The Supreme Administrative Court rendered the 108-Pan-232 Decision of May 10, 2019 (hereinafter, the “Decision”), holding that if the preferential offerings stressed in an enterprise’s advertisements are sufficient to cause misperceptions, even though the consumers are subsequently provided with the complete information, this does not affect the finding of false advertising which undermines market trading order.
According to the facts underlying this Decision, the Appellant inserted audiovisual advertisements on TV and print advertisements on digital online media to advertise the tariff promotions for its National Integrated Network. Since the Appellee held that the service details set forth in the contents of such advertisements, which are sufficient to affect trading decisions, were false and misleading in violation of Article 21, Paragraph 4 of the Fair Trade Law, to which Article 21, Paragraph 1 applies mutatis mutandis, a disposition which imposed a fine was rendered in accordance with the first part of Article 42 of the same law. Dissatisfied, the Appellant brought an administrative action.
According to the Decision, the objectives of Article 21, Paragraph 1 of the Fair Trade Law are to require enterprises to make true representations in advertisements or other methods of viable communication with the public about the goods or services sold by the enterprises to ensure the order of fair market competition and market efficiency and to prevent any damage as a result of false advertising. What this provision seeks to sanction is unjust means of competition to win trading opportunities through false, untrue or misleading advertisements or other means of communication with the public with respect to the goods (services) of the enterprises. Therefore, if an enterprise makes any false, untrue or misleading representation on the quality and contents of goods (services) in their goods (services) or their advertisements or through other means of communication with the public, Article 21, Paragraph 1 of the Fair Trade Law should be deemed violated.
It was further pointed out in this Decision that whether the indications or representations set forth in Article 21 of the Fair Trade Law are false, untrue or misleading should be determined by the extent of differences between such indications or misrepresentations and the reality and by the sufficiency of affecting the reasonable judgment and trading decisions of trading counterparts with ordinary knowledge and experience. The existence of any preferential offering in the tariff plans provided by an enterprise and their scope of application are important bases for a consumer’s decision as to whether to trade. Therefore, when a telecommunications enterprise solicits trading opportunities by providing information about any preferential offering in its advertisements, it shall assume a greater obligation of caution to fully disclose the terms of restrictions to prevent the consumers from erroneous perceptions or decisions. In addition, whether the overall impression created by an advertisement and its effects are sufficient to cause erroneous perceptions or decisions of the trading counterparts should be observed based on the important trading information as indicated or represented in the advertisement and on the location of such information in the advertisement as well as the size, ratio and color of the font used. In addition, although the presentation in an advertisement allows a certain degree of creativity, still if the performance or preferential offering stressed by the enterprise in the advertisement is sufficient to cause misperceptions of the consumers, this not only undermines the rights and interests of the consumers but also constitutes unfair competition to the competitors and undermines market trading order in violation of Article 21 of the Fair Trade Law. Even if the consumers are subsequently informed by the sales people of the complete information, this still does not affect the finding of the fact that the enterprise has inserted advertisements that undermine marking trading order and does not exclude the liability of the enterprise.