Advertising authority investigating whether Huawei breached guidelines in smartphone promotion

Members of the public seen outside the Huawei store at Nex shopping mall in Serangoon on July 26, 2019. Many consumers who queued up for the Huawei Y6 Pro were disappointed and angry.
PHOTO: The Straits Times

SINGAPORE - Singapore's advertising authority is investigating whether tech giant Huawei breached industry guidelines in its promotion of a smartphone deal that led to chaotic scenes at its stores across the island last Friday (July 26).

The Advertising Standards Authority of Singapore (Asas) said in response to queries on Tuesday that it has received 10 complaints on the Huawei promotion. It is engaging Huawei to assess if the Chinese phone maker had complied with the Singapore Code of Advertising Practice guidelines on the availability of products and bait advertising.

According to the guidelines, advertisers should ensure adequate supply of products to meet foreseeable demand generated by an advertisement or promotion, and make clear any limitations of the product's availability.

The code also states that advertisers should not seek to entice consumers into a retailer's premise with no real prospect of selling the advertised or promoted goods at the price offered.

Asas - the industry's self-regulatory body - flexes its muscle through its member media owners.

Its chairman, Professor Ang Peng Hwa, said that media owners will not carry advertisements that have been ruled to have breached the code. Those in its council include Singapore Press Holdings, Mediacorp, Singtel, StarHub and M1.

Huawei told The Straits Times on Tuesday that the only advertisement for the promotion, aside from online posts, was published in Chinese daily Lianhe Wanbao last Thursday. It pointed out that the terms and conditions printed at the bottom of the full-page ad state that the promotion is on a first come, first served basis while stocks last.

Huawei added that it is drafting a response to the allegations of misleading advertising.

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.

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 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. Thousands who had queued for hours were left empty-handed and the police had to be called in at several outlets to manage the angry crowds.

Huawei apologised for the insufficient supply last Friday and said it had recorded an "unprecedented surge of demand". It did not say how many phones were available, though some customers said they were told by staff that there were fewer than 40 phones allotted per store.

Consumers Association of Singapore (Case) president Lim Biow Chuan told The Straits Times on Tuesday that Case has engaged Huawei to, among other things, “understand the quantity of units of Y6 Pro 2019 made available for the Huawei promotion and the actual quantity sold”.

He had said on Monday that he believed Huawei’s advertisement to be misleading and in breach of consumer protection laws as it did not specify that stocks were limited. 

Case contacted the Competition and Consumer Commission of Singapore (CCCS) on Monday to discuss potential action against Huawei.

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

This article was first published in The Straits Times. Permission required for reproduction.

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