Chu Hsiang International Corp. violated the Fair Trade Law by making false and misleading representations in advertisements

Updated at：

Taiwan

Case:

Chu Hsiang International Corp. violated the Fair Trade Law by making false and misleading representations in advertisements

Key Words:

massage brassiere, false advertising

Reference:

Taiwan High Administrative Court Judgment (90) Su Tzu No. 5508

Industry:

Barber and Beauty Shops (9620)

Relevant Law:

Article 21 of the Fair Trade Law

Summary:

1. In advertisements broadcast on cable television, Chu Hsiang International Corp. ("the plaintiff") allegedly made false and misleading representations by claiming that its "Dai Meng Feng Magnetic Action Massage Brassiere" product could actually increase bust size, in violation of the provisions of Article 21(1) of the Fair Trade Law. The Fair Trade Commission ("the defendant"), in 19 March 2001 disposition (90) Kung Ch'u Tzu No. 048, ordered the plaintiff to immediately cease making the above-mentioned false and misleading representations, effective from the day next following receipt of the disposition letter, and fined the plaintiff NT$500,000 in accordance with the provisions of the fore part of Article 41 of the Fair Trade Law. The plaintiff objected to the disposition and, following dismissal of a subsequent administrative appeal, filed an administrative lawsuit with the Taiwan High Administrative Court.

2. Articles 21(1) and 41 of the Fair Trade Law respectively state: "An enterprise shall not, on goods, in the advertising of goods, or by any other means of communication to the public, make or use any false or misleading representation 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," and "The Fair Trade Commission may order any enterprise that violates any provision of this Law to cease or rectify the conduct or take necessary corrective measures within a specified time period; in addition, the Fair Trade Commission may impose a fine of not less than fifty thousand and not more than twenty-five million New Taiwan Dollars." In the disputed advertisements, the plaintiff claimed its product was "guaranteed to increase actual overall bust size after one month." That the claims made in the advertisements were false and misleading is confirmed by the plaintiff's inability to provide any relevant empirical evidence of its claims regarding the effect of its product.

3. The main legislative purpose of Article 21 of the Fair Trade Law is to ensure fair competition among enterprises and safeguard the rights of consumers. To avoid omissions, paragraph 1 is framed in inclusive language with multiple parallel examples, and is clearly applicable to the false and misleading representations made in the plaintiff's disputed advertisements with regard to the use of the product. Also the word "content" in paragraph 1, although not specifically defined in the text of the Fair Trade Law, is nonetheless be interpreted to mean the average consumer's understanding of a given product's actual substantive content or any of a variety of connotations embodied by that product. Thus the content of a product may include its physical components, structure, composition, nature, functions, and consumer expectations regarding the effects of its use. Therefore the plaintiff's attempt to restrict the scope of applicability of Article 21 by arguing that "the efficacy of the product" is not tantamount to "the content of the product" lacks credibility. In summary, the plaintiff's lawsuit is found to be without grounds and is dismissed. Appendix Chu Hsiang International Corp.'s Uniform Invoice Number: 23941362 Summarized by Lai, Chia-Ching; Supervised by Wang, Rong-Ging