Fair Trade Law Q&A - False or Misleading Advertising

1. Joint and several civil liability for damages
   As specified in Paragraph 6 of Article 21 of the Fair Trade Act, an "endorser" refers to any person or organization, other than the principal of the advertisement, who expresses opinions, trust, findings, or results of personal experiences with regard to the goods or services. Paragraph 5 of the same Article further provides that where an endorser provides any testimonials that he or she knows or should have known to be likely to mislead the public, the injured party may seek civil damages jointly and severally from both the principal of the advertisement and the endorser. However, where the endorser is not a celebrity, specialist, or organization, the scope of liability shall be limited to an amount not exceeding ten times the remuneration received from the advertiser.
2. Administrative liability
   Persons who act jointly and intentionally in the commission of an act in breach of duty under administrative law According to Article 21 of the Fair Trade Act and the Fair Trade Commission Disposal Directions (Policy Statements) on the Use of Endorsements and Testimonials in Advertising, even if an endorser is not an "enterprise" as defined in Subparagraph 3 Paragraph 1 of Article 2 of the Fair Trade Act, where the endorser intentionally participates with the advertiser in engaging in false advertising, thereby satisfying the requirements for "acting jointly and intentionally in the commission of an act in breach of duty under administrative law" set forth in Article 14 of the Administrative Penalty Act, both the endorser and the advertiser may be subject to administrative penalties under the relevant laws governing false advertising.
3. The inseparable nature of the liabilities of the advertiser and the endorser
   1. According to the principle of special law prevailing over general Law, where special laws apply, such laws shall prevail over the Fair Trade Act. False advertisements concerning goods or services governed by special laws shall be investigated and handled by the competent authority responsible for the relevant industry. The Fair Trade Commission regulates advertisements for goods and services that are not governed by special laws.
   2. The testimonials provided by an endorser in an advertisement forms an inseparable part of the overall advertising content, the advertiser and the endorser of the same endorsement advertisement shall each bear the corresponding legal liabilities under the same laws implicated by the advertising content.
   3. For example, false advertisements that violate health-related laws and regulations, including those concerning food, pharmaceuticals, cosmetics, and health foods, are handled by the Ministry of Health and Welfare (formerly the Department of Health, Executive Yuan) in accordance with coordination conclusions reached between the Fair Trade Commission and the Ministry. Because the endorsement forms an inseparable part of the overall advertising content, both the advertiser and the endorser shall be subject to the relevant health laws and regulations, and their administrative liabilities shall be determined by the competent health authority.