Hsu Huei Ting Beauty Salon

Case:

Huei Chi Hsu was dissatisfied with Executive Yuan's appeal decision Yuan Tai Su Tzu No. 0940092101 regarding Hsu Huei Ting Beauty Salon's violation of the Fair Trade Law and filed an administrative litigation which was overruled by Taipei High Administrative Court

Key Words:

weight loss and beauty treatments, unequal positions in information

Reference:

Taipei High Administrative Court Judgment (95) Su Tzu No. 00104

Industry:

Barber and Beauty Shops (9620)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The plaintiff herein, Huei Chi Hsu (for Hsu Huei Ting Beauty Salon) was complained for failing to disclose important information regarding programs and products of weight loss and beauty treatments and employees' professional qualifications in writing, and selling same types of programs to the complainant before the original programs were finished. Upon the findings of the Fair Trade Commission (“FTC”, the defendant) after its investigation, the Plaintiff was determined to have engaged in conspicuously unfair conducts sufficient to affect trading order and violated Article 24 of the Fair Trade Law by failing to provide its trading counterparts with sufficient opportunities to review contracts, failing to enter into a standardized written contract with the trading counterparts, and failing to display its written professional certificates at a obvious spot within the place of business. The FTC thereby ordered the plaintiff to immediately cease the aforesaid unlawful acts from the day after the disposition letter was served and imposed an administrative fine of NT$100,000 in accordance with the fore part of Article 41 of the Fair Trade Law. The plaintiff was dissatisfied with the disposition and filed this administrative litigation after its appeal was overruled.
2. Pursuant to Article 24 of the Fair Trade Law, in addition to what is provided for in this Law, no enterprise shall otherwise have any deceptive or obviously unfair conduct that is able to affect trading order. Additionally, the fore part of Article 41 of the Fair Trade Law provides that the FTC may order any enterprise that violates any of the provisions of this Law to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, it may assess upon such enterprise an administrative penalty of not less than NT$50,000 nor more than NT$25,000,000. Article 24 of the Fair Trade Law is a supplementary provision for other provisions set forth in the same law and shall be applicable to areas not covered by other provisions. The term “trading order” set forth therein shall refer to the one satisfying social ethics and the principle of efficiency competition. The true spirit of trading order is what holds social ethics and freedom and fair competition together. In the event that any deceptive or conspicuously unfair conducts performed during a transaction between enterprises or between an enterprise and a consumer, these conducts should constitute a violation the aforementioned provision.
3. The cause for most beauty treatment disputes would be beauty treatment enterprises' failure to disclose important information relate to the consumption. Such failure usually leads to a vague relationship between enterprises and consumers. Moreover, due to information inequality between enterprises and consumers, enterprises might employ consumers' disadvantageous position to engage in deceptive and conspicuously unfair conducts that are able to affect trading order and are violations of the Fair Trade Law. Plaintiff stated on March 17, 2005 that the consumers who purchased its services were all its members who did not have to pay additional membership fees. The services provided were mainly prepaid in forms such as “Anniversary Celebration Value Stored Cards,” “Anniversary Celebration Preferential Cards,” and “Member's Discounts.” In other words, after a certain amount is prepaid, consumers may be entitled to services provided by the plaintiff in addition to the gifts or discounts. The price of consumption made each time will be deducted from the pre-paid value. Up to March 2005, about 100 members had received the continuous and combined services from the plaintiff by using the pre-paid payment method. It is confirmed that the services provided by the plaintiff meet the description of membership consumption and continuous or combined package programs. Furthermore, according to the records regarding the investigation on information disclosure done by the defendant's personnel on March 16, 2005, it was found that the plaintiff did not enter into any written contract with its members. The plaintiff also admitted that it ceased entering any standardized written contract with consumers for transactions from early 2002 to March 2005 and did not provide the same for review either. The plaintiff only recorded the purchased programs, amount of money, terms, products and unit price on the program order sheets. The plaintiff's program order sheets unilaterally stipulated that “the execution of this program order sheet shall be deemed as the execution of and consent to the terms and conditions provided in our standardized contracts.” By merely employing verbal explanation to state the rights and obligations of both parties to the trade without disclosing service providers' professional qualifications or providing written contracts for members who spent tens of thousands of money on continuous or combined package programs, the plaintiff did not only deprive trading counterparts of their rights to fully reviewing contracts, it would also impede trading counterparts from claiming their rights with such an ambiguous relationship between both parties to the trade. It is certain that the acts that the plaintiff failed to provide trading counterparts with a chance to fully review the terms and conditions of the contract and failed to enter into standardized written contracts with consumers are conspicuously unfair to consumers and are able to affect trading order of the weight loss and beauty treatment industry. This Court finds the original disposition is correct and the plaintiff's petition groundless. Therefore, this Court will uphold the appeal decision and overrule the plaintiff's petition.

Appendix:
Hsu Huei Ting Beauty Salon's Uniform Invoice Number: 18439144

Summarized by Lai, Chia-Ching; Supervised by Lee, Wen-Show