Kwong Lung Enterprise Co., Ltd.

Case:

Kwong Lung Enterprise Co., Ltd. violated the Fair Trade Law by posting a false advertisement claiming that it was the "exclusive manufacturing of feather bedding and pillows for department store brands"

Key Word(s):

False advertisement, feather bedding and pillows, exclusive

Reference:

Fair Trade Commission Decision of June 4, 2014 (the 1178th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.103066

Industry:

Retail Sale of Home Furnishings in Specialized Stores (4743)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC received complaints from another company stating that Kwong Lung Enterprise Co., Ltd. (hereinafter referred to as the "Company") posted a false advertisement claiming that it was the "exclusive manufacturer of feather bedding and pillows for department store brands"
2. Findings of the FTC after investigation:
   

   The Company's advertisement claimed that it was the "exclusive manufacturer of feather bedding and pillows for department store brands" However, the complainant provided evidences showing that Royal Co., Ltd. (hereinafter referred to as "Royal") also had shops in department stores around the country, along with its factory registration with the Ministry of Economic Affairs, feather purchase invoice, proof of delivery of feather bedding and pillows, as well as photos of the production process. These materials proved that Royal was a manufacturer of feather bedding and pillows whose products were sold in department stores around the country. Hence, the Company's advertisement was a false, untrue or misleading representation as regulated by Article 21 of the Fair Trade Law.

3. Grounds for disposition:
   

   Although the Company argued that it was the only manufacturer of feather bedding and pillows for department store brands because of its complete production process from selecting and importing raw materials, washing, classification, sterilization, testing, nano-processing, fabric cutting, producing comforter shell, filling, to sales, and that Royal couldn't be considered a manufacturer because it only purchased and processed feathers for filling the comforter shell. The FTC found that feathers processed by Royal were filled in comforter shells and made into feather blankets. Although Royal did not process raw materials, one couldn't claim that Royal was not a bedding and pillow manufacturer. Based on the professional opinion offered by the Ministry of Economic Affairs, factories that only fill blankets with feathers still fall under the scope of "blanket manufacturing" in the made-up textile articles manufacturing industry and thus the Company's argument was not acceptable. The FTC therefore determined that the Company's advertisement contained false, untrue and misleading representations in violation of Article 21(1) of the Fair Trade Law, and imposed an administrative fine of NT$200,000.

Appendix:
Kwong Lung Enterprise Co., Ltd.'s Uniform Invoice Number: 33111800

Summarized by Su,Min-Huang; Supervised by Yang,Hsiu-Yun