1. The FTC received a complaint accusing Xian Ke Le Steak House of holding raffles to market "Energy Water Resources" water purifiers and deceiving consumers in violation of the Fair Trade Law. After an investigation, the FTC discovered Xian Ke Le Steak House had relocated without leaving any contact information and was nowhere to be found while the complainant was also unable to provide any further evidence. Hence, the FTC initiated an investigation to see whether Shang He Water Purifier Co., Ltd. (hereinafter referred to as Shang He Water Purifiers), supplier of the "Energy Water Resource" water purifiers, had engaged in any deceptive conduct.
2. Findings of the FTC after investigation:
   After Shang He Water Purifiers came to the FTC to explain the raffle activities held, sources of prizes and distribution of prizes, the FTC visited and interviewed the businesses cooperating with Shang He Water Purifiers in the raffle activities, the prize winners and the water purifier maker. The results indicated Shang He Water Purifiers started using raffles to market products associated with the "Energy Water Resources" water purifiers in 2016 and contacted certain stores to find out their interest in cooperation in the activities. However, the wording in the flyers and on the raffle tickets could easily mislead consumers to believe the activities were organized by the stores. Shang He Water Purifiers also established an agreement with the stores on the threshold for giving out 3C household appliances as prizes but never disclosed related information to the public. The company did not deny the prizes actually given out were inconsistent with the raffle description. In addition, the investigation revealed the company's water purifier purchasing price and the water purifier maker's suggested price were considerable lower than what Shang He Water Purifiers told the prize winners. Most prize winners admitted they would not have purchased a water purifier and filters if they had not received the prize-winning notice.
3. Grounds for disposition:
   1. When an enterprise holds a raffle but announces the winners and prizes without actually conducting the raffle to attract people feeling happy about their luck to do business with it, or the enterprise does not make it clear the purpose of the raffle is to market products or services and consumers participating in the activities are psychologically unprepared, then the enterprise applies systematic marketing approaches to push its products or services on consumers, it will put such consumers in a disadvantageous position in the information asymmetry, compared to the seller.
   2. The organizer of the raffle activities held by Shang He Water Purifiers was never indicated. That misled consumers to believe the activities were associated with retail stores they had shopped at. The company used the raffle activities as a pretext and then notified winners to attract people who had no intention of making purchases to participate. Then, the company took advantage of people's mentality of feeling happy about being lucky and got the personal information of the prize winners. Moreover, the company concealed important trading information associated with the raffle activities and the actual raffle activities were obviously different from the description on the raffle tickets. Shang He Water Purifiers also lied about the price of the water purifier. In consequence, consumers, being in the relatively disadvantageous position in the information asymmetry, made the wrong decision to purchase products related to the water purifier. The overall marketing practice was deceptive and obviously unfair conduct able to affect trading order in violation of Article 25 of the Fair Trade Law. Therefore, the FTC ordered the company to immediately cease the unlawful act and also imposed on it administrative fine of NT$100,000 in accordance with the first section of Article 42 of the Fair Trade Law.

Appendix:

JShang He Water Purifier Co., Ltd.'s Uniform Invoice Number: 53458245

Summarized by: Fu, Hong-Wei ; Supervised by: Wu, Lieh-Ling