Websites to be Liable for False Internet Advertisement.

On 8 November 2010, the Fair Trade Commission (“FTC”) of the Executive Yuan indicated that false Internet advertisements were increasingly circulated, and from 2003 until now, 33.8% of false advertisements were distributed via Internet, most of the commercials are related to weight loss and beauty care.  The FTC will clamp down on these advertisements more rigidly.

The FTC indicated that in addition to suppliers, the e-platforms, e-shopping websites and online sellers shall also be liable for the false advertisements because they “provide commodities” or “sell services” even though they are not manufacturers.

According to the FTC, the Internet advertisements involve various principals having legal capacity depending on the diversified websites on which the advertisements are posted, and whether the various subjects may be identified as “advertisers” bearing the liability for the false advertisements in accordance with Article 21 of Fair Trade Act shall be decided in terms of the entire trading procedure.  For example:

1. If the subject engaged in operating the website identified in the advertisement provides the commodities or sells the services independently, the subject shall be liable for the false advertisements, if any.  The same also applies to the businesses posting advertisements on their own website, e-shopping website operators, and online sellers engaged in online auctions

2. The e-shopping website vendors have substantial cooperative relationship with the website operator with respect to the distribution of commodities and advertisements thereof.  Therefore, they shall also be liable for the false advertisements, if any, jointly and severally with the website operator.

3. Bloggers who wrote articles to recommend certain commodities or services with the joint intention with the suppliers for misleading consumers by making misrepresentation.  In such event, the suppliers and the bloggers shall be jointly liable for the false advertisements, and be jointly punished under the Fair Trade Act for making misrepresentation intentionally.

The FTC also reminds that if e-shopping websites post advertisements for commodities or services provided or distributed by them independently, they shall be identified as the “advertisers” to bear the administrative liability towards the false advertisements under paragraphs 1 and 3 of Article 21 of the Fair Trade Act.  Furthermore, sometimes e-shopping websites are not likely to be identified as the “advertisers” in terms of their involvement in the operation and advertisements.  However, if the websites communicate or post the advertisements which they clearly know, or may assume, are likely to mislead consumers, they still might have to bear the civil liability as defined in paragraph 4 of Article 21 of the Fair Trade Act in the capacity of advertising media.  (2010.11)
/DC