However, said company did not deliver the product according to the aforementioned price. Therefore, this case was submitted to the Fair Trade Commission (“FTC”) for further investigation. Additionally, the Consumer Protection Commission, Executive Yuan, also submitted the dispute regarding the wrongfully labeled price of digital cameras to the FTC for investigation. The FTC therefore combined both requests under one investigation.
2. Findings of FTC after investigation:
   The website of PChome Online/Store Street established by PChome is a platform for general businesses to lease cyber space to open online stores. On April 1, 2006, the sales price of the camera “CASIO EX-Z110” listed on PChome Online/Store Street was labeled as NT$790. The said product, however, was not sold according to such a sales price. It was found that Ai-Fan-Ta Digital Co., Ltd. (hereinafter called “Ai-Fan-Ta”) leased online space from PChome to open an online store. The trading and payment mechanism was provided by PChome to online stores to receive payments on behalf of store owners; however, Ai-Fan-Ta was the one in charge of issuing invoices to online purchasers. Additionally, the contents of web pages and product sales prices were produced, decided and uploaded to the online store by Ai-Fan-Ta. PChome merely charges a payment service fee and 3% of the sales amount.
3. Grounds for disposition:

1. Since the advertisement of the digital camera in question was uploaded or published by Ai-Fan-Ta instead of PChome, and the invoices for the sales of aforesaid product were issued by Ai-Fan-Ta instead of PChome, PChome shall not be deemed as the advertiser in this case; though PChome charged Ai-Fan-Ta 3% of the monthly sales amount as the service fees. Therefore, the advertiser in this case shall be duly Ai-Fan-Ta.
2. Ai-Fan-Ta admitted that the advertisement in question was produced by itself. Ai-Fan-Ta also admitted that the sales price, NT$790, was a mistake and that Ai-Fan-Ta did not deliver the products after the orders were placed. Therefore, it is confirmed that Ai-Fan-Ta failed to sell the aforesaid digital camera for the price stated in the advertisement. Ai-Fan-Ta's act therefore constituted a making of false, untrue and misleading representations in the advertisement and a violation of Article 21(1) of the Fair Trade Law. Though Ai-Fan-Ta provided a sales plan to sell the same camera for NT$7,900 with one complimentary (1G SD memory card) after the incident, only one camera was purchased. It shows that consumers placed the orders originally for the low price stated in the advertisement in question. Moreover, as for online trade, employing low prices to promote products is not very rare. In addition, according to the purchase list, not all of the purchasers maliciously placed huge orders. For example, 1,695 out of 2,058 non-repetitive purchase orders were for fewer than 5 cameras. 997 consumers were attracted by the advertisement and decided to purchase one camera. Therefore, it is hard to say that all of the consumers had known of the mistake or negligence of the price before they placed orders. The untrue representation was sufficient to affect trading counterparts' decisions and cause them to proceed with the transactions. In conclusion, since the advertiser shall have the responsibility regarding the advertisement contents, Ai-Fan-Ta shall not be exempt from its responsibility for the aforesaid untrue advertisement.
3. Conclusion: Ai-Fan-Ta labeled the sales price of the camera CASIO EX-Z110 as NT$790 in the product advertisement but failed to carry out the representation stated therein by not delivering the goods after consumers placed orders. Such an action led the representation of the advertisement to be false, untrue and misleading in violation of Article 21(1) of the Fair Trade Law.

Appendix:
Ai-Fan-Ta Digital Co., LTD.'s Uniform Invoice Number: 27882202

Summarized by Mai, Huei-Li; Supervised by Lu, Li-Na