Oderbau Furniture Co., Ltd.

1369th Commissioners' Meeting (2018)

Case:

Oderbau Furniture violated the Fair Trade Law for posting false advertising on its MDI foam furniture

Keyword(s):

False advertising, furniture

Reference:

Fair Trade Commission Decision on January 31, 2018 (the 1369th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 107009

Industry:

Retail Sale of Household Furniture in Specialized Stores (4742)

Relevant Law(s):

Article 21 of the Fair Trade Law

Summary:

1. Oderbau Furniture Co., Ltd. (hereinafter referred to as Oderbau Furniture) claimed on its company website and Facebook fans page that all furniture and TDI foam products would release toxic substances. At the same time, it also posted on Youtube, its company website and Facebook fans page a comparative advertisement titled "Oderbau Furniture?ontoxic." The practice was in violation of the Fair Trade Law.
2. Findings of the FTC after investigation:
   (1)The advertising in question carried the wording that "all furniture is chemical products and the volatile organic compounds (VOCs) released can harm the health of your entire family" and "as indicated in the reports on results of MDI foam tests performed in Europe, the VOCs in foams have to be lower than 500弮g/m3 according to CertiPUR standards. However, the foams used by Oderbau Furniture only contain 13弮g/m3, far lower than the standard in Europe!" The cover of a CertiPUR certificate issued on August 28, 2016 was also displayed in the advertisements. Nontheless, the FTC's investigation revealed that the standard of permissible VOCs indicated in the certificate was 72弮g/m3 and this was inconsistent with what was claimed in the advertisements. At the same time, according to the Bureau of Standard, Metrology and Inspection (hereinafter referred to as the BSMI) of the Ministry of Economic Affairs, VOCs include a large variety of substances and not all of them were toxic. As Oderbau Furniture was unable to provide lab data to support its above statement that the VOC contents of the furniture products of other companies had reached the level harmful to human health, its claims in the advertisements, therefore, had no basis. (2) It was also posted in the advertisements that "the foams of memory pillows or memory mattresses available on the market are formed by using TDI. It is dangerous because the VOCs released from TDI are toxic and harmful to the human body" and "the weight of the body will suppress the TDI foams and squeeze out toxic VOCs which will then be inhaled by and enter the human body." According to the BSMI, not all VOCs were toxic substances. In addition, the MDI foam products from Oderbau Furniture also contained VOCs although the contents complied with the CertiPUR standard. In the meantime, according to the Environmental Protection Administration of the Executive Yuan, the Toxic Chemical Substances Control Act was regulations for the administration of raw materials. The TDI foam "products" in this case were not subject to such regulations. Therefore, Oderbau Furniture had no objective data to support the claims it made about the TDI foam products. (3) The "Oderbau Furniture?ontoxic" film posted as part of the advertising suggested when children jump up and down on "conventional TDI foams" polybrominated diphenyl ethers, halogenated olefins, carbon tetrachloride, toluene and benzene would be released, but ?DI health-protection foams' would not release such substances in similar situations." However, Oderbau Furniture could not present any objective data to support the claim that TDI foams would release chemical substances as indicated in the advertisements. The company posted the claim that its MDI foams would not produce the aforesaid substances just because they had passed the CertiPUR certification. According to the BSMI, however, the CertiPUR certification report only carried the results of formaldehyde and toluene tests. Polybrominated diphenyl ethers, halogenated olefins, carbon tetrachloride, toluene and benzene tests were not included in the test at all. Hence, it was impossible to conclude the MDI foams from Oderbau would not release these substances.
3. Grounds for disposition:
   (1) Oderbau Furniture claimed on its company website and Facebook fans page that all furniture and TDI foam products would release toxic substances and it also posted a comparative commercial titled "Oderbau Furniture?ontoxic" on YouTube, its company website and Facebook fans page. The practice was a false and misleading representation with regard to the products of the company and other businesses. It was in violation of Paragraph 1 of Article 21 of the Fair Trade Law.
   (2) After assessing the motive and purpose behind the unlawful conduct of Oderbau Furniture and the illegitimate profit expected, the FTC cited the first section of Article 42 of the Fair Trade Law, imposed an administrative fine of NT$800,000 on the company and also ordered it to immediately cease the unlawful act.