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No. 4 of the Second Group of Model Cases involving the Protection of People's Livelihood Issued by the Supreme People's Court: Shanghai Hegu Biological Technology Co., Ltd. v. Shanghai Administration for Industry & Commerce (case of refusal to accept industrial and commercial administrative penalty)
最高人民法院公布保障民生第二批典型案例之四:上海赫谷生物科技有限公司诉上海市工商行政管理局不服工商行政处罚决定案
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No. 4 of the Second Group of Model Cases involving the Protection of People's Livelihood Issued by the Supreme People's Court: Shanghai Hegu Biological Technology Co., Ltd. v. Shanghai Administration for Industry & Commerce (case of refusal to accept industrial and commercial administrative penalty)
(case of refusal to accept industrial and commercial administrative penalty)
最高人民法院公布保障民生第二批典型案例之四:上海赫谷生物科技有限公司诉上海市工商行政管理局不服工商行政处罚决定案
[Key Terms]
administrative penalty ; frauds ; false publicity
[核心术语]
行政处罚;欺诈行为;虚假宣传行为
[Disputed Issues]
Where a business operator publicizes his products in the name of any other enterprise and organizes relevant activities to promote the products to consumers, shall the administrative department for industry and commerce impose punishment on him for frauds or for false publicity?
[争议焦点]
经营者假冒其他企业名义宣传其产品,并组织相关活动向消费者推销该产品,则工商主管部门应当按照欺诈行为还是虚假宣传行为对其予以处罚?
[Case Summary]

Though false publicity and frauds share similarities there are differences between them according to laws; the determination of false publicity focuses on other competitors' rights and interests rather than consumers' wrong decisions; the determination of frauds focuses on the protection of the lawful rights and interests of consumers. Therefore...
[案例要旨]
虚假宣传和欺诈行为虽然在行为上具有相似性但从法律规定的角度来看两者具有差异性:虚假宣传的认定侧重于其他竞争者的权益并不以消费者的错误决定为前提;欺诈行为的认定侧重于保护消费者的合法权益。因此...
No.4 of Second Group of Model Cases regarding Guaranteeing People's Livelihood Issued by the Supreme People's Court: Shanghai Hegu Biotech Co., Ltd. v. Shanghai Administration (case of dispute over industry and commerce for refusing to accept the industry and commerce administrative penalty decision) 最高人民法院公布保障民生第二批典型案例之四:上海赫谷生物科技有限公司诉上海市工商行政管理局不服工商行政处罚决定案
1. Basic Facts 基本案情
From September 2011, Plaintiff Hegu Company has purchased a series of “CITI” health food, including "CITI Jinzhukang" and other five varieties, from Sangang Company at the price of 60 yuan per case (65 yuan per case after January 2012) and sold them in Shanghai. In the business operations, the Plaintiff collected a large number of private telephone numbers and required its employees to utilize the Traveling Words Art that was uniformly designed and produced by the Company and other deceptive preset words art on the target crowds aged 60 or more, invited the elderly to participate in tourist activities it organized falsely in the name of Citigroup Inc. and Citibank free of charge, falsely claimed that Citigroup Inc. was established in 1832, played videos or PowerPoint documents with such publicity of corresponding therapeutic effects of “CITI” series of products. In the conference sales, the Plaintiff arranged its employees without any practicing qualification to take the pulse of the elderly on site in the name of “TCM doctors,” “diagnosed” the diseases of the elderly one by one by reference to the diseases listed in the Survey on Applications for Citigroup Traveling the Company has formerly required the elderly to fill out, and took the opportunity to sell a series of “CITI” health products to the elderly at the price of 898 yuan per case (798 yuan per case before February 2012). According to the special audit conducted by Shanghai Gong Xin Zhong Nan Certified Public Accountants Co., Ltd., the sales volume of Hegu Company from September 2011 to September 2012 amounted to 20,532,458 yuan; after deducting the costs of product purchasing and marketing amounting to 16,891,096.13 yuan, the refund to consumers amounting to 2,365,535.00 yuan, and the relevant tax of 12,795.92 yuan, the illegal gains amounted to 1,263,030.95 yuan. 原告赫谷公司自2011年9月起,以60元/盒(2012年1月后为65元/盒)的价格向三港公司采购“花旗·金竹康”等六个品种的“花旗”系列保健食品在上海地区销售。经营过程中,原告自行搜集大量上海市私人电话,以60岁以上的老年人作为目标人群,要求员工使用公司统一设计、制作的《旅游话术》等含有欺骗性的预设话术,以假冒的美国花旗集团、花旗银行等名义邀请老年人免费参加其组织的旅游活动,还谎称美国花旗集团成立于1832年,播放“花旗”系列产品相应治疗作用等宣传内容的视频或者ppt资料。会销过程中,原告安排无行医资质的员工以“中医”的名义,现场为老年人把脉,对照公司之前要求老年人填写的《美国花旗旅游申请调研表》中所反映的疾病,相应的逐一“诊断”老年人所患疾病,并借机以898元/盒(2012年2月前为798元/盒)价格向老年人销售“花旗”系列保健食品。经上海公信中南会计师事务所有限公司专项审计,赫谷公司自2011年9月至2012年9月,销售额总计20,532,458元;扣除产品采购、营销费用等成本合计16,891,096.13元、向消费者退款2,365,535.00元、相关税费12,795.92元,违法所得计1,263,030.95元。
On June 18, 2013, the inspection force of the Shanghai Administration for Industry and Commerce (hereinafter referred to as the “inspection force”) made an administrative penalty decision on Hegu Company and determined that the aforesaid act of Hegu Company has constituted a fraud. In accordance with the Regulations of Shanghai Municipality on the Protection of Consumer Rights and Interests, the inspection force decided to confiscate the illegal gains of the party concerned amounting to 1,263,030.95 yuan and impose a fine one time of the illegal gains amounting to 1,263,030.95 yuan, 2,526,061.90 yuan in total; and notified the party concerned of the right to sue and the time limit for prosecution. The Plaintiff held that the inspection force should punish it by reference to the terms on false publicity in the Anti-Unfair Competition Law and therefore it filed an administrative lawsuit with the People's Court of Xuhui District, Shanghai Municipality and requested the Court to revoke the administrative penalty decision on it.
......
 上海市工商行政管理局检查总队(下称“检查总队”)于2013年6月18日对赫谷公司作出行政处罚决定,认定其上述行为已构成欺诈,依据《上海市消费者权益保护条例》的规定,决定对当事人处罚如下:没收违法所得1,263,030.95元;处以违法所得一倍罚款1,263,030.95元,以上合计处罚2526061.90元。并告知诉权和起诉期限。原告认为应援引《反不正当竞争法》中有关虚假宣传的条款对其进行处罚,遂向上海市徐汇区人民法院提起行政诉讼,请求法院撤销对其作出的行政处罚决定。
......

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