Taiwan Hitachi Co., Ltd.

Case:

Key Words:

air conditioning products, the only, number 1 in sales

Reference:

Fair Trade Commission Decision of July 15, 2009 (the 923rd Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 098098

Industry:

Domestic Air-conditioning Equipment Manufacturing (2851)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

1. An enterprise reported that Taiwan Hitachi Co., Ltd. made the following statements in advertisements: "the only company receiving Japanese energy-saving award in Japan Heisei 19th year" and "the only company receiving the Japanese energy-saving award for 8 times." However, the complainant also received the Japanese energy-saving award in Japan Heisei 19th year. In addition, another enterprise and a person reported that Taiwan Hitachi Co., Ltd. alleged itself to "to be number 1 in market sales for 18 years" in advertisements without any specific illustration or supporting evidences for this statement. The advertisement may contain untrue contents.
2. Investigation and Results: according to the Economic Division, Representative Office in Japan, Bureau of Foreign Trade of the Ministry of Economic Affairs, there were indeed air conditioning products other than the "Hitachi" brand that received the Japanese energy-saving award for at least 8 times and the Japanese energy-saving award in Japan Heisei 19th year. In addition, the claim to be "the number one in market sales for 18 consecutive years" failed to specify supporting evidences. Taiwan Hitachi Co., Ltd. alleged that it based the advertisement on "GFK" survey on air-conditioning products, the "1994-2000 ACR Survey" by United Advertising, the "top ten brand of air-conditioners by market shares, 2000-2008" survey by Nielsen, the survey on "ideal brand" and "actual purchased brand" by Breakthrough Magazine, and surveys by Reader's Digest, etc. However, only the "GFK" survey on air-conditioning products was sufficient to show that Taiwan Hitachi Co., Ltd. is the top one brand in air-conditioner sales from 2004 to 2007. The rest surveys do not directly specify the annual sales volume or amount of air-conditioning products or are not related to the sales volume or amounts of brands at all.
3. Grounds for Disposition
   The Commission found the following statements in Taiwan Hitachi Co., Ltd.'s advertisements to be contradicted to facts: "the only company receiving Japanese energy-saving award in Japan Heisei 19th year" and "the only company receiving the Japanese energy-saving award for 8 times." Such wording may create misbelieves or wrong decisions in customers, and they involve false, untrue, and misrepresentation. In addition, when an enterprise uses specific wording to represent or identify a product or service in advertisement, such as "the only," "the first," "the top," or "the largest" or other objective descriptions, such statements shall be supported by objective evidences. Taiwan Hitachi Co., Ltd. failed to propose evidence showing it to be the number 1 in sales for 18 years. Therefore, the allegation of "the number 1 in market sales for 18 years" in advertisements is groundless. It violates Article 21 of the Fair Trade Law, and an administrative fine of NT$ 600,000 is imposed.

Appendix:
Taiwan Hitachi Co., Ltd.'s Uniform Invoice Number: 11915305
Summarized by Yu, Wei-Jhen; Supervised by Chi, Shueh-Li