Yuelao International Information Network Co., Ltd.

Case:

Yuelao International Information Network Co., Ltd. violated the Fair Trade Law by posting a comparative advertisement on its website

Key Word(s):

Comparative advertising, matchmaking institute

Reference:

Fair Trade Commission Decision of June 4, 2014 (the 1178th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.103071

Industry:

Other Personal Service Activities Not Elsewhere Classified (9690)

Relevant Law(s):

Articles 21 and 24 of the Fair Trade Law

Summary:

1. The FTC received complaints from individuals stating that Yuelao International Information Network Co., Ltd. (hereinafter referred to as the "Company") violated the Fair Trade Law by posting a comparative advertisement on its website claiming to have "the biggest number of members" but not providing any evidences. The Company also made a false representation in the comparative advertisement that its competitors do not offer a "seven day refund window" and "refund mechanisms," and therefore was suspected of violating Article 24 of the Fair Trade Law by attempting to produce an impression of the unfair comparison results.
2. Findings of the FTC after investigation:
   

   Regarding the Company's claim that it had "the biggest number of members" on its website, this statement gave the general public the impression that the Company was the biggest among all matchmaking institutes. Although the Company stated that it had 310 thousand members registered on its website, far more than any of its competitors, the bottom of the comparative advertisement in question did not specify that "the biggest number of members" referred to the number of members registered online. In the comparison chart, the items "membership fee," "refund mechanism," and "seven day refund window" were intended for members that paid the membership fee. Hence, the impression consumers had when seeing the Company's statement of having "the biggest number of members" would be the number of people who signed contracts with the Company, paid the membership fee, eligible to participate in its events, and enjoy the 7 day refund window and refund mechanism. However, the FTC found that the Company did not have the biggest number of members who paid the membership fee and enjoy matchmaking services among all competitors. The Company's statement was therefore a false, untrue and misleading representation in violation of Article 21(3) applicable mutatis mutandis under Article 21(1) of the Fair Trade Law.

3. Grounds for disposition:
   

   The Company marked the "seven day refund window" and "refund mechanisms" of its competitors with an "X" in the advertisement, but the FTC found that most of the Company's competitors had a refund window and refund mechanism. Hence, the Company's conduct was a false or misleading representation that resulted in unfair comparison results. The unfair conduct was capable of affecting trading order in the market and was in violation Article 24 of the Fair Trade Law. The FTC therefore imposed an administrative fine of NT$200,000 on the Company.

Appendix:
Yuelao International Information Network Co., Ltd.'s Uniform Invoice Number: 53089355

Summarized by Wu, Jia-Lin; Supervised by Chen, Jen-Ying