Asia Pacific Telecom. Co., Ltd.

Case:

Key Words:

cell phone call charge, comparative advertising

Reference:

Fair Trade Commission Decision of September 14, 2011 (the 1036th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 100168

Industry:

Telecommunications (6100)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The FTC received complaints that Asia-Pacific Telecom Co., Ltd. (hereinafter referred to as APT) claimed in a TV commercial "In Taiwan…cell phone call charges are more than NT$5 per minute but APT's over 2.85 million subscribers enjoy free calls within APT's network, NT$2.88/min calling outside the network, NT$2.88/min calling landlines, and NT$2.88/min for international calls." There was suspect of violation of the Fair Trade Law in this advertisement.
2. The issue in question was the commercial gave its receiver the overall impression that all domestic telecom service providers other than APT charged more than NT$5/min for cell phone calls. APT expressed that the mobile communications business statistics posted on the official website of the National Communications Commission (hereinafter referred to as the NCC) was based on the rough calculation of the outgoing call minutes (including both inside and outside the network of various providers) and the total telecom business income indicated the average 2G and 3G call charge was NT$5.32/min. However, according to the opinion offered by the NCC to the FTC, as different operators offered different packages of various rates in response to market demands and user behaviors, it was impossible to calculate the average call charge per minute based on the said statistics. The FTC's investigation also revealed that the comparison made in the said commercial was referring to the difference between APT's "Happy Call 888 Package" which offered subscribers free calls inside the APT network and only NT$2.88/min for calls outside the network or to landlines or foreign countries and "in Taiwan, cell phone call charges are more than NT$5 per minute." However, the users of the said package only constituted 2.6% of all of APT's subscribers. Regardless of the truthfulness of APT's claim about its phone call rate, it was not true that every charge per minute of other mobile telecommunications service operators for calls inside or outside their networks or to landlines was higher than NT$5 when similar packages (around NT$888 per month) were considered. Apparently, APT had selectively pointed out in the commercial items that were to its advantage and intentionally overlooked the fact that other telecom service providers also offered packages that offered per-minute call charges lower than NT$5. Consequently, the comparison was unfair and could result in loss of trading opportunities for other telecom service providers. As it was inconsistent with legitimate trading order and market performance competition, the conduct was obviously unfair and able to affect trading order in violation of Article 24 of the Fair Trade Law. Acting according to the first section of Article 41 of the same law, the Commission therefore ordered APT to immediately cease the unlawful act and at the same time imposed on the company an administrative fine of NT$500,000.

Appendix:
Asia Pacific Telecom Co., Ltd.'s Uniform Invoice Number: 70771579

Summarized by Chen, Chien-Yu; Supervised by Chen, Chun-Ting