Taiwan Star

Taiwan Star

1284th Commissioners' Meeting (2016)

Case:

Star Telecom violated the Fair Trade Law by using the names of other enterprises in its keyword advertising activity

Keyword(s):

Telecommunications services, keyword advertising

Reference:

Fair Trade Commission Decision of June 15, 2016 (the 1284th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 105064

Industry:

Wireless Telecommunications Activities (6102)

Relevant Law(s):

Article 25 of the Fair Trade Law

Summary:

Sometime in August 2015, Taiwan Mobile Co., Ltd. (hereinafter referred to the informer) entered "Taiwan Mobile" as the keyword to search on Google. At the top of the links that popped up was the caption of "Exclusive: 50% discount on 'Taiwan Mobile' monthly fees for subscribers registering within a given period of time" and the corresponding website was indicated as "tstarel.com" below the caption. Google Taiwan (the operator of the Google website in Taiwan; hereinafter referred to as Google) received a complaint from the informer and immediately removed the advertisement. The said practice of Taiwan Star Telecom Co., Ltd. (hereinafter referred to as Taiwan Star Telecom) was intended to direct consumers to the company's website and subscribe to its services. In this way, the informer would suffer loss of its potential customers. The advertisement could also mislead consumers to believe the special offer mentioned earlier was made by the informer (in fact it wasn't) and therefore confuse consumers. In consequence, the informer would lose the opportunity to engage in fair competition on the market and online trading order would be affected. In other words, it was deceptive and obviously unfair conduct able to impact trading order in violation of Article 25 of the Fair Trade Law.

Findings of the FTC after investigation:

(1) Bizin Digital Marketing Co., Ltd. (hereinafter referred to as Bizin Digital), the company commissioned by Taiwan Star Telecom to post the keyword advertisement, stated that the keyword advertising had been produced according to its copy proposal. The proposal included display of the wording about the special offer by using Google's "keyword insertion function." The advertising and marketing personnel of Taiwan Star had reviewed and approved the said copy before Bizin Digital purchased the right to post a few pieces of keyword advertising, including the keyword advertising that became controversial in this case. Normally Bizin suggested all the advertisers it serves to use Google's keyword insertion function in accordance with the properties of the advertising texts. Therefore, it had also recommended Taiwan Star Telecom to do the same and Taiwan Star Telecom agree to do so. In other words, Taiwan Star Telecom was aware of and understood how the said keyword insertion function worked.

(2) Bizin Digital stated that the number of words in the ad group posted by using the keyword insertion function was large and most of the words came from the keywords list that had been confirmed by Taiwan Star Telecom. However, Google told Bizin Digital later that the keyword advertising had been suspended because the copy posted by using keyword insertion function included the trademarks of the competing products (names of competitors) and it could easily cause confusion to consumers. As a result, Bizin Digital removed the said piece of keyword advertising.

(3) However, Taiwan Star Telecom stated it had never instructed Bizin Digital to use the keyword insertion function and asserted that the problem had been a result of serious negligence of Bizin Digital because the company had used the keyword insertion function by mistake when drawing up the advertising proposal. Taiwan Star Telecom contested that it had not expected such serious negligence and thus it had not prepared to exercise any control. Taiwan Star Telecom insisted that it had merely received the keyword advertising copy proposal and its knowledge of the undertaking had been limited to the content of the proposal, therefore the conduct of Bizin had been in violation of the delegation agreement and what Bizin has done had nothing to do with Taiwan Star Telecom. In other words, Taiwan Star Telecom asserted that Bizin alone had to take the legal responsibility.

Grounds for disposition:

(1) According to the advertising needs of Taiwan Star Telecom, Bizin Digital drew up a keyword advertising copy proposal. After Taiwan Star Telecom reviewed the proposal and gave its approval, Bizin Digital purchased the right to post the keyword advertising. In other words, Taiwan Star Telecom had the authority to review and revise the keyword advertising copy produced by Bizin Digital. In this way, Taiwan Star Telecom has the ultimate control over the decision as to whether the advertising should be posted.

(2) After comparison, the FTC confirmed that the keyword advertising copy from the keyword advertising copy proposal had been meant to be posted by using Google's keyword insertion function. As for the ad group in which the default texts could be replaced, according to the keyword accounts framework that Bizin Digital and Taiwan Star Telecom had been using during their cooperation, the ad group consisted of keywords that were abbreviations of the names of other telecom businesses, including Far Eastone, Far Eastone Telecom, Asia Pacific, Asia Pacific Telecom, Taiwan Mobile, Chunghwa, and Chunghwa Telecom. Therefore, it was easy to replace the keyword advertising in this case and insert the abbreviation of the name of another telecom business through Google's keyword insertion function after an Internet user entered the abbreviation of the name of a telecom business in the ad group. Then, the keyword advertising for Taiwan Star Telecom would appear and the user would be directed to its website. In so doing, the number of visits to the website of Taiwan Star Telecom would increase and the likelihood of successful transactions would also be higher. On the other hand, the informer who had not released any package deals would be misunderstood by consumers because of the advertising text and lose its potential trading counterparts. Therefore, the practice had to be considered conduct intended to exploit the efforts of others. It was obviously unfair conduct able to affect trading order in violation of Article 25 of the Fair Trade Law.

