Cite Publishing Ltd.

Case:

Cite Publishing violated the Fair Trade Law by posting false TV audience ratings

Key Word(s):

Audience rating, competitor, comparative advertisement

Reference:

Fair Trade Commission Decision of December 31, 2014 (the 1208th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.103146

Industry:

Publishing of Journals and Periodicals (5812)

Relevant Law(s):

Paragraph 3 of Article 21(1) of the Fair Trade Law and Paragraph 1 of the same article applicable mutatis mutandis

Summary:

1. Between April and May 2014, Cite Publishing Ltd. (hereinafter referred to as Cite Publishing) sent electronic DM (EDM) to members of its Designer program and interior designers. The EDM contained program schedules as well as the wording of “a 2-year-old program competing with a 7-year-old program; three channels as good as four channels--Designer winning the highest audience rating every week" and "a 2-year-old program competing with a 7-year-old program; three channels as good as four channels--Designer winning the highest audience rating in three consecutive weeks." There was also a comparison table displaying the audience ratings of Designer and similar programs operated by Cite Publishing's competitors. Use of false audience rating figures was suspected and it could constitute false advertising.
2. Findings of the FTC after investigation:
   The comparison table in the program schedule EDM from Cite Publishing showed the audience ratings of Designer and similar programs operated by its competitors. It was indicated in the EDM that the figures were based on the result of an audience rating survey conducted on "viewers between 30 and 49 years of age." There was also the claim that the "aggregate of the audience ratings of Designer on three channels was higher than that of Happiness on four channels," "surpassing Happy Space in average audience rating," "Designer winning the highest audience rating every week," and "Designer winning the highest audience rating in three consecutive weeks." The above statements gave consumers the erroneous impression that the aggregate of audience ratings and average audience rating of Designer were No. 1 each week and No. 1 for three weeks consecutively. The investigation, however, revealed that the "viewers between 30 and 49 years of age" indicated in the comparison table was in fact "viewers between 35 and 49 years of age," or "viewers between 35 to 54 years of age," and Cite Publishing also admitted that the age group indicated had been a typographical error. Consequently, the audience ratings established in accordance with the result of survey on "viewers between 30 and 49 years of age" could not support the aforesaid claim in the advertisement.
3. Grounds for disposition:
   In addition to providing referential data for program producers and broadcasters to improve their service for viewers, results of TV audience rating surveys could facilitate program suppliers to make more effective commercial allocation and investment. Announcement of TV audience ratings could help publicize TV programs. Therefore, when using audience ratings to market and promote programs, businesses had the obligation to disclose important information properly and could not make false, untrue or misleading representations. Otherwise, they might cause trading counterparts to have wrong perceptions and make incorrect transaction decisions. This could harm the interests of trading counterparts and competitors. In other words, Cite Publishing had failed to fulfill its obligation of disclosing facts as an advertiser when sending out the program schedule EDM. The conduct of Cite Publishing at issue was likely to lead to wrong perceptions for the general public and in turn make its competitors to lose their customers. It was in violation of Article 21(3) of the Fair Trade Law and Paragraph 1 of the same article was applicable mutatis mutandis. Hence, 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:
Cite Publishing Ltd.'s Uniform Invoice Number: 97125343