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Huawei ad under probe in Singapore for potential breach of guidelines

/ 12:50 PM August 01, 2019

SINGAPORE — Three organizations are now investigating whether technology giant Huawei breached consumer protection laws and advertising guidelines in its promotion of a smartphone deal that led to chaotic scenes at stores across Singapore last Friday.

This comes as Huawei said yesterday that it will give out $100 vouchers to about 5,000 people who had registered but failed to buy the Huawei Y6 Pro at a promotional price of $54.

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The Advertising Standards Authority of Singapore (Asas) told The Straits Times yesterday that it is assessing if the company had complied with the Singapore Code of Advertising Practice guidelines on the availability of products and bait advertising. It has received 10 complaints on the promotion.

The Consumers Association of Singapore (Case) contacted the Competition and Consumer Commission of Singapore (CCCS) on Monday to discuss potential action against Huawei, after Case president Lim Biow Chuan described its advertisement as misleading for not making clear that stocks were limited.

The CCCS said yesterday that it is looking into whether Huawei had breached the Consumer Protection (Fair Trading) Act.

The promotion, which slashed the price of the Huawei Y6 Pro 2019 from $198 to $54 for Singaporeans and permanent residents above the age of 50, began last Friday and was supposed to run for three days, until Sunday.

But it was cut short when the 27 stores selling the phone sold out almost immediately, in some cases before the stores had even opened.

Police had to be called in at several outlets to manage the angry crowds, as customers were told that some outlets had as few as 20 units available.

According to advertising guidelines, advertisers should ensure the adequate supply of products to meet foreseeable demand generated by an advertisement or promotion, and make it clear if the product’s availability is limited.

Asas – the industry’s self-regulatory body – flexes its muscles through its member media owners, which do not carry advertisements that have been ruled to have breached the code.

Huawei told The Straits Times yesterday that the only advertisement for the promotion, aside from online posts, was published in Chinese daily Lianhe Wanbao last Thursday.

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It said the terms and conditions printed at the bottom of the full-page advertisement stated that the promotion was on a first come, first served basis, while stocks last.

A post on its Singapore Facebook page last Wednesday advertising the promotion included a statement that the “promotion runs while stocks last”, though this was not included in the accompanying video or promotion posters displayed on other platforms such as online news and deal sites.

Huawei said its legal team is handling the matter with the authorities. It apologized for not being better prepared for the promotion, and said that it had clearly underestimated demand.

Those who had registered at its stores to buy the phone between last Friday and Sunday will receive the $100 vouchers within two weeks from Aug 2, Huawei said.

This will allow them to purchase the Y6 Pro 2019, which usually retails for $148, for just $48. The voucher can also be used for other selected models.

The company is working to ensure sufficient inventory to accommodate demand, the statement added.

When asked why advertisements for last week’s promotion listed the phone’s usual price as $198, a spokesman clarified that the price was reduced to $148 on July 13 as part of a National Day promotion, which will remain in place until the end of September.

The firm, which had previously declined to reveal the number of units available as part of the promotion, said yesterday that it had about 2,000 handsets in total.

On why customers were told that some stores had as few as 20 units, Huawei said each store was given a different allocation based on their past sales records.

“Certain retailers, for example Courts and Challenger, would have approximately 100 sets for their respective stores, and some heartland stores would have 20 to 30 sets,” it said.

“We are truly sorry for all the distress that was caused and we will be sure to be more mindful of our plans in the future,” the firm said.

TOPICS: Asia, Huawei, smartphones, technology
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