TIPS^®  Taiwan Intellectual Property Special

Internet Company's Unfair Competition Aspects

The first Fair Trade Commission (“FTC”) Disposition on the internet company was made on November 9, 2000. FTC indicated that many Internet companies exaggerate on their web page that they own or operate the “largest” Chinese website in the world. Such allegation lacks of objective and supporting data and information, will fall into the category of false or misleading presentation which may cause confusion to the customers and thus will possibly be punished for a fine of not exceeding five hundred thousand dollars but not less than fifty thousand dollars. In this Disposition, the accused party, Horng-Lien Digital Distribution Corp., claimed in its website that “it is the largest network commercial transaction center.” However, the accused party had never produced convincing evidence to prove the reality of the above allegation. The FTC held that, such kind of allegation, without any additional statement or firm evidence, is likely to cause confusion to or mistake by consumers with respect to the price, content, and expectation. Accordingly, the FTC ruled that the above advertisement has constituted the violation of Article 21 of the Fair Trade Law (“FTL”) and demanded