President Direct Marketing Co., Ltd. and GIGABYTE Communications Inc.

Case:

Key Words:

worldwide limited version, premier sales, pre-order

Reference:

Fair Trade Commission Decision of November 30, 2006 (the 786th Commissioners' Meeting); Disposition (95) Kung Ch'u Tzu No. 095160

Industry:

Electronic Shopping and Mail-Order Houses (4871)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. This case originated from a statement of the public saying that: On UNIMALL's flyers regarding GIGABYTE Communications Co., Ltd.'s (hereinafter called "GIGABYTE") "SNOOPY 55th Anniversary Memorial Cellular Phones," it was stated that "only 500 phones worldwide UNIMALL now accepts pre-orders for its worldwide premier sales." However, it was found that there were more than 500 cellular phones manufactured, and the advertisement might be untrue. The FTC therefore initiated an ex officio investigation.
2. Judging from the appearance of the advertisement in question, the style of expression "only 500 phones worldwide" is much bolder and bigger than the one of other expression, "UNIMALL now accepts pre-orders for its worldwide premier sales." Therefore, the advertisement might impress consumers that UNIMALL exclusively sells this new cellular phone. Also, the representation of "only 500 phones worldwide" emphasizes the rareness of this new cellular phone to cause trading counterparts to make urgent decisions. However, it was found that the advertisement in question was jointly produced and disseminated by President Direct Marking Co., Ltd. (hereinafter called "President") and GIGABYTE. According to President, it started accepting pre-orders on September 14, 2005 and had received more than 500 orders as of September 23, 2005 (total 511 orders). A total of 1,414 cellular phones were sold during the pre-order period. Additionally, according to GIGABYTE, more than 500 cellular phones in question were manufactured worldwide. Therefore, the contents of the advertisement were inconsistent with the facts. Since the sales volume is more than the one shown in the advertisement, the advertisement has gone beyond the general degree of the public's recognition and caused the consumer into having wrong understanding about the rareness of the product. Said advertisement employed false, untrue and misleading representations and violated Article 21(1) of the Fair Trade Law.
3. After considering the motivation and purpose of the unlawful act; the business scale; and remorse shown for the act, the FTC ordered President and GIGABYTE to immediately cease the unlawful act and imposed an administrative fine of NT$440,000 on President and NT$180,000 on GIGABYTE in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
President Direct Marketing Co., Ltd.'s Uniform Invoice Number: 89608280
GIGABYTE Communications Co., Ltd.'s Uniform Invoice Number: 27283662

Summarized by Tsai, Shueh-Chiu; Supervised by Wu, Lieh-Ling