Newsletter
False Claim as General Agent Violate Fair Trade Act
Manufacturers often rely on their agents or distributors to take care of the business in the regional markets they are not familiar with. It is not uncommon for such agents or distributors to emphasis that they are the general agents" or "exclusive distributors" of the region since such titles give consumers the impression that such agents or distributors are directly authorized by the original manufacturer and they are in charge the entire region. However, if a non-exclusive agent or distributor uses the title as a market ploy, such representation might violate the Fair Trade Act in Taiwan.
According to Article 21 of the Fair Trade Act in Taiwan, no enterprise shall make or use false or misleading representations or symbols on the matter that is relevant to goods and is sufficient to affect trading decisions on goods or in advertisements, or in any other way make it known to the public. Further, according to the Guidance on Article 21 of the Fair Trade Commission, if an enterprise makes false or misleading representation to suggest that it is the (exclusive) agent, (exclusive) distributor or authorized repairer of another business, the enterprise violates Article 21 of the Fair Trade Act. In a recent administrative decision, the Fair Trade Commission imposed penalties based on the above provisions against a company which made false claim to be a general agent in Taiwan.
In this case, the company was a non-exclusive agent of a German bike lock manufacturer. The company claimed to be the "official authorized general agent" of the manufacturer in Taiwan and put such statement on its Facebook page and YouTube videos. However, based on the Fair Trade Commission's investigation, there are other companies that were appointed by the manufacturer as agents or distributors in Taiwan.
In its decision, the Fair Trade Commission pointed out that the company’s statements were far from the truth and would mislead its trading counterparts. As such statements might undermine the trading order and cause unfair competition, the Fair Trade Commission held that the company violated Article 21 of the Fair Trade Act.