All Chinese Internet Inc.

Case:

Key Words:

false, untrue, misleading, business secret, recruitment website

Reference:

Fair Trade Commission Decision of March 29, 2007 (the 803rd Commissioners' Meeting); Disposition (96) Kung Ch'u Tzu No. 096071

Industry:

Other Information Supply Services Not Elsewhere Classified (6399)

Relevant Laws:

Article 19and 21 of the Fair Trade Law

Summary:

1. This case originated from a complaint letter (Exhibit A) filed by 104 Corporation (hereinafter called the "Complainant") stating that: All Chinese Internet Inc. (hereinafter called the "Respondent") had banners on the top of its homepages of "1111 Job Bank" and "1111 Entrepreneurship & Franchising" saying "1111 Job Bank – the biggest job bank of the nation," "1111 Entrepreneurship & Franchising – the biggest entrepreneurship & franchising website of the nation," and "up to 2004, 1111 website has accumulated a growth of resumes of 2.12 million; has 6 million web pages reviewed daily; has more than 2.12 million resumes; has more than 510,000 visitors everyday; has 4,000 new valid resumes added everyday; has more than 22,000 companies simultaneously using talent inquiry services online; and has more than 80,000 people simultaneously searching for jobs online." However, the aforesaid data was inconsistent with the survey report and the internal analysis report of the Respondent and therefore possibly untrue. In addition, in order to increase resumes of job seekers for its own website, since 2002, the Respondent had instructed its employers, Mr. Cheng and other three people, to connect to the Complainant's website and retrieve the IDs and password of seven of Complainant's contracted clients. The Respondent inappropriately used aforesaid information to view resumes of those job seekers who registered with the Complainant and replicate the same. The Respondent had engaged in unfair competition in violation of Article 19(v) of the Fair Trade Law.
2. It was found that the Respondent, in order to increase resumes of job seekers for its own website, had instructed its employees since 2002 to improperly retrieve the IDs and password of seven of the Complainant's business clients who paid for talent search. The Respondent also inappropriately used the aforesaid IDs and password to log into the Complainant's computer and view tens of thousands of resumes of those job seekers who registered with the Complainant. The Respondent further exported and replicated the data and downloaded the same in its computer. After screening the aforesaid data, the Respondent made a list of those who did not registered with the Respondent and submitted the same to the customer service representatives to send email and invite these people to register with the Respondent for the purpose of increasing the Respondent's job seeker database. The aforementioned fact was determined by the Taipei District Court 93 Decision Yi-Tzu No. 1431 and interrogation records provided by the interested parties at the police station.
3. With regard to the issue that whether the "job seeker's information registered with a recruitment website" shall fall under Article 19(v) of the Fair Trade Law providing "the secret of production and sales, information concerning trading counterparts or other technology related secret of any other enterprise," most scholars suggested to refer to Article 2 of the Trade Secret Act which provides the descriptions of the "innovation," "value," and "secrecy." Present recruitment websites are highly competitive. Based upon the consideration of privacy and security, resumes registered by job seekers with the recruitment websites shall kept private and not searchable by the general public. Recruitment websites shall keep job seekers' private information, such as names, telephone numbers, email addresses, and addresses, confidential. After sorting and arranging the information according to the professions, job seekers' information may be easy for the recruitment websites' trading counterparts to use. The editing and establishment of human resources database and the convenience to search are important factors that enterprises who are seeking for talents would consider prior to paying the recruitment websites for such services. The more the recruitment websites are dedicated to the sorting process of the job seekers' information, the more the trading counterparts would pay for the account and using the password. Since the trading counterparts would have to separately purchase a "password" to log in as a "member" to utilize the job seekers' information sorted and arranged by the recruitment websites, such transaction shall meet the description of "innovation" and "secrecy." Furthermore, according to the survey on charges of 10 recruitment websites with the highest sales amount in 2005, those 10 recruitment websites all provided job seekers free resume publishing and various job seeking services while enterprises looking for talents would have to pay to obtain complete resume or interview or hire job seekers. Enterprises that are looking for talents depend on the completeness and convenience of job seekers' information before they decide to pay a particular recruitment business for its services. Therefore, said information is considered information of production and sales which contains economic value to the recruitment businesses. It was also found that the trading counterparts of the Complainant must sign a contract and pay for services before they can obtain their membership and password. The trading counterparts should use a pass code given by the Complainant to log in their own webpage to search in the talent database for detailed resumes of all job seekers. Such information economic value of exclusiveness based upon whether such information is paid for or not. Additionally, in light of the privacy of the job seekers and the security of the information, the recruitment websites keep the information confidential through the mechanism of using password. Those who do not sign the contract with the Complainant would not be able to obtain job seekers' personal information contained in an exclusive webpage. Therefore, the Complainant had taken reasonable measures of confidentiality, and the information shall meet the descriptions of "secrecy." Based upon the aforementioned points, the Respondent's act to employ an improper method to obtain job seekers' information and use the same for its commercial purpose had met the description of using "information of production and sales" set forth in Article 19(v) of the Fair Trade Law. In conclusion, the Respondent had violated Article19 (v) of the Fair Trade Law by employing an improper method to download and replicate the job seekers' resumes on the Complainant's website, confidential information of production and sales.
4. The Respondent claimed on its web pages "1111 Job Bank – the biggest job bank of the nation," "1111 Entrepreneurship & Franchising – the biggest entrepreneurship & franchising website of the nation." However, according to relevant market survey, there were other enterprises having higher sales amount and market shares than the Respondent. The Respondent did not disclose the target and the basis of such comparison on the web page. Therefore, Internet users could not confirm the accuracy of such representations. The Respondent also admitted that it could not provide any fair and objective statistics to support the truthfulness of such representations. The representations made by the Respondent on its web page were sufficient to mislead the general or relevant public into believing that the Respondent is the number one business in the industry. As a result, such representations are false, untrue and misleading. Additionally, the Respondent claimed that "up to 2004, 1111 website has accumulated a growth of resumes of 2.12 million; has 6 million web pages reviewed daily; has more than 2.12 million resumes; has more than 510,000 visitors everyday; has 4,000 new effective resumes added everyday; has more than 22,000 companies simultaneously using talent inquiry services online; and has more than 80,000 people simultaneously searching for jobs online." It was found that up to 2004, the number of resumes registered on the Respondent's website was less than 1,950,000. The other evidence provided by the Respondent was the data produced after March 2005 and could not support the aforesaid claim. The Respondent failed to submit any objective and fair proof to support its claim, meaning that such claim is groundless, and therefore violated Article 21(1) applied mutatis mutandis to 21(3).
5. After considering the motive; the degree of the illegal act's harm to market order; the circumstances of the violation; the scale of the enterprise; remorse shown for the act and attitude of cooperation in the investigation; and other factors, the FTC, in accordance with the fore part of Article 41 of the Fair Trade Law, ordered the Respondent to immediately cease the unlawful act and imposed an administrative fine of NT$1,000,000 for the violation of Article 19(v) and NT$500,000 for the violation of Article 21(1) applied mutatis mutandis to 21(3). The total amount of the administrative fines imposed was NT$1,500,000.

Appendix:
All Chinese Internet Inc.'s Uniform Invoice Number: 16776387

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