The text of the Fair Trade Law makes it clear from the very beginning that the essence of the law is "Protecting the business order and the rights of consumers, ensuring fair competition and promoting economic stability and prosperity." "The law can be simply explained in this way," says Yang Hsiou-chuan, the head of the Legal Affairs Division of the Fair Trade Commission.
But while the essence of the Fair Trade Law is simple, because it involves the complicated realm of commercial management and because it firmly upholds the principle of "fair competition," everyone has different understandings of it. After being invited to offer his views on the law at several explanatory conferences, the lawyer Yu Ying-fu discovered that the business world has come up with some problems that no one had ever foreseen.
For example, there is the problem of brands with similar names. What level of similarity is permissible?
In fact, the Fair Trade Law is designed only to regulate behavior that exceeds that bounds of proper competition. Generally speaking, false advertising and monopolistic collusion are areas covered by the Fair Trade Law.
Let's look at the first case in which the law was found to have been broken. Maybe that will clear things up.
Over the New Year's vacation, the Shangmeng advertising agency held an exhibition on "Super Cars, Motorcycles and Modern Products" at the exhibition hall of the China External Trade Development Council. Unexpectedly, consumers who paid for admission filed complaints. Investigators of the Fair Trade Commission ruled that the sponsoring group, which advertised a car exhibit whereas daily-use products were actually being sold within, used "false pretenses to mislead people." As a result, the Fair Trade Commission ruled that the law was broken and requested that Shangmeng must clearly state in its advertising "the sale of daily-use products." Otherwise, it would be penalized up to NT$1 million in accordance with Article 41 of the Fair Trade Law until it stops or makes a correction. Shangmeng had originally planned to move the exhibition to Taichung, but they canceled their show there to avoid being penalized.