Chunghwa Telecom

1218th Commissioners' Meeting (2015)

Case:

Chunghwa Telecom violated the Fair Trade Law for posting false comparative ads regarding charges for “100M Internet Access Speed + TV Channels”

Keyword(s):

False and untrue, misleading

Reference:

Fair Trade Commission Decision of March 11, 2015 (the 1218th Commissioners’ Meeting), Disposition Kung Ch’u Tzu No. 104021

Industry:

Telecommunications (6100)

Relevant Law(s):

Paragraph 4 of Article 21 and Paragraph 1 of the same article applicable mutatis mutandis and Article 25 of the Fair Trade Law

Summary:

1. The FTC received complaints that Chunghwa Telecommunications Co., Ltd. (hereinafter referred to as Chunghwa Telecom) posted in the Pingtung region an ad in which charges for “100M Internet access speed + TV channels” were compared. The comparison was made between the NT$1,184 plan of Chunghwa Telecom and the NT$1,448 plan of “another business.” However, the “high definition channels,” “upload speed” and “daily life information” comparisons were false and untrue.

2. Chunghwa Telecom claimed in the ad at issue that its NT$1,184 plan offered 83 high definition channels but in reality the number of such channels was 77. As the number of high definition channels was listed as a compared item, Chunghwa Telecom apparently considered it a key advantage in its service. Whether TV programs are run on high definition channels have a direct effect on their picture qualities. It would be an important factor when consumers make their decision as to whether they would subscribe to such service. For this reason, the untruthful statement in the said ad was a false, untrue and misleading representation in violation of Paragraph 4 of Article 21 of the Fair Trade Law and Paragraph 1 of the same article was applicable mutatis mutandis.

3. The comparison in the advertisement posted by Chunghwa Telecom was “10M” of upload speed, yet the fact was the broadband access speed of the “NT$1,448 plan” that “another business” business offered was 100M/20M, meaning download speed 100M and upload speed 20M. In addition, Chunghwa Telecom claimed in the ad that the NT$1,448 plan” offered by “another business” did not include provision of daily life information. However, the “Daily Life Information Service” of the digital network TV services included in the “NT$1,448 plan” did provide “EZ movie ticker booking,” “weather forecasts,” “High Speed Rail Schedules,” “Taiwan Railways Schedules” and “Lunar Calendar.” Consequently, Chunghwa Telecom obviously had made false statements about the upload speed and daily life information service included in the “NT$1,448 plan” offered by “another business.” It was obviously unfair conduct in violation of Article 25 of the Fair Trade Law.

4. After assessing the motive behind the unlawful conduct of Chunghwa Telecom, the damage thus created, the seriousness of the violation, the business scale of the company, and the company’s attitude after the violation, the FTC applied the first section of Article 42 of the Fair Trade Law and imposed an administrative fine of NT$300,000 on Chunghwa Telecom for its violation of Paragraph 4 of Article 21 of the Fair Trade Law and Paragraph 1 of the same article was applicable mutatis mutandis, as well as another administrative fine of NT$500,000 for its violation of Article 25 of the same law. The fines totaled NT$800,000.