Complaint against Pacific Construction Company regarding its false statements in sales advertisements and deceptive/obviously unfair acts relating the "Pacific Commercial Center"
Chinese Taipei
Case:
Complaint against Pacific Construction Company regarding its false statements in sales advertisements and deceptive/obviously unfair acts relating the "Pacific Commercial Center"
Key words:
false, untrue or misleading representation, causing trading counterpart(s) to trade with it through deception or the concealment of important facts
Reference:
Fair Trade Commission Decision of 4 March 1998 (the 330th Commission Meeting); letter (87) Kung San Tzu No. 8608558-005
Industry:
Real Estate Industry (6040)
Relevant Laws:
Summary:
"False and untrue" as provided in Article 21 of the Fair Trade Law (“the Law) refers to a situation in which the representation or symbol is inconsistent with reality such that a considerable number of the general or relevant public are led to form a mistaken belief or make an incorrect decision. The term "misleading" refers to the context where the representation or symbol, regardless of whether the same conform to reality, causes a considerable number of the general or relevant public to form a mistaken belief or make an incorrect decision. A construction company is in violation of Article 24 of the Law if it misleads trading counterparts into trading with it, or causes its competitors to lose trading opportunities, through deception or the concealment of important facts, or if it improperly obstructs its trading counterparts from making free decisions regarding the transaction.
According to the respondent's advertisements for the "Pacific Commercial Center" and "commercial suites" allegedly in violation of the Law, the Center provided "elite, full-service commercial space" and "luxuriously decorated commercial suites for new working persons." The related sales video said, "a super intelligent, steel-structured commercial building combining commercial office and hotel service functions -- Pacific Commercial Center rises to meet expectations...." According to the advertising literature, the Center and commercial suites provided either commercial office or combined residential and commercial service functions, and the registered use for all floors of the building was general office. The building was situated in area classified under "Commercial 2," which, according to Article 4 of Taipei City Use/Zoning Rules, refers to the business zone for residential areas and regional retail sales, services and related business activities. Each of the units in the building had a bathroom and could function for residential or commercial use. Incorporated with the public facilities, such as the secretarial, information and commercial meeting centers, the building provided services to meet commercial needs. As indicated by the Taipei City Government Bureau of Public Works and according to the use license registration, none of the floors of the building was approved for use as a "commercial center" or "commercial suite." However, neither the Construction & Planning Administration of the Ministry of Interior nor the Taipei City Use/Zoning Rules provided any use classification or categorization for "commercial center" or "commercial suite." Also, there was no commonly accepted definition of the two terms. Furthermore, as to which classification applies, under the current regulations, an applicant shall submit the business' type, content, scale, and impact on the surrounding environment to the panel in charge of the categorization of registered business items under the Taipei City Government. Accordingly, whether this case involve use of the building in contravention of regulations should be determined by the relevant construction authority based on actual use. By its nature and function, the Center was able to provide commercial or residential use. Therefore, until the competent construction authority provides a definition and classification, or unless the actual use of the building violates the law, we cannot find that the respondent's advertisements contained false statements or violated other provisions of the Law.
Regarding the alleged false advertisements that the building was located in the Hsin Yi Planned District, we found that the building was to be located at the intersection of Kuang Fu South Road and Hsin Yi Road, which is close to the Taipei World Trade Center and Taipei City Government. Because the location was close to the Hsin Yi Planned District, the building was advertised as being "surrounded by extraordinary neighbors! The Taipei City Government to the east, World Trade Center, World Trade Center Exhibition Hall, Hsin Yi Planned District...." According to the current real estate trading situation, there are numerous factors affecting price determination, such as the building's structure, form, traffic situation, location, etc. Even the various projects in the Hsin Yi Planned District differ in price. In the absence of [evidence of] deliberate concealment or misleading actions, and based on ads such as "Pacific Commercial Center, new landmark in the Hsin Yi Planned District" and "first-ever, imported from Tokyo, elite, full-service commercial space," we could not find that the respondent intended to free-ride [on the desirability of the Planned District] to keep its prices high. In addition, the advertisements clearly indicated the actual location of the building, the surrounding roads and environment. Consumers were not likely to be confused or mistake the location.
Regarding the height of the building and the installation of additional cabinets, the building advertisements read, "3.3 meter floor height, thoughtful design, tall and wide interior, allowing a pleasant and comfortable working space, even allowing for the placement of a row of cabinets below the ceiling without the least pressure" and "it's a space for work during the day and a comfortable castle for rest at night." The complainant provided a sales video of a sample unit regarding the "cabinet." According to Architecture Engineering Rules, Title of Implementation of Architectural Design, Chapter 1, Article 1(x), floor height refers to the vertical height from the interior floor surface of one floor [e.g., the 2nd Floor] to the floor surface the next floor up [e.g., the 3rd Floor]. According to the shop drawing of the building, the floor height of the building is 1.4 meters for the first floor, 3.9 meters for floors two through four, 3.4 meters for floors five through twelve, and 3.3 meters for floors thirteen through twenty. There was no inconsistency with the advertisements of "3.3 meters in height." The advertisements did not make any statement or description regarding extended floor height or allowing for the placement of additional levels. As to the advertisement "even allowing for the placement of a row of cabinets below the ceiling," it referred to the interior design for placement of books and materials, which differs from the placement of additional levels. This Commission dispatched personnel to investigate the site and found the design of the building did allow for placement of a row of cabinets without undue spatial constraint. The advertisements did not make false statements.
Regarding the alleged false advertisements as to monthly rent, having considered the Hsin Yi Real Estate investigation of domestic commercial center rental income provided by the respondent, the respondent's cooperation on the setup of the subject building's public facilities, and the fact that the advertisements clearly specified the amount as "estimated monthly rent," we found the advertisements acceptable.
In conclusion, in the absence of other specific evidence of a violation, we could not find that the respondent had violated the Law.
Summarized by Lin, Ch'iu-miao
Supervised by Wu, Ting-hung
Appendix:
Pacific Construction Co., Ltd. Uniform Invoice No.: 11099009