A complaint filed against Far Eastern Electronic Toll Collection Co., Ltd. for making false ETC advertisement on television, the information was not completely disclosed and asymmetric, and violated the Fair Trade Law

Chinese Taipei

Case:

Key Words:

Electronic Toll Collection (ETC), on-board unit (OBU), information asymmetry, false advertisement

Reference:

Fair Trade Commission Decision of March 30, 2006 (the 751st Commissioners’ Meeting), Letter Kung San Tzu No. 0950002763

Industry:

Other Information Supply Services (7329)

Relevant Laws:

Article 21, Article 24 of the Fair Trade Law

Summary:

1. This case originated from a complaint filed by elected representatives in March 2006, indicating that Taipei High Administrative Court has rendered a verdict to revoke the National Freeway Bureau’s screening announcement that Far Eastern Alliance was the “priority applicant” of the establishment and operation of electronic collection system. However, Far Eastern Electronic Toll Collection Co., (hereinafter referred to as Far Eastern) has made promotional advertisements on television intensively between March 1, 2006 and March 7, 2006 without performing the responsibility of reminding its consumers the risk of installing OBU. Far Eastern may have made false advertisements that did not disclose full information and also were asymmetric, thus has violated the provisions of the Fair Trade Law.
2. Upon the investigation, the Fair Trade Commission (FTC) found Far Eastern has intensively broadcasted seven advertisements on television between March 1, 2006 and March 7, 2006. Amongst, six advertisements did not show any misleading representations on the future operation of the electronic collection system and its influence on the rights and interests of consumers. The content of said advertisements were only the sharing of experiences given by users of the electronic collection system. The other television advertisement announced, “The service of electronic collection will nonetheless continue. It is guaranteed that the OBU can be returned and the original purchase price will be refunded if there is any problem.” Such announcement was made according to the agreement signed between Far Eastern and Taiwan Area National Freeway Bureau, MOTC (hereinafter referred to as National Freeway Bureau) on February 25, 2006, and the National Freeway Bureau’s letter of March 3, 2006 demanded the users of OBU must reach 100,000 by March 9, 2006. Therefore, the television advertisements showed the experiences of electronic collection users and explained the measures used to protect the rights and interests of consumers. It is obvious that Far Eastern did not have any intention to make false representation on purpose. Furthermore, in addition to notify consumers the messages related to the future operation of electronic collection and its influence on the rights and interests of consumers through the broadcasting of television advertisements, Far Eastern has held a press conference on February 26, 2006. Then, Far Eastern published an open letter on newspaper on February 27 and the same letter was exhibited at the company’s own retail outlets. The said letter stated clearly, “in coordination with the government’s instruction, our company (refer to Far Eastern, similarly hereafter) will continue to operate normally”, and “in the case that consumer wishes to return the OBU and card, we will handle the return willingly” and “our company promised to buy back the OUB at the original selling price if we loose the lawsuit in the court’s ruling.” Actually, in accordance to the official declaration issued by the Ministry of Transportation with regard to the verdict of Taipei High Administrative Court, Far Eastern was permitted to continue the operation and totally liable for the trading disputes related to OBU and IC cards. Such permission was to ensure the continuation of ETC operation and the rights and interests of the users. The consumers without doubts will receive refunds for their returned OBU or cards when they filled up the return application forms at any Far Easter’s own retail outlets. Therefore, it is still difficult to conclude that there was false or misleading representation in the conduct of Far Eastern.
3. In addition, it is found that according to the “Electrical Toll Collection’s Establishment and Operating Contract” signed between Far Eastern and National Freeway Bureau, the future operation of electrical toll collection system is determined by the policy decision of the transportation competent authority. Far Eastern did not have any need of concealing the messages related to the future operation of electronic collection system and its influence on the rights and interests of consumers. Furthermore, the verdict of Taipei High Administrative Court was known across the country after reported by the media. Therefore, there was no structural asymmetry in the consumers’ acquisition of important trading information. Moreover, when Far Eastern carried out promotions in order to coordinate with the contract, agreement or instruction of National Freeway Bureau, it has published open letters several times as well as exhibited the said open letter at all of its own retail outlets. Far Eastern did not conceal the Taipei High Administrative Court’s verdict of revoking Far Eastern Alliance as the “priority applicant” of the bidding of establishment and operation of electronic collection system. According to the official declaration issued by the Ministry of Transportation with regard to the Taipei High Administrative Court’s verdict, Far Eastern was permitted to continue the operation but was completely liable for the trading disputes related to OBU and IC cards in order to ensure the continuation of ETC operation and the rights and interests of the users. Certainly, the consumers will receive refunds for their returned OBU or cards when they filled up the return application forms at any Far Easter’s own retail outlets. Therefore, with regard to the future operation of electronic collection system and its influence on the rights and interests of consumers, Far Eastern did not engage in any deceptive conduct.
4. The FTC’s 751st Commissioners’ Meeting reached a decision on March 30, 2006 that in accordance with the available evidences, it is still not substantiate to conclude that the advertising and promotion activities conducted by Far Eastern in the electronic toll collection have violated the provisions of Article 21 and Article 24 of the Fair Trade Law. As to whether a warning notice should be included in the ETC television advertisement, the inclusion of warning notice is for reminding consumers to take into consideration the potential risk (or loss) before their purchases. However, as explained earlier, Far Eastern did not purposely conceal the result of Taipei High Administrative Court’s verdict in its trading with consumers. Furthermore, the National Freeway Bureau has guaranteed in its official declaration that the government is prepared to continue the ETC operation if Far Eastern looses the lawsuit. The rights and interests of users who have already installed the ETC system also will be protected. Comparing to the potential hazard of tobacco and liquor product to human’s health, the degree of risk for ETC is rather insignificant. However, the policy consideration of including the warning notice is within the authority of National Freeway Bureau, thus the FTC has submitted this issue to the competent authority, the Ministry of Transportation, for decision.

Summarized by: Lai, Mei-Hua;
Supervised by: Shen, Li-Yu

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