Leading local game operator defeated and penalized in Fair Trade Act violation case
E230824Y4 Nov. 2023（E281）
The Taipei High Administrative Court issued a press release on August 24, 2023 to the effect that the Court has entered into a judgment (under docket (111) Su-Zi No. 1005) on the case concerning Fair Trade Act violation filed by the plaintiff, Gamania Digital Entertainment Co., Ltd. against the defendant, the Taiwan Fair Trade Commission, and the judgment is in favor of the defendant and appealable.
The Taipei High Administrative Court judgment is summarized as follows.
1. Gist of the judgment: Plaintiff’s lawsuit should be dismissed.
2. Brief of the case: As stated in the main text of the disposition, Gong-Chu-Zi No. 111039 made against the plaintiff, Gamania Digital Entertainment Co., Ltd. by the defendant, the Fair Trade Commission on June 10, 2022 (hereinafter the “FTC Disposition”), (1) The plaintiff, Gamania Digital Entertainment Co., Ltd. (hereinafter “Gamania”), for sale of the online game, Lineage M (hereinafter the “game in dispute”) originally developed by NCSoft, held a player forum event on December 14, 2019 and proclaimed that “the probability for the Taiwanese version is exactly the same with that for the Korean version” as response to the questions raised by players in the forum, “whether the probability of event production, card drawing, and synthesis can be disclosed” and “whether the probabilities currently set are the same with those in the Korean version”. Gamania’s proclamation as the response in the forum is sufficient to affect transaction decisions and hence constitutes false and misleading representations in violation of the 4th paragraph of Article 21 of the Fair Trade Act of Taiwan; therefore, (2) A fine of TWD2 million should be imposed on Gamania.” Gamania disagreed with the FTC Disposition, and therefore, instituted an administrative lawsuit.
3. Summary of reasoning
(1) Gamania conducted the forum event in order to promote the game in dispute and to know players’ thoughts on the game as a basis for the optimization of the game in dispute. Also, Gamania live streamed the event on Facebook on the same day and also broadcasted the highlight clips of the event on the official Youtube channel of the game in dispute for public viewing afterwards. With respect to the aforesaid questions raised by the players of the game in dispute at the forum event (“whether the probability of event production, card drawing, and synthesis can be disclosed” and “whether the probabilities currently set are the same with those in the Korean version”) and Gamania’s reply to them (“the probability for the Taiwanese version is exactly the same with that for the Korean version”), the players were mostly concerned about the aforesaid questions, while Gamania also saw these questions as important and provided replies thereto because the questions and their replies to them will affect players’ willingness to pay for Taiwanese version.
In addition, Gamania admitted that the probability of success of production of the “Purple Cloth” for the Taiwanese version is 5% and that for the Korean version is 10%; that is, the success probability for production of the Purple Cloth in the Taiwanese version apparently differs from that for the Korean version, which makes it clear that the information provided and the representations made in the forum event were not consistent with facts. Such inconsistency is likely to cause the public to form mistaken understanding or to make erroneous decision with respect to the game in dispute, and ultimately to lead to the failure in the efficiency of market competition and give rise to the effect of unfair competition. In view of the foregoing, the Court determined that Gamania acts in violation of the 4th paragraph of Article 21 of the Fair Trade Act to which the provision of the 1st paragraph of the same Article applies mutatis mutandis. (The 1st paragraph of Article 21 of the Act provides that “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.”)
(2) In accordance with the forepart of Article 42 of the Fair Trade Act and also Article 36 of the Enforcement Rules of the Fair Trade Act and taking into consideration of the motivation, purpose, expected improper benefits involved in, the degree and duration of harm to market order caused by, the benefits derived on account of Gamania’s unlawful act, Gamania’s scale, operating condition, market position, past violations, attitude on rectification, and cooperation in investigation, and also Gamania’s paid capital of TWD1.7 billion, turnover, and the sales volume of the game in dispute (from 2019 through 2021) and the sales volume of the Purple Cloth (from October 2019 through 2021), the FTC assessed and imposed an administrative fine of TWD2 million without going against the principle of proportionality.
(3) To sum up, the FTC Disposition did not involve any contravention of laws. (Released 2023.08.24)
/CCS
