Yahoo! Taiwan Holdings Limited, Taiwan Branch (H.K.)

Case:

Key Words:

online auction, largest in Taiwan, used vehicles market

Reference:

Trade Commission Decision of December 22, 2009 (the 946th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 098175

Industry:

Web Portals (6311)

Relevant Laws:

Article 21(3) of the Fair Trade Law applying mutatis mutandis to 21(1)

Summary:

1. This case originated from a complaint stating that: In the home page of YAHOO! Kimo auction website and the webpage of "auction/auto and motorcycles," it was claimed that YAHOO! was the "largest used vehicles market in Taiwan." However the statement was not supported by the objective statistics or sources to explain what the comparison criteria were. It was also discovered that the numbers of vehicles on other used car sales websites, such as Ruten, 168Car, iCar, Ocar, and used.carnews.com, were much higher than that of YAHOO! Kimo auction website. This finding showed that YAHOO! Kimo was involved in untrue advertisement.

2. The statement of being "the largest used vehicles market in Taiwan" by Yahoo! Taiwan Holdings Limited, Taiwan Branch (H.K.) (hereinafter referred to as YAHOO!) on the YAHOO! Kimo auction website gave out an impression to the general public that the vehicle auction site of YAHOO! Kimo was the largest used vehicles trading market in Taiwan. This impression would have respectable effect of solicitation on sellers who are looking to post an advertisement to sell cars. The objective description of being "the largest" should be supported by objective comparison data or surveys. YAHOO! claimed that the statement of being "the largest used vehicles market in Taiwan" shall refer to the fact that the YAHOO! Kimo auction website provided "the best results in concluding used vehicle sales." YAHOO! Also provided the "ARO InsightXplorer Study Reports" prepared by InsightXplorer Co., Ltd. (hereinafter referred to as InsightXplorer) for May and June with regard to the overall performance of YAHOO! Kimo auction website. Said reports indicated that the numbers of YAHOO! Kimo's reach rate, unique visitors, and total page views were all higher than those of other open auction websites which showed that YAHOO! Kimo did gather more online sales. YAHOO! claimed that when there existed objectively multiple reasonable explanations, no false or untrue representation or symbol should be present if one of the explanations was true. However from the overall observation of the phrase "the largest … in Taiwan" as used in the advertisement, the scope of objective explanation should be different from YAHOO!'s interpretation of being "the largest website in Taiwan." YAHOO! also admitted that it failed to compare the trade numbers of its auto auctions with that of other used car markets. Moreover, according to InsightXploer, the scope of these "ARO InsightXplorer Study Reports" encompassed only the "Internet/Auction" and not the used car websites. It was found that YAHOO! Kimo auction website provided for numerous product classifications. The numbers of the reach rate, unique visitors, and total page views of the entire auction website might not necessarily equal to those of the car auction classification. YAHOO!'s statement of its website providing "the best results in concluding used vehicle sales" was merely a subjective cognition and not supported by any objective data, such as sales numbers of other used car markets or surveys. Thus the advertisement in question indeed constituted false, untrue, and misleading representations. The FTC ordered YAHOO! to immediately cease the unlawful act and imposed an administrative fine of NT$100,000.

Appendix:
Yahoo! Taiwan Holdings Limited, Taiwan Branch (H.K.)'s Uniform Invoice Number: 27240313

Summarized by Chen, Chien-Yu; Supervised by Hsu, Hung-Jen