Hitachi Sales Corporation of Taiwan

Case:

Key Words:

false, untrue, misleading, washing machine

Reference:

Fair Trade Commission Decision of May 10, 2007 (the 809th Commissioners' Meeting); Disposition (96) Kung Ch'u Tzu No. 096092

Industry:

Wholesale of Electrical Household Appliances (4561)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. In consideration of the circumstance that the representations in the advertisements to sell washing machines did not often conform to the labels of the products and there could be violations of the Fair Trade Law, the FTC initiated an ex officio investigation to determine whether the representations in the advertisements to sell branded washing machines violated the provisions of the Fair Trade Law. After investigations, it was found that the representation, "Large Two-Bowl Combination PA100AS 10kg," in the online advertisement of Hitachi Sales Corporation of Taiwan (hereinafter called "Hitachi Taiwan Corp.") was untrue.
2. It was found that washing machines fell under the types of articles which must be inspected by the Ministry of Economic Affairs. In accordance with the letter issued by the Bureau of Standards, Metrology and Inspection, the Ministry of Economic Affairs, Hitachi Taiwan Corp. had nine models of washing machines which passed the inspection of the same Bureau, and these models did not include "PA100AS." It was also found that for the washing machines concerned, the Labeling Standard for Electric Alliances provided by Hitachi Taiwan Corp. and the Registration Certificate for Product Inspection issued by the said Bureau were attributed to the model "PS100AS," and not "PA100AS." Additionally, Hitachi Taiwan Corp. admitted that it did not sell the model "PA100AS"; "PA100AS" in the website should be referred to "PS100AS" and there was an error in the website. Furthermore, it provided the evidence, its advertisements in the United Daily News dated July 21, 2005 and July 2006. Therefore, the part which showed a publication error in the website and that "PA100AS" should be referred to "PS100AS" was with grounds.
3. It was found that "PS100AS" in the Labeling Standard for Electric Alliances was labeled, "Wash: 8kg Hydro-Extraction: 8kg." It was also found that the letter issued by the said Bureau stated that the maximum washing capacity and the maximum hydro-extraction capacity of "PS100AS" were 8kg respectively – it could be proved by the Arrangement Table of Washing Capacity and Dry Linen Capacity for a portion of models produced by Hitachi Taiwan Corp and Registration Certificate for Product Inspection for the said model provided by the said Bureau. Therefore, the maximum washing capacity and the maximum hydro-extraction capacity of "PS100AS" shall be all together 8kg. As the major reference, the loading wash capacity, affects largely on consumers prior to making their decisions, Hitachi Taiwan Corp. which is the importer of the products concerned and knows the loading wash capacity of the products concerned quite well, shall truly represent information that is related to the products. However, Hitachi Taiwan Corp. presented the maximum washing capacity and the maximum hydro-extraction capacity as 10kg respectively instead of 8kg in the website – it did not label the actual loading capacity for both washing and hydro-extraction, which was 8kg as approved by the said Bureau. Obviously, such a representation did not match the fact. It was additionally found that, although Hitachi Taiwan Corp. corrected the error in the website concerned after finding it on July 24, 2006, the inconsistency between the online representation and the fact was still a reality. In conclusion, the Hitachi Taiwan Corp.'s online representation, "Large Two-Bowl Combination PA100AS 10kg," was false, untrue and misleading and it was sufficient to find Hitachi Taiwan Corp. a violation of Article 21(1) of the Fair Trade Law.
4. After considering the motive of the unlawful act of Hitachi Taiwan Corp. the degree of the illegal act's harm, the circumstances of the violation, the scale of operation, and the attitude after the investigation, the FTC ordered Hitachi Taiwan Corp. to immediately cease the aforesaid unlawful act and imposed an administrative fine of NT$300,000 in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Hitachi Sales Corporation of Taiwan's Uniform Invoice Number: 23526766

Summarized by Lee, Wan-Chun; Supervised by WU, Lieh-Ling