Chunghwa Telecom Co., Ltd.

777th Commissioners' Meeting (2006)

Case:

Chunghwa Telecom Co., Ltd. was complained for violating the Fair Trade Law by externally disseminating false, untrue and misleading advertisement

Key Words:

mobile phone, radiation power

Reference:

Fair Trade Commission Decision of September 28, 2006 (the 777th Commissioners' Meeting), Disposition (95) Kung Ch'u Tzu No. 095146

Industry:

Telecommunications (6000)

Relevant Laws:

Article 21(3) applied mutatis mutandis to Article 21(1) of the Fair Trade Law

1. Chunghwa Telecom Co., Ltd. was complained for infringing the complainant's interest and violating Article 21 of the Fair Trade Law by employing comparison advertisement in their mobile phone applications and statements to disseminate false, untrue and misleading information such as 3G “has super low power and is healthier than PHS,” and “has low radiation power, far lower than PHS and GSM, and is the best choice for your health!”
2. Findings of FTC after investigation:
   The degree of the radiation power given by PHS system devices and 3G system devices (mobile phones) is based upon the technology and regulation of each mobile phone system (PHS, GSM, 3G). According to the “Technology Regulations for 1900 MHz PHS Devices,” the highest radiation power given by a PHS device is 10mW (equal to 10dBm). In addition, according to the “Technology Regulations for the Third Generation System Device,” the radiation power given by a 3G device can range from 21dBm to –50dBm. It is sufficient to prove that the radiation power given by a 3G system device can be 10 times greater than that given by a PHS device. Provided, however, that the distance between a device and a base established by the mobile phone system operator, base coverage and communication quality can affect the actual radiation power. In the event that a 3G system device is closer to a base or that a 3G system base has more coverage, the radiation power given by such a 3G system device could be lower than that given by a PHS device. Therefore, no certain standard can be taken to determine the radiation power given by these two systems. Based on the various test results produced by the Directorate General of Telecommunications, it is shown that in certain areas, the radiation power given by a 3G system device can be higher than that given by a PHS device. Moreover, according to the evaluation opinions given by the Directorate General of Telecommunications, in an area that is not fully covered by a base, a 3G system device might give higher radiation power than a PHS device.
3. Grounds for disposition:
   1. In light of the keen competitions between each mobile phone system (PHS, GSM, 3G), business operators strive for trading counterparts through not only favorable prices and communication quality, but also the degree of radiation power given by the mobile phones. Due to the concern for human health, the radiation power has always been given high attention by consumers and been the key point of competition among mobile phone systems. The radiation power is affected by the distance between a device and a base established by the mobile phone system operator, base coverage and communication quality. Therefore, the system establishment can be rather relevant, but no specific standard can be used to determine the degree of radiation power. However, Chunghwa's business places located in the east and south districts employed in their mobile phone applications delivered to random customers and statements information that is sufficient to mislead consumers into believing that Chunghwa's 3G system devices have lower radiation power than PHS devices at all time and that those devices are the best choices for consumers' health. Such an advertisement made misleading representations regarding the service quality provided.
   2. Taking into consideration the motivation, purpose, and expected improper benefit of the unlawful acts of Chunghwa; the degree and duration of the acts' harm to trading order, the FTC ordered Chunghwa to immediately cease the aforesaid unlawful acts and imposed an administrative fine of NT$2,720,000.

Appendix:
Chunghwa Telecom Co., Ltd.'s Uniform Invoice Number: 96979933

Summarized by Chen, Haw-Kae; Supervised by Liou, Chi-Jung