VeeTime Corp.

1227th Commissioners' Meeting (2015)

Case:

VeeTime Corp. violated the Fair Trade Law for its promotional plan of “subscribing to fiber optic Internet connection and getting free cable TV service”

Keyword(s):

Cable TV, fiber optic Internet connection, upper limits of gift and prize value

Reference:

Fair Trade Commission Decision of May 13, 2015 (1227th Commissioners’ Meeting), Disposition Kung Ch’u Tzu No. 104036

Industry:

Cable and Other Subscription Programming (6022)

Relevant Law(s):

Article 23 of the Fair Trade Law

Summary:

1. The FTC received complaints that VeeTime Corp.’s offer of promotional plan of “subscribing to fiber optic Internet connection and getting free Cable TV service” could be unlawful. According to the flyers distributed by the company and the information posted on the company’s website, one month of free cable TV service would be given to customers who subscribe to the “15M/4M” or “30M/8M” fiber optic broadband Internet connection service for one month, two months of free cable TV service to those who subscribe to the “15M/4M” or “30M/8M” fiber optic broadband Internet connection service for two months, and so on. The value of the gifts (free cable TV service) exceeded the value of each type of fiber optic broadband Internet connection service by several fold. Violation of Article 23 of the Fair Trade Law was thus suspected.

2. Findings of the FTC after investigation:

   The value of the gift would be about 54% to 71% of the value of the service for customers subscribing to the “15M/4M” speed connection service for three months to one year, and it would be 53% to 63% of the value of the service for customers subscribing to the “30M/8M” speed connection service for four months to one year. In both situations, the gift value already exceeded one half of the service value. For customers subscribing to the “15M/4M” or “30M/8M” speed connection service for two years, the worth of the gifts would be around 75% or 66% of the value of service. The gift value in each case described above also surpassed one half of the service value that is the upper limit set forth in Article 4 of the Regulations Governing the Amount of Gifts and Prized Offered by Businesses.

3. Grounds for disposition:

   The value of the gifts offered by VeeTime Corp. along with its promotional plan of “subscribing to fiber optic Internet connection and getting free cable TV service” exceeded one half of the service value. It was an inappropriate practice of giving gifts to obtain trading opportunities in violation of Article 23 of the Fair Trade Law. After assessing the duration of the illegal practice, the sales of the company, the number of customers subscribing to the aforementioned services, the violation being the first ever, the fact that the company already showed its remorse, provided information and being cooperative during the investigation, and the competition conditions resulted from the company’s cross-region cable TV service operation, the FTC applied Article 42 of the Fair Trade Law, imposed on it an administrative fine of NT$50,000, and also ordered it to cease the unlawful act at issue immediately after receiving the disposition.