Article 21 of this Law provides that "no enterprise shall make or use false or misleading representations or symbol as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, or place of processing on goods or in advertisements, or in any other way making known to the public."

The term "false" means any representation or symbol that is inconsistent with facts, and where the deviation would be unacceptable to a significant number of the general or relevant public, and would lead to misunderstanding or incorrect decisions.
The term "misleading" means any representation or symbol that would cause a significant number of the general or relevant public to misunderstand or make incorrect decisions, regardless of whether such representation or symbol is consistent with facts.

Relevant article of law: Fair Trade Law, Article 21

The principles for determining whether a representation or symbol is false or misleading are as follows:

1. Judgment as to whether a representation or symbol is false or misleading is based on the understanding of trading counterparts. For ordinary goods and ordinary services, the standard is the understanding of the general public paying an ordinary degree of attention; for specialized or professional goods, the standard is the understanding of the relevant public paying an ordinary degree of attention.
2. Although a representation or symbol may be found true when observed in isolation, if the overall impression and effect it creates when observed in combination is sufficient to cause a significant number of the general or relevant public to misunderstand or to make incorrect decisions, such representation or symbol will be considered false or misleading.
3. Where the content of a representation or symbol is manifested by contrasts or especially distinctive methods, and where the major part that is especially distinctive could easily be the major factor by which the consumer decides whether to engage in a transaction, the especially distinctive major part may be observed independently in determining whether the contents are false or misleading.
4. Representations or symbols that objectively have multiple reasonable interpretations or meaings shall not be considered false as long as one of the meanings is true; provided, this shall not apply where there is obviously intent to mislead.

Do comparative advertisements employed by enterprises violate the Fair Trade Law in any way?

Enterprises may be suspect of employing false or misleading representations or symbols if they use comparative methods to create a mistaken belief that their goods or services are superior to those of other enterprises where any of the following circumstances exist:

1. Arbitrarily citing the views of a portion of trading counterparts who are not representative of the entire group to make comparisons favorable to the enterprise.
2. Comparing new products with old ones or comparing products of different grades.
3. Basing the comparison on inconsistent standards or conditions where such standards or conditions are unknown to the trading counterparts (i.e. consumers).
4. Comparison by test results obtained other than by generally accepted scientific or impartial methods.
5. Emphasizing an isolated part of test results or insignificant differences where such part is likely to mislead trading counterparts.
6. Claiming overall superiority on the basis of partial superiority.
7. Using information from non-objective sources in comparisons.
8. Casting unsubstantiated portions of comparisons in the manner of suspicions, conjecture, or subjective statements.
9. Employment of other methods sufficient to mislead the general or relevant public.

Relevant article of law: Fair Trade Law, Article 53

1. Although the business operators listed in the telephone directory are not able to fully and specifically indicate the items that they wish to promote, the listing can still enable customers to inquire by phone, thus leading to possible transactions. An enterprise may also arrange for the name of its business, so that the name in the subscribers listing will be able to attract consumers. Therefore, the subscribers' listing in the business telephone directory is also subject to regulation by Article 21 of this Law.
2. Although the Commission has penalized several home appliance service companies whose advertisements in the telephone directory violate Article 21(3), the said service companies misled the public to believe that they are related to popular home appliance manufacturers. They are not sanctioned simply because they had used the company name _ _ _ xxx.to make themselves being listed at the foremost part of the relevant section in the directory. In other words, where a service companies uses the name _ _ _ xxx to make themselves being listed at the foremost part of the relevant section in the directory without leading to confusion with other parties, such act is not in violation of the above provision.
3. Although the Directorate General of Telecommunications (DGT) publishes the subscribers listing in accordance with its Guidelines for City Telephones and based on subscriber information, and although the company subscribers possess the business registration permit as granted by the different county and city competent authorities, the method by which a subscribers name is listed should be checked and strictly verified, so as to prevent such listing from causing confusion and from being held jointly and severally liable with the subscribers under Article 21 of this Law.
4. Apart from writing to the Ministry of Economic Affairs (MOEA) and the competent authority in charge of commercial registration, requesting that names of commercial establishments that can easily lead to confusion (such as _ _ _xxx Center) be handled with caution, the Commission has also reached a consensus with different local competent authorities during their coordination meeting: For companies using registered business names to publish misleading advertisements, different local business registration authorities are requested to comply with the letter from the of the Ministry of Economic Affairs dated March 2, 1985 (#08113), which states using a repetition of certain words, such as four (4) dashes (-) each of which looks like the Chinese word for one or eleven (11) dashes (-) each of which looks like the Chinese word for one, as a business name which is not distinctive, is inconsistent with common business practice, and may lead to confusion. Companies should be advised not to use these names, and such names are not allowed to be registered. Thus, the listing of names leading to possible confusion may be prevented through a careful review of the business names during the business registration process.

Relevant article of law: Fair Trade Law, Article 21

There are differences in the calculation of construction area among the Construction Law, the registration agency, and the trade practice. Construction companies also have different understanding from that of the buyers, thusresulting in conflicts among the parties involved. To safeguard the interests of the general consumer and to make public of the transaction information, the Commission has, taking into consideration of the industry practice, formulated the following principle to determine whether the use of terms such as usage area and common area in advertisements by the construction companies is in violation of Article 21 of this Law. In advertisements of pre-sale apartments, construction companies often use terms such as usage area, common area, interior area, and private-owned area, or other terms not legally defined and which are unclear to the trading counterpart. If such terms are not clearly defined in the advertisements, which cause the trading counterpart to misunderstand the area involved, such advertisement is misleading and in violation of Article 21 of this Law. However, where the construction company has stated any of the following in the advertisement of pre-sale apartments, such advertisement shall not be considered misleading.

1. Where the construction company has, in a noticeable area of the advertisement (such as near the words usage area, common area, interior area, and private-owned area), stated the meaning of such terms, using words whose size is not smaller than the size of the words used to indicate the floor area, to prevent the trading counterpart from being misunderstood.
2. Where the construction company has, in the advertisement for pre-sale apartments, stated the area of the main structure or of the interior area that the general public can freely use, excluding the area of ancillary structures such as the balcony, utility area, flower planters, and open balcony.

Relevant article of law: Fair Trade Law, Articles 21, 41

Article 21 states that the advertising agent and the advertising medium shall be held jointly and severally liable. It refers to circumstances where the advertising agent and the advertising medium create, design or disseminate, or publish a misleading advertisement, in spite of the fact that the agent or medium knows or should have known that such an advertisement is misleading. The purpose of the article is to require the advertising industry to filter out false or misleading advertisement as many as practically possible. Thus the Article is applicable only to the extent where the advertising industry has the possibility to control the situation and make the necessary filtering.

Since the advertising media industry will only be held jointly and severally liable for damages, without any criminal and administrative liabilities and since the matters of joint and several civil liabilities are within the jurisdiction of the courts, the applicability of Article 21(4) on the advertising agent and advertising media industry will be determined by the courts.

Relevant article of law: Fair Trade Law, Article 56

In principle, any party who is claiming compensation shall bear the burden of proof against those parties responsible for the advertisements who know or have reason to know that the advertisement is misleading.