Kyoto Company Falsely Identified Products as Electric Bicycles

The Yomiuri Shimbun

7:00 JST, January 18, 2023

KYOTO — A Kyoto company was allegedly selling vehicles that it falsely identified as electric bicycles, in violation of the Unfair Competition Prevention Law, it has been learned.

Police have sent papers to prosecutors on THE NeO company, which operated a bicycle shop in Nakagyo Ward, Kyoto, and its president for allegedly selling as electric assisted bikes what were actually motorized bicycles with pedals. The two types of bikes are similar in appearance.

According to investigative sources, the president has admitted the allegations, saying, “Fast bicycles are more popular and I wanted to make more profits.”

This is the first time that police have sent papers to prosecutors on a retailer in a case involving motorized bikes with pedals, the sources said.

The Road Traffic Law stipulates that electric bicycles are bicycles that can only be operated by pedaling and that the power boost from the motor must stop when the bike’s speed reaches 24 kph or more, among other definitions.

Two-wheeled vehicles not conforming to these conditions are categorized as motorized bicycles, which require users to follow such rules as having a driver’s license, wearing a helmet and attaching a license plate.

According to the sources, THE NeO imported from China motorized bicycles with pedals called Seagull 26 that do not need to be pedaled to operate and provide assistance in excess of the legal speed limit.

From December 2021 to April 2022, the company presented the vehicles as a “definitive version of the electric power-assisted bicycle” on its website and sold them through presentations that could mislead consumers into thinking they were electric bicycles.

The company reportedly gained customers’ trust by attaching to each vehicle a TS Mark sticker, which indicates that the bike has been accredited by a certified bicycle safety mechanic.

The Seagull 26 allows users to continue to increase the speed after reaching 24 kph, as well as to operate the bike at 6 kph without pedaling by pushing a button on the handlebars. The Seagull 26 does not have a license plate or a mirror.

THE NeO started operations in 2012 and sells products at brick-and-mortar and online stores. It sold the Seagull 26 from the start, moving about 300 units over the past 10 years for about ¥200,000 each.

Many of the people who purchased a Seagull 26 might be using it without knowing that it does not satisfy standards required by the Road Traffic Law.

The Kyoto prefectural police searched the Kyoto store in September and confiscated 10 types of two-wheeled vehicles, including the Seagull 26. The police believe all the vehicles were made in China and do not conform to the standards.