Kang Hsuan Educational Publishing Co., Ltd.

1360th Commissioners' Meeting (2017)

Case:

Kang Hsuan publishing violated the Fair Trade Law by organizing raffle activities for junior high school teachers in Hsinchu County and City

Keyword(s):

Textbook, inappropriate object

Reference:

Fair Trade Commission Decision of November 29, 2017 (the 1360th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 106110

Industry:

Book Publishing (5813)

Relevant Law(s):

Articles 25 of the Fair Trade Law

Summary:

1. A private citizen reported to the FTC that Kang Hsuan Educational Publishing Co., Ltd. (hereinafter referred to as Kang Hsuan Publishing) was in violation of Article 25 of the Fair Trade Law by offering bonuses and prizes to junior high school teachers in Hsinchu County and Hsinchu City during a Christmas celebration event. Therefore, the FTC initiated an ex officio investigation.
2. Findings of the FTC after investigation:
   A. The private citizen provided the "Kang Hsuan Happy Christmas Presents" event signup sheet and also a video tape filmed throughout the winning number drawing process. The prizes included NT$5,000 vouchers for Sogo Department Store, City Steak meal coupons, Vieshow Cinemas tickets, Aveda skincare kits and Seba foot care experience kits. Participants not winning any of the aforementioned prizes would receive a consolation prize.
   B. The FTC sent a written request to Kang Hsuan Publishing asking it to explain the motive for organizing the event, the content of the event, and the prizes given out. Visits were also paid to schools with more prize winners. As of May 2017, most prize winners had received their prizes most of which were Aveda skincare kits and Seba foot care experience kits.
3. Grounds for disposition:
   A. Kang Hsuan Publishing contested the event had been held to collect the email addresses and phone numbers of teachers of different schools in order to send them messages about social events and educational information. However, since sending messages about social events and educational information was an additional service outside product marketing, Kang Hsuan Publishing should have organized the same or similar activities for all schools using the company? textbooks. Yet, the fact was that the event was only open to junior high school teachers in Hsinchu County and Hsinchu City, obviously contradictory to normal practices. Meanwhile, if Kang Hsuan Publishing had really intended to send materials for teaching aids to teachers, even if the schools had not provided their teachers??contact information, the salesmen of the company could have delivered the objects to each school or had them forwarded by the related units of the schools. In other words, there was no need to offer valuable objects to obtain the contact information of teachers.
   B. None of the prizes indicated on the flyer for the event was related to teaching and the people to receive them were either teachers or administrative personnel of different schools. In addition, all the prizes had their objective monetary value and therefore could be given to others as gifts. Even thought some of the prizes were not expensive, they were not related to teaching and were given outside the textbook selection period, it could be intended to accumulate favors. The same interpretation could be found in the 2009 Su-Zi Verdict No. 503 from the Taipei High Administrative Court.
   C. The time point when Kang Hsuan held the event was not during the textbook selection period. Nonetheless, the FTC? policy statements on sales of textbooks did not indicate provision of gifts during the textbook selection period as the only standard for judging whether such practices were illegal. The policy statements list money, objects and other economic benefits as gifts given to increase the opportunity of having a publisher? textbooks selected, but without doubt the legal effect had to be determined according to Article 25 of the Fair Trade Law. As described above, the Christmas raffle organized by Kang Hsuan Publishing to offer money and objects to junior high school teachers in Hsinchu County and Hsinchu City was inappropriate. The practice was obviously unfair conduct able to affect trading order in violation of Article 25 of the Fair Trade Law. Therefore, the FTC imposed an administrative fine of NT$500,000 on the company.