(3) After assessing the sales of Taiwan Star, the duration the keyword advertising was posted, the fact that it was the first violation of the company and its cooperation throughout the investigation, the FTC cited the first section of Article 42 of the Fair Trade Act and imposed an administrative fine of NT$600,000 on the company.

Appendix:

Taiwan Star Telecom Co., Ltd.'s Uniform Invoice Number: 70769567

Summarized by: Lin, Hsueh–Liang; Supervised by: Kuo, An-Chi

(1)	Bizin Digital Marketing Co., Ltd. (hereinafter referred to as Bizin Digital), the company commissioned by Taiwan Star Telecom to post the keyword advertisement, stated that the keyword advertising had been produced according to its copy proposal. The proposal included display of the wording about the special offer by using Google's "keyword insertion function." The advertising and marketing personnel of Taiwan Star had reviewed and approved the said copy before Bizin Digital purchased the right to post a few pieces of keyword advertising, including the keyword advertising that became controversial in this case. Normally Bizin suggested all the advertisers it serves to use Google's keyword insertion function in accordance with the properties of the advertising texts. Therefore, it had also recommended Taiwan Star Telecom to do the same and Taiwan Star Telecom agree to do so. In other words, Taiwan Star Telecom was aware of and understood how the said keyword insertion function worked.
(2)	Bizin Digital stated that the number of words in the ad group posted by using the keyword insertion function was large and most of the words came from the keywords list that had been confirmed by Taiwan Star Telecom. However, Google told Bizin Digital later that the keyword advertising had been suspended because the copy posted by using keyword insertion function included the trademarks of the competing products (names of competitors) and it could easily cause confusion to consumers. As a result, Bizin Digital removed the said piece of keyword advertising.
(3)	However, Taiwan Star Telecom stated it had never instructed Bizin Digital to use the keyword insertion function and asserted that the problem had been a result of serious negligence of Bizin Digital because the company had used the keyword insertion function by mistake when drawing up the advertising proposal. Taiwan Star Telecom contested that it had not expected such serious negligence and thus it had not prepared to exercise any control. Taiwan Star Telecom insisted that it had merely received the keyword advertising copy proposal and its knowledge of the undertaking had been limited to the content of the proposal, therefore the conduct of Bizin had been in violation of the delegation agreement and what Bizin has done had nothing to do with Taiwan Star Telecom. In other words, Taiwan Star Telecom asserted that Bizin alone had to take the legal responsibility.

(1)	According to the advertising needs of Taiwan Star Telecom, Bizin Digital drew up a keyword advertising copy proposal. After Taiwan Star Telecom reviewed the proposal and gave its approval, Bizin Digital purchased the right to post the keyword advertising. In other words, Taiwan Star Telecom had the authority to review and revise the keyword advertising copy produced by Bizin Digital. In this way, Taiwan Star Telecom has the ultimate control over the decision as to whether the advertising should be posted.
(2)	After comparison, the FTC confirmed that the keyword advertising copy from the keyword advertising copy proposal had been meant to be posted by using Google's keyword insertion function. As for the ad group in which the default texts could be replaced, according to the keyword accounts framework that Bizin Digital and Taiwan Star Telecom had been using during their cooperation, the ad group consisted of keywords that were abbreviations of the names of other telecom businesses, including Far Eastone, Far Eastone Telecom, Asia Pacific, Asia Pacific Telecom, Taiwan Mobile, Chunghwa, and Chunghwa Telecom. Therefore, it was easy to replace the keyword advertising in this case and insert the abbreviation of the name of another telecom business through Google's keyword insertion function after an Internet user entered the abbreviation of the name of a telecom business in the ad group. Then, the keyword advertising for Taiwan Star Telecom would appear and the user would be directed to its website. In so doing, the number of visits to the website of Taiwan Star Telecom would increase and the likelihood of successful transactions would also be higher. On the other hand, the informer who had not released any package deals would be misunderstood by consumers because of the advertising text and lose its potential trading counterparts. Therefore, the practice had to be considered conduct intended to exploit the efforts of others. It was obviously unfair conduct able to affect trading order in violation of Article 25 of the Fair Trade Law.
(3)	After assessing the sales of Taiwan Star, the duration the keyword advertising was posted, the fact that it was the first violation of the company and its cooperation throughout the investigation, the FTC cited the first section of Article 42 of the Fair Trade Act and imposed an administrative fine of NT$600,000 on the company.