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Warning to Five Household Electric Appliance Mass Merchandisers

November 20/2003
Japan Fair Trade Commission

The Fair Trade Commission investigated representations concerning household electric appliances (hereinafter “Appliances”) sold by household electric appliance mass merchandisers,and found that Yamada Denki Co., Ltd. (hereinafter “Yamada”) had made the representation as shown in 1 below. Therefore, the Fair Trade Commission issued today a warning to the company, asserting that the company is suspected of being in violation of Subsection 2 (misunderstood advantages) of Section 4 of the Premium and Representation Act.

 In addition, the fact that Kojima Co., Ltd. GIGAS K. K., DEODEO Corporation and PLUG CITY Co., Ltd. (hereinafter the “four companies”), which are members of the Home Electric Appliance Fair Trade Council (hereinafter “Fair Trade Council”), made the representation shown in 2 below was found. Therefore, the Fair Trade Council issued a stern warning to the four companies before today, asserting that the representation constitutes a misleading representation as provided in Item 2 of Article 7 of the “Fair Competition Code Concerning the Representation in the Retail Business of Home Electric Appliances.”

 In addition, the backdrop of the act is considered to be that the representation of prices is made using the average of prices indicated at the shops of competing entrepreneurs. Therefore, with respect to this representation of prices, the Fair Trade Commission put together an opinion based on the Premium and Representation Act and points to note in making representations in light of the “Opinion on Misleading Representation of Prices Based on the Premium and Representation Act” (issued by the Fair Trade Commission on June 30, 2000), and today requested that Fair Trade Council make these known to all members without exception (refer to the attachment).

1. Gist of the warning to Yamada

(1) Profile of Yamada

Name: Yamada Denki Co., Ltd.
Address: Maebashi City, Gunma Prefecture

(2) Gist of suspected act of violation

 Yamada, when selling televisions at its Tech Land Tsunashima Tarumachi Store around January 2003, set up “basic prices,” which were the average of the prices shown at the stores of entrepreneurs competing with the company, based on an investigation conducted for the immediately preceding week, and made a representation to the effect that the prices would be discounted. However, the basic prices of the products were significantly higher than the average of the latest prices shown at the stores of entrepreneurs competing with the company.

 In addition, although the average prices were almost unchanged during the sale period for the televisions, the basic prices were raised on the final day of the period, and a representation was made to the effect that the basic prices after the rise would be discounted.

 The above representation suggests a misleadingly high rate of discount, and is suspected of causing general consumers to have the misunderstanding that the terms of trade are significantly advantageous for them.

2. Gist of the stern warning issued to the four member companies of the Fair Trade Council

(1) Profile of the four member companies of the Fair Trade Council

Name: Kojima Co., Ltd.
Address: Utsunomiya City, Tochigi Prefecture

Name: GIGAS K. K.
Address: Yatomicho, Kaihu District, Aichi Prefecture

Name: DEODEO Corporation
Address: Naka-ku, Hiroshima City

Name: PLUG CITY Co., Ltd.
Address: Isezaki City, Gunma Prefecture

(2) Gist of suspected act of violation

 When selling part of the Appliance, Kojima Co., Ltd. set up “market survey prices,” which were the average of the prices shown at the stores of entrepreneurs competing with the company, based on an investigation conducted for the immediately preceding week. The company then made a representation that was the same as that of Yamada, as described in 1 above. At the time of the sale of a part of the Appliance, GIGAS K. K., DEODEO Corporation and PLUG CITY Co., Ltd. increased the prices shown at stores immediately before the period of the special sale, and represented that prices would be discounted from the prices that prevailed after the increase at the stores.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.



Japan Fair Trade Commission:

100-8987 1-1-1 Kasumigaseki, Chiyoda-ku, Tokyo,Japan
Tel: +81-3-3581-1998
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