Ford Distribution Taiwan Ltd.

Case:

Key Words:

untrue advertisement, motor vehicle, product catalog, airbag

Reference:

Fair Trade Commission Decision of July 13, 2006 (the 766th Commissioners' Meeting); Disposition (95) Kung Ch’u Tzu No. 095113

Industry:

Wholesale of Motor Vehicles (4651)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. This case originated from complaint email submitted by the public saying that Ford Distribution Taiwan Ltd. (hereinafter called “ Ford Taiwan”) referred to “NCAP Crash Test 4 Star Rating” in its website advertisement and product catalogs for marketing Mazda6 motor vehicles. Ford Taiwan employed foreign crash test results (NCAP test) in its product advertisement; however, the car tested by this foreign test was equipped with side airbags. The actual car type sold domestically, however, was not equipped with side airbags. Therefore, said advertisement had possibly violated Article 21 of the Fair Trade Law.

2. Findings of the FTC after investigation:

   It was found that the Mazda6 car subject to the Euro NCAP crash test was equipped with dual front airbags, side airbags and head-protecting side curtains. Said crash test contained an offset crash test and a side impact crash test. The test result was given a 4 star rating. However, when Mazda6 was introduced in Taiwan, it was only equipped with dual front airbags without the side airbags and the head-protecting side curtains, which is the standard equipment of the car subject to the aforementioned crash test. Since airbags and protecting curtains are the safety equipment of a motor vehicle, which protect the people in the car when the car is under impact by mitigating the impact force and reducing the damage caused to human body. Therefore, such equipment has its effects for driving safety and impact protection. In other words, whether a car is equipped with relevant airbags, quantity of airbags and equipment location can affect the effects of protection. Additionally, the test result was determined by the test conditions. It is possible that different test conditions might lead to different test results. Ford Taiwan employed “NCAP Crash Test 4 Star Rating” for cars that were equipped differently from the cars subject to the test. Since two types of cars were equipped differently, it is doubtful that the test results of the two car types would be the same. Furthermore, Ford Taiwan had employed the aforesaid marketing line on its website and for its product catalogs ever since the Mazda6 was first introduced in Taiwan in September 2002. The aforesaid crash test, however, was only done in November 2003. Therefore, Ford Taiwan employed contents that were not proved at the time when these contents were published in Ford Taiwan’s advertisement. It is confirmed that Ford Taiwan made false, untrue and misleading representations. Additionally, the representations of the advertisement failed to disclose information regarding the type of car tested, relevant equipment, test amount, etc., which could cause respectable amount of general or relevant public to have wrong cognition or made wrong decisions. Thus, Ford Taiwan had violated Article 21 of the Fair Trade Law.

3. Although Ford Taiwan claimed that the marketing sentence in question was not the accent of the advertisement and was merely one of the product messages, and that the sentence was quoted from Mazda6 Product Guide Book given by the factories in Japan, said marketing sentence was still Volvo Taiwan’s representation or symbol since Ford Taiwan was the party who employed such a sentence on its website and in its product catalogs. Whether or not the sentence was the accent of the advertisement shall not bear upon the nature of the advertisement and the falseness. Based upon the aforesaid facts, Ford Taiwan had violated Article 21(1) of the Fair Trade Law. After considering the motivation, purpose, and expected improper benefit of the unlawful acts of Ford Taiwan ; the degree and duration of the acts’ harm to market order; benefits derived on account of the unlawful acts; the scale, operating condition, sales and market position of the enterprise; past violations; remorse shown for the acts and attitude of cooperation in the investigation; and other factors, the FTC ordered Ford Taiwan to immediately cease such unlawful acts and imposed an administrative fine of NT$1.56 million in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Ford Distribution Taiwan’s Uniform Invoice Number: 70501338

Summarized by Kua, An-Chi; Supervised by Yeh, Tien-Fu