Judgment of the Taipei High Administrative Court finding that Ta Ping Cable Television Co., Ltd. violated the Fair Trade Law through false and misleading presentations or symbols with regard to its operational status

Taiwan

Case:

Judgment of the Taipei High Administrative Court finding that Ta Ping Cable Television Co., Ltd. violated the Fair Trade Law through false and misleading presentations or symbols with regard to its operational status

Key Words:

cable television, false advertising

Reference:

Taipei High Administrative Court Judgment (91) P’an Tzu No. 2164

Industry:

Television Industry (8620)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. A complaint had been made against the plaintiff (Ta Ping Cable Television Co., Ltd.—below, “Ta Ping”) prior to 20 June 1998 about false advertising with respect to its operational status, and through investigation by the defendant (the Fair Trade Commission), it was found that the plaintiff, as of June 1998, was clearly aware that in accordance with the then-current provisions of the Cable Television Law, it was not to engage in cable television operations, having not yet obtained a cable television license. Further, while in the Ta Li operations district, only Ta Tun Min Chu Cable Broadcasting System Co., Ltd. was a legal cable television program broadcaster, nevertheless, advertising circulars distributed by Ta Ping in Taichung County locations such as Ta Li City, Ta Ping City, Wu Jih Hsiang and Wu Fung Hsiang stated that it was “the first in central Taiwan, and the only legal cable television company,” and “currently the only legal cable television operator in central Taiwan.” Such conduct was clearly in violation of the Fair Trade Law provisions in force at the time of the conduct, which were the mutatis mutandis application of Article 21(1), through Article 21(3); in accordance with the fore part of Article 41 of the same law, Ta Ping was ordered in the disposition of 22 March 1999 [(88) Kung Ch’u Tzu No. 032] to immediately cease use of the false and misleading presentations or symbols referred to above with regard to its operational status. The plaintiff did not accept the disposition, and initiated administrative action after dismissal of subsequent appeals.

2. Article 21(1) of the Fair Trade Law provides: “An enterprise shall not, on goods, in connection with the advertising of the goods, or in any other way that is communicated to the public, make or use any false or misleading presentation or symbol as to price, quantity, quality, content, production process, production date, validity period, method of use, uses, place of origin, manufacturer, place of manufacture, processor, place of processing, and so forth.” Article 21(3) of the Fair Trade Law provides: “The provisions of the two preceding paragraphs shall apply mutatis mutandis to an enterprise’s services.” Further, Article 41 of the Fair Trade Law provides: “With respect to an enterprise that violates the provisions of this Law, the Fair Trade Commission may specify a time period within which the enterprise is required to cease or rectify its conduct or within which it must adopt corrective measures. If within the specified time period the enterprise fails to cease or rectify its conduct or to take corrective measures, the Fair Trade Commission may issue additional orders that the enterprise cease or rectify its conduct or take corrective measures within a specified time period, and impose successive fines of not more than one million New Taiwan Dollars until the conduct in question cease or is rectified or until the corrective measures are adopted.” In this case, during the month of June, 1998, the plaintiff disseminated advertising in Ta Li City, Taichung County, with content such as the following: “the first in central Taiwan and the only legal cable television company,” “Taichung’s ‘Ta Ping’ soon to obtain cable television license,” “Ta Ping is currently the only legal cable television operator in the central Taiwan area,” “Heavens! Will the nearly 80,000 subscribers in the Tun District become illegal subscriber ‘orphans’?” “Ta Ping Cable Television has already obtained approval from the competent government authority,” “even if other broadcasting systems will have to cease operations due to Ta Ping’s acquisition of a lawful operating license. . .” “Ta Ping is willing to look after the rights of viewers in the Tun District,” “Ta Ping will fully absorb subscription charges coming due later from other operators,” “better to switch to Ta Ping now than get cut off later,” and “Are the high rates charged by illegal companies reasonable? Don’t stand by and wait! Don’t hesitate! When legal companies start broadcasting, illegal ones get cut off.” The texts of the above advertisements clearly showed Ta Ping presenting itself as “the first in central Taiwan, and the only legal cable television operator.” Even if the only effect of its Taichung advertisement “Ta Ping soon to obtain cable television license” would have been to cause subscribers to mistakenly assume that other currently operating cable programming system operators were illegal, that was contrary to the facts, and would have affected the rights and interests of competitors, disrupting the overall trading order. The original disposition, holding that the plaintiff had used false and misleading representations or symbols with regard to its operating status, in violation of the Fair Trade Law provision in force at the time of the act, the mutatis mutandis application of Article 21(1) through Article 21(3), was found to be without error. Though the plaintiff did obtain a cable television system operator’s license from the Ministry of Transportation and Communications in February 1998, at the time the advertising was published the plaintiff had not yet obtained a cable TV distributor’s license from the Government Information Office. The fact that it did later obtain such a license did not alter the fact that at the time of the advertising, it was not, in fact, the only legal cable television operator. Ta Ping’s false advertising affected the rights and interests of competitors, violating the Fair Trade Law provision in force at the time of the act, the mutatis mutandis application of Article 21(1) through Article 21(3) was without error. Thus, the dismissals of Ta Ping’s appeal and re-appeal were found valid.

Summarized by Lai, Chia-Ching; Supervised by Wang, Rong-Ging