PresiCarre Co., Ltd. and Carrefour Taiwan Co. Ltd.

Case:

Key Words:

advertisement; false, untrue and misleading; discount coupon; restriction; consumer voucher

Reference:

Fair Trade Commission Decision of March 18, 2009 (the 906th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 098047

Industry:

Other Retail Sale in General Merchandise Stores (4719)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. The case was reported: in response to the financial crisis, our government issued the "consumer voucher" at the beginning of year 2009 in order to stimulate economy. Enterprises propose all kinds of promotions for consumer voucher to encourage more business. Accordingly, Carrefour releases a promotion "get discount coupons of NT$7,200 when spending more than NT$3,600 consumer voucher at Carrefour." The promotion was widely broadcasted on TV, newspaper, radio, and in-store posters. On the advertisement, it specified "purchase anything you want (except for cigarettes)" and that the coupon is not applicable to "Carrefour voucher and cigarette products." However, once a consumer actually gets a "discount coupon," he/she will see the "directions for using the discount coupon" on back of the discount coupon, which listed several product categories that are not applicable to the discount coupon. The product categories include: beer, liquors (such as whiskey, brandy, XO, and kaoliang liquor), delivery or installation fees, extended warranty for home appliances, and so on.
2. Investigation and Results:
   After the on-site survey, our investigator finds that the categories of products actually applicable for the discount coupon are different from that on the advertisement, and the subject indicates that the categories specified on back of the "discount coupon" shall prevail.
3. Grounds for Disposition
   1. Regarding the main advertisement
      Carrefour Taiwan Co. Ltd. (hereinafter referred to as Carrefour Taiwan) is an affiliate company of PresiCarre Co., Ltd. (hereinafter referred to as PresiCarre); its advertisement is solely sponsored and produced by PresiCarre. Carrefour Taiwan has not reviewed or approved the advertisement. However, Carrefour Taiwan and PresiCarre are independent legal entities. The disputed advertisement is displayed in Carrefour stores national-wide; the promotion for discount coupon applies to all domestic Carrefour stores; Carrefour Taiwan receives operating income from the said advertisement; and the receipt a consumer gets after purchasing at Carrefour is issued respectively by Carrefour Taiwan and PresiCarre. Thus, both Carrefour Taiwan and PresiCarre are subjects in this case.
   2. FTC compares contents in the promotion advertisement and the notice on back of the discount coupon, and it finds the two indeed indicate different types of products. Carrefour tries to encourage consumers spend their consumer vouchers by suggesting a broader range of applicable items; while later on, the company adopts a more restricted rule on applicable product categories. Since Carrefour's advertisement failed to clearly disclose the true restrictions on the "discount coupon," it violated Article 21 of the Fair Trade Law regarding false advertisements. PresiCarre and Carrefour Taiwan are fined NT$ 2,500,000 and NT$ 500,000, respectively.

Appendix:
PresiCarre Co., Ltd.'s Uniform Invoice Number: 22662550
Carrefour Taiwan Co. Ltd.'s Uniform Invoice Number: 70384248
Summarized by Lin,Yu-Ching; Supervised by Chi, Shueh-Li