1133rd Commissioners' Meeting (2013)
Case:
Taiwan Mobile violated the Fair Trade Law by posting false advertisement of "free intra-network calls"
Key Word(s):
Misleading, free intra-network calls
Reference:
Fair Trade Commission Decision of July 24, 2013 (the 1133rd Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 102105
Industry:
Telecommunications (6100)
Relevant Law(s):
Paragraph 3 of Article 21 of the Fair Trade Law and Paragraph 1 of the same article applicable mutatis mutandis
Summary:
Between December 15, 2012 and March 15, 2013, Taiwan Mobile posted an advertisement in the "myfone Digital SC Shopping Guide." Next to a red circle (about 1.6cm in diameter) at the top of the page were white characters (each about 0.4x0.4 to 0.5x0.5cm in size) stating that "free intra-network calls" and the wording of "sign up for a designated plan to enjoy free intra-network calls (2-year contract) or use our wireless connection service." In the meantime, below the said wording was a blue dot (about 0.7cm in diameter) and the promoted contract plans of "special intra-network call offer 401+wireless connection 699," "super-saving 699+mobile connection 699," and "free intra-network calls" printed in white characters (about 0.2x0.2cm).
| (1) | The advertisement gave the public the impression that under the terms of the contract phone plans, subscribers could enjoy "free intra-network calls." Although the "thoughtful reminder" at the bottom carried the wording of "the free intra-network voice calls are limited to 2,500min/month, the amount of time exceeding 2,500 minutes each month will be charged according to the 401/699 intra-network call rate," the text totaled to 19 lines with 0.1cm space between every two lines and each character measured merely about 0.1x0.1cm in size. On top of that, the restriction explanation appeared only in line 3, line 4 and line 6. Most people would find it difficult to read and were thus unaware of the restriction. Meanwhile, since other telecom services did not put any restriction on their free intra-network call offers and the offer of "free intra-network calls " in the said advertisement was repeatedly displayed in larger print (respectively in 0.2x0.2, 0.4x0.4 and 0.5x0.5cm), under such circumstances, it would not occur to consumers that there would be a restriction. Therefore, the advertisement was likely to mislead consumers into believing that there was no restriction on free intra-network calls and the conduct was thus also a practice of unfair competition for other businesses that offered free intra-network calls without restrictions. Consequently, the FTC concluded that it was a misleading representation.
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| (2) | Taiwan Mobile contested that subscribers signing up for the plan had to fill out the plan agreement and the "content and restriction of the special offer" in Field No. 4 said clearly that "free intra-network calls are limited to 2,500 minutes per month and the exceeded amount of time will be charged according to the voice call rate chosen by the subscriber." However, Taiwan Mobile printed out 1.62 million copies of the advertisement and more than tens of thousands of people signed up for the plans in question. The incentive that attracted consumers to sign up was obviously quite strong. In the perception of the general public, representations or other contents of advertisements for commercial products or services had to be consistent with facts; otherwise, their rights and interests were thus jeopardized. At the same time, the effect of the said false advertisement was a practice of unfair competition for competitors who put up advertisements in accordance with their regulations. Therefore, providing supplementary explanations or taking remedial measures after the contracts were signed did not change the liability incurred from the false advertising before the contracts were signed. Taiwan Mobile could not use such explanations or remedial measures taken as an excuse for the exemption of its liability. Therefore, the FTC acted according to the first section of Article 41(1) of the Fair Trade Law and imposed on Taiwan Mobile an administrative fine of NT$200,000.
Appendix: Summarized by Chen, Chien-Yu; Supervised by Chi, Hsueh-Li |