August 2022
Sally Yang
The Fair Trade Commission of Taiwan (hereinafter, the “TFTC”) rendered the Gong-Chu-111039 Disposition of June 10, 2022, holding that the act of false probability claims of opportunistic goods engaged by Gamania Digital Entertainment Co., Ltd. (hereinafter, “Gamania”) constitutes an act of false advertising under Article 21 of the Fair Trade Act, and Gamania was fined NT$2 million in accordance with Article 42 of the same law.
Facts of this case
Lineage M is an online game originally developed by a Korean manufacturer, and Gamania obtained the agency right to operate and sell the game in Taiwan. After purchasing production materials in the game store of the game, a player can make the product “Purple Cloth” at the probability set for the production materials. However, Gamania did not disclose the actual probability set for the production of the product.
In response to the question of “whether the probability of event production, card drawing, and synthesis can be disclosed” raised in a seminar conducted by Gamania to give back to players in December 2019, the company replied on the spot: “The probability for the Taiwanese version is exactly the same as that for the Korean version.” However, the TFTC considered the content published on the website of the original Korean manufacturer, the meeting minutes of the Department of Legal Affairs of Taipei City Government, and Gamania’s group conversation records in communication software, and found that the production probability of Purple Cloth for the Taiwanese version is 5%, while the production probability of Purple Cloth for the Korean version is 10%.
Reasons of penalty
According to the TFTC, Gamania’s organization of a seminar is an act of communication to directly or indirectly share information with the general or relevant public by a method that informs the public. Its claim in the seminar that “the probability for the Taiwanese version is exactly as same as that for the Korean version” is a representation of a matter related to the gaming product and sufficient to affect trading decisions and is therefore an advertising act.
During the investigation of this case, the TFTC asked the Industrial Development Bureau of the Ministry of Economic Affairs, the competent authority for the online gaming industry, to provide its opinion. According to the Ministry of Economic Affairs, gaming operators usually set the probability of winning before selling opportunistic products or the original manufacturer provides relevant probability information. However, the probability set for the Taiwanese version of this opportunistic product “Purple Cloth” is actually different from that for the Korean version. Therefore, Gamania’s representation in the seminar is not consistent with the facts. This is sufficient to cause the general public to form a wrong perception or make an erroneous decision about the game content and create the effect of unfair competition in violation of Article 21, Paragraph 4, to which the provisions of Paragraph 1 applies mutatis mutandis, of the Act.
Brief analysis
1. This is the first case in which a penalty was imposed for the false advertising of an “opportunistic product” sold by an operator. This disposition stated that the operator’s claims or explanation related to the probability calculation formula information about “an opportunistic product purchased through indirect payment” could also constitute the criteria for “the sufficiency in affecting the reasonable judgment and the trading decision of the trading counterpart” under Article 21 of the Fair Trade Act.
2. In recent years, the TFTC has continued to strengthen the investigation and enforcement of false advertising cases. With the continuous change and evolution of product and service types and the increase in consumer awareness, the determination of the types of false advertising seems to evolve over time and has even become a matter of inter-ministerial concern (such as the Ministry of Economic Affairs and the Department of Consumer Protection). Operators are advised to pay attention to the accuracy of goods or service descriptions and enhance information disclosure to avoid legal violations.