Yulon Nissan Motor Co., Ltd.

Case:

Yulon Nissan Motor violated the Fair Trade Law by posting false advertisements for Nissan Sentra

Key Word(s):

Nissan Sentra, most powerful in history

Reference:

Fair Trade Commission Decision of November 19, 2014 (the 1202nd Commissioners' Meeting); Disposition Kung Ch'u Tzu No.103126

Industry:

Manufacture of Motor Vehicles (3010)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC was informed by private citizens that Yulon Nissan Motor Co., Ltd. (hereinafter referred to as "Nissan Taiwan") might have engaged in false advertising by claiming on its website (http://www.nissan.com.tw) that "Super Sentra" was the most powerful mid-to-large size sedan in history. Statements such as "the most powerful," the "No. 1," the "best" and so on posted by a business for its own product or service could be divided into the description of objective facts and the expression of subjective perception. If there were no items or data compared, the wording of "the most powerful" in history could only be regarded as the company's expression of subjective perception or expectation. Since no objective facts or data were put forth to support the appeal or comparison, it was unlikely to cause misunderstandings for consumers. However, if such an advertisement included items or data compared to give consumers the impression that the wording of "the most powerful in history" was the appeal, reasonable or complete data for the purpose of comparison had to be disclosed, or a report from an objective and impartial third party would be needed to support the claim. Otherwise, it was likely that such wording would be considered as false, untrue or misleading.
2. The FTC's investigation revealed that next to the claim of "Which one is the most powerful mid-to-large size sedan? Super Sentra is the most powerful large size sedan in history!" on Nissan Taiwan's website, there were descriptions about the appearance, interior space, comfort, fuel consumption and power of the Super Sentra model as well as its related figures. The company contested that when the advertisement was under planning, only four domestically made sedans of the same class ranging between NT$650,000 and NT$750,000 were compared. The comparison did not cover imported or other domestically-made 1.8L sedans. Nevertheless, Nissan Taiwan did not fully disclose the important information about the cars this advertisement compared. It was thus a misleading representation with regard to the quality of product in violation of Article 21(1) of the Fair Trade Law. Therefore, the FTC applied the first section of Article 41(1) of the same law and imposed an administrative fine of NT$200,000 on the company.

Appendix:
Yulon Nissan Motor Co., Ltd.'s Uniform Invoice Number: 80032530