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NEW FTA MITIGATES TESTIMONIAL PROVIDERS' JOINT AND SEVERAL LIABILITIES RESULTING FROM MISLEADING ADVERTISEMENTS



The amended Taiwan Fair Trade Act ("TFTA") promulgated in November 2011 mitigates testimonial providers' joint and several liabilities, besides incorporating a leniency program to regulate concerted actions.

 

In light of the rising number of disputes over misleading advertisements featuring celebrity testimonials, the TFTA was amended in 2010 to require that the testimonial provider be jointly and severally liable with the principal of the advertisement for any damage arising therefrom if he or she knows or could have known the advertisement is misleading. Nevertheless, given that most disputes arose from the consumers' misplaced faith in celebrity testimonials, and the testimonials of ordinary people are not as convincing, Article 21 of the new TFTA mitigates ordinary testimonial providers' joint and several liabilities to the extent of no more than 10 times of their remuneration received from the principal for the testimonial.

 

In summary, where a celebrity provides a testimonial for an advertisement that the celebrity knows or could have known to be misleading, he or she should still be jointly and severally liable with the principal of such advertisement for damage arising therefrom, while an average person bears limited liability based on the remuneration received for the testimonial.

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