IEZ Mall Co. Ltd.

1228th Commissioners' Meeting (2015)

Case:

IEZ Mall Co. Ltd. violated the Fair Trade Law for its TV commercial of “Bing Li mobile water-cooling AC”

Keyword(s):

TV commercial, false advertising

Reference:

Fair Trade Commission Decision of May 20, 2015 (the 1228th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 104031

Industry:

Retail Sale via Mail Order Houses or via Internet(4871)

Relevant Law(s):

Paragraph 1 of Article 21 of the Fair Trade Law

Summary:

1. The National Communications Commission forwarded the FTC a written complaint from a private citizen stating that a product named “Bing Li Mobile Water-cooling AC” was advertised on TV as able to reduce the temperature by 8 degrees but no such effect could be achieved when the machine was used and therefore false advertising was suspected.

2. It was claimed in the TV commercial that “room temperature dropped 8 degrees in no time.” However, the FTC’s investigation revealed that it had not been explained in the commercial that water and ice cubes had been placed in the machine during the commercial shooting process. Moreover, the temperature reduction had been measured at the air outlet of the machine. The result therefore would be rather different from the overall drop of room temperature as the general public would usually perceive. Meanwhile, after placing water and ice cubes in the machine and actually operating it, the temperature reductions at the air outlet and at one meter away from it were obviously different from the impression commercial viewers would get and the difference would be unacceptable to the general or concerned consumers. It could lead to mistaken perceptions or wrong decision made by the public and, therefore, constitute violation of Article 21 of the Fair Trade Law.

3. The commercial also claimed that “you will find the Bing Li mobile water-cooling AC has nearly the same capacity as a 2-ton air conditioner. It is able to reduce the temperature in the room by 6-8 degrees while consuming only one tenth of the power that the air conditioner requires.” According to professional opinions offered by the Bureau of Energy of the Ministry of Economic Affairs, the air-cooling function and product design of water-cooling ACs were dissimilar from those of air conditioners releasing cold air generated from coolant circulation. The comparison between the cooling capacity and power consumption in the commercial had been made by measuring the temperature, and by comparing the result with that of a real AC according to the amount of power consumed. However, since where temperature was measured, the humiture at the air inlet and outlet, the air volume, the way of measurement, and how the values were extracted were not disclosed, it was impossible to calculate the air-cooling capacity claimed in the said commercial. Therefore, the cooling capacity and power consumption comparison made by IEZ Mall Co., Ltd. between the product in question and an air conditioner whose structure was totally different to exaggerate the cooling effect of the water-cooling AC was a false, untrue and misleading representation with regard to the quality of the product in violation of Article 21 of the Fair Trade Law. For this reason, the FTC imposed an administrative fine of NT$200,000 on the company.