Fair Trade Law Q&A - False or Misleading Advertising

1. Comparative advertising refers to advertising in which an enterprise compares a certain aspect of the merchandise or services it provides with that of another enterprise so as to enhance its trading opportunities.
2. In comparative advertising, an enterprise should ensure that the contents of its advertising conform to the representations or symbols regarding its own and other enterprises' merchandise, and should approach comparative advertising on the basis of fair, objective, and similar comparative benchmarks.
3. Regardless of whether the compared enterprise is expressly identified, an enterprise shall not engage in any of the following conduct when comparing its merchandise or services with those of another enterprise; otherwise, it may violate Article 21 of the Fair Trade Act:
   1. Making false or misleading representations or symbols regarding its own or another enterprise's merchandise or services;
   2. Comparing merchandise or services of different vintage or level;
   3. Applying different benchmarks or conditions to the comparison of the similar merchandise or services;
   4. Citing information sources that are not objective, lack a recognized comparative basis, or using inappropriate simplifications or interpretations of cited information;
   5. Using skeptical, speculative, or subjective descriptions to compare items without proof or empirical evidence;
   6. Using a partial advantage to claim total superiority, or unilaterally highlighting its own advantages while intentionally ignoring the advantages of another enterprise, thereby creating an overall impression based on an unfair comparison;
   7. Making claims regarding the effectiveness of merchandise or services being compared without any scientific theory or experimental basis; or
   8. Making false or misleading representations regarding important trading facts in the comparison.
4. In comparative advertising, an enterprise shall not, for the purpose of competition, make or disseminate untruthful statements that result in damage to the business reputation of another enterprise that is expressly identified or identifiable. Otherwise, it may violate Article 24 of the Fair Trade Act.
5. Where a case accepted by the Commission is suspected of violating Article 24 of the Fair Trade Act and involving criminal liability, the case shall be referred to the prosecutorial offices for investigation.