Yuan Shang Construction Co., Ltd. violated the Fair Trade Law for false advertising of the Golden Chicken Plaza Shih Lin Night Market project
Chinese Taipei
Case:
Yuan Shang Construction Co., Ltd. violated the Fair Trade Law for false advertising of the Golden Chicken Plaza Shih Lin Night Market project
Key Words:
gourmet court
Reference:
Fair Trade Commission Decision of August 20, 1997 (the 303rd Commission Meeting), Disposition (86) Kung Ch'u Tzu No. 133
Industry:
Real Estate Industry (6040)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. Complaints were filed against Yuan Shang Construction Co. (hereinafter, "YSC") for alleged false advertising of its construction project. The facts of such false advertising are as follows:
(1) YSC's advertisement states that the first floor of the basement (B1 F) is designed for Eatery Street, in fact a business license could not be obtained for operation of eateries there.
(2) The space allocation for vendors indicated on the advertised floor plan is inconsistent with the final construction drawings approved and released by the Bureau of Public Works of the Taipei City Government.
(3) The number of vendors that can be accommodated on B1 F is inconsistent with the number stated in advertisement.
(4) The advertisement indicates "Investment and Construction: Hsin Tung Yang- Sheng Yang Construction Co. Yuan Shang Construction Co., Ltd.," created a false impression.
(5) The "layout" provided in the Planning Description for Golden Chicken Plaza does not exist.
(6) The advertisement stating that "guaranteed lease of the space, which generates an annual 9% return, for three years will yield a combined 27% return," and that "98% of the B1F Gourmet Court was sold" were not true.
2. The Commission decides as follows:
(1) Regarding the inability to obtain the business registration permit for the "eatery business": Prior to amendment of the Regulation for Zoning Control of Land in Taipei City, the building had failed to satisfy requirements for establishment of eateries and restaurants. After the Regulation was amended, the building still could not be used for eateries. Therefore, YSC should have known that such building cannot be used for operation of restaurants at the time of advertising, and that its advertisement stating that B1 F is designed for Eatery Street was false and misleading.
(2) Regarding the inconsistency between partition of vendