Ontech Corp., ERA Communications, GOMAJI, Contact Digital Integration and Groupon Taiwan

1255th Commissioners’ Meeting (2015)

Case:

Ontech Corp., ERA Communications, GOMAJI, Contact Digital Integration and Groupon Taiwan violated the Fair Trade Law by posting false advertisements

Keyword(s):

Information disclosure, false advertising

Reference:

Fair Trade Commission Decision of November 25, 2015 (the 1255th Commissioners’ Meeting), Disposition Kung Ch’u Tzu No. 104114

Industry:

Activities of Amusement Parks or Theme Parks (9321), Retail Sale via Mail Order House or via Internet (4871)

Relevant Law(s):

Article 21(4) of the Fair Trade Law

Summary:

1. A consumer filed with the FTC a complaint that online shopping platform were selling a presale ticket to the “Japanese Gourmet Food Fair” at NT$240 and offering a voucher worthy of NT$500 for each ticket bought. However, when consumer showed up at the fair, she was told that the use of the voucher could only get a NT$20 discount on each food product purchased. The consumer thought the online shopping platform operators had violated the Fair Trade Law by failing to explain the condition on the use of the voucher.

2. Findings of the FTC after investigation:

   Ontech Corp. organized the “Japanese Gourmet Food Fair” and commissioned operators of online shopping platforms ERA Communications Co., Ltd., GOMAJI Corp., Ltd., Contact Digital Integration Co., Ltd. and Groupon Taiwan Co., Ltd. to sell tickets to the said food fair. Ontech Corp. also provided related texts and pictures for the said companies to use in the advertisements.

3. Grounds for disposition:

   (1)	The claim of giving a NT$500 voucher for each ticket of NT$240 purchased in advance was obviously intended to attract customers. Therefore, the value of the voucher was certainly an important consideration for consumers to decide whether they would buy a ticket. However, when using the voucher to buy food products at the fair, a consumer could only get a NT$20 discount for each item she bought. Assuming each food product was NT$100, then a consumer would have to purchase 25 items by spend NT$2,000 in order to enjoy the total worth of the NT$500 voucher. This was very different from the understanding that a consumer only had to pay NT$240 for a ticket to get a voucher worthy of NT$500.
   (2)	The advertisements for the food fair did not disclose any condition on how the voucher could be used. A consumer needed to buy a ticket first and would not find out about the condition and limit on the special offer that had led to his or her transaction decision until he or she attended the food fair. The actual value of the voucher and the condition on how the voucher could be used were both important factors when consumer decided whether they wanted to buy a ticket or not. Yet such important trading information was not disclosed in the advertisements and consumers were affected in their decision making. In other words, the claim about the N$500 voucher in the advertisements was a false, untrue and misleading representation.
   (3)	After assessing the income of each company derived from the unlawful act, the motive behind the conduct, each company’s management condition and market power, remorse shown for the act and attitude of cooperation throughout the investigation, the FTC imposed an administrative fine of NT$100,000 on Ontech Corp., NT$80,000 on Era Communications Co., Ltd., and NT$50,000 on each of GOMAJI Corp., Ltd., Contact Digital Integration Co., Ltd. and Groupon Taiwan Co., Ltd.