Q&A: online advertising in Taiwan

Advertising

What rules govern online advertising?

Generally speaking, the laws and regulations applicable to advertising should also apply to advertising on the internet (including in the metaverse). The main laws include, among others, the Consumer Protection Act (CPA) and the Fair Trade Act (FTA) (and relevant enforcement rules, guidelines, etc).

Pursuant to the Financial Supervisory Commission’s (FTC) Disposal Directions (Guidelines) on Online Advertisements, online advertising refers to the actions, for the purposes of selling its products or services, that a business adopts to disseminate information, via the internet, with regard to the products or services in order to attract trading opportunities. In addition, advertisement refers to the conduct of disseminating messages or content of promotion by means of television and radio broadcasting, films, slides, newspapers, magazines, flyers, posters, signboards, arches, computers, facsimiles, electronic video, electronic voicemail or other, to the general public pursuant to the CPA.

Both the CPA and FTA adopt the concept of ‘truthful representations’ and ‘full disclosure’. For example, pursuant to the FTA, no enterprise shall make or use false or misleading representations or symbols in matters that are relevant to goods and sufficient to affect trading decisions, such as the price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, place of processing, etc.

For advertising on the Internet, the Fair Trade Commission (FTC) further promulgated the FTC’s Disposal Directions (Guidelines) on Online Advertisements, which specify certain types of false or misleading representations or symbols with respect to online advertisement (eg, the advertisement does not clearly specify time, methods of use, or types of online sweepstakes activities). A business operator violating such Disposal Directions would constitute a violation of the FTA.

What rules govern targeted advertising and online behavioural advertising? Are any particular notices or consents required?

Pursuant to the Disposal Directions (Guidelines) on Online Advertisements promulgated by the FTC, online advertising refers to the actions, for the purposes of selling its products or services, that a business adopts to disseminate information, via the internet, with regard to the products or services in order to attract trading opportunities. In addition, advertisement refers to the conduct of disseminating messages or content of promotion by means of television and radio broadcasting, films, slides, newspapers, magazines, flyers, posters, signboards, arches, computers, facsimiles, electronic video, electronic voicemail or others, to the general public pursuant to the CPA.

There are no rules governing targeted advertising and online behavioural advertising, while compliance with the Personal Data Protection Act (PDPA) (ie, obtaining informed consent) is required if collection, processing and use of personal data would be involved.

Are there rules against misleading online advertising?

Pursuant to the FTA, no enterprise shall make or use false or misleading representations or symbols in matters that are relevant to goods and sufficient to affect trading decisions. While not required under the law, in practice it is generally suggested that a business operator must be able to substantiate claims (eg, reports by independent and credible third parties, survey results from qualified market research companies or certificates from regional or national standards boards), and file and record all substantiation in the event that the authorities (eg, the FTC) request for copies. The above rules apply to all products and services, while there would be additional rules applying to industry-specific industries.

Are there any digital products or services that may not be advertised online?

Generally, there exists no specific prohibition on ‘online advertisement’ for ‘digital’ products or services in Taiwan, if they are legal. However, please note the following illegal activities for online advertisement:

• advertisement of regulated products or services that have not been approved by the regulator, such as online advertisement of a ‘digital’ banking service that does not have the prior approval or licence from the Financial Supervisory Commission; and
• advertisement of digital products or services that involve defamation (articles 309 and 310 of the Criminal Code) or distributing obscene material (article 235 of the Criminal Code).

What is the liability of content providers and parties that merely host the content, such as ISPs? Can any other parties be liable?

A content provider’s liabilities would depend on its actual act involved (eg, liabilities under Copyright Act for copyright infringement, liabilities for misleading advertising under the FTA and the CPA, liabilities for defamation under the Civil Code and the Criminal Code).

As to the party hosting the content (eg, an ISP), whether it would be held liable for the content provider's act should depend on the relevant facts and the regulations or areas of law involved. For example:

• as to copyright, an ISP may be exempted from the liabilities if it satisfies all the conditions required for the 'safe harbour’ under the Copyright Act; and
• for misleading advertising, relevant Taiwan court precedents hold that an ISP may be deemed as an advertising medium and shall be subject to the FTA and the CPA, under which it may be jointly and severally liable with the violators in the event that it knows or should have known such advertisement to be misleading but fails to delete such advertisement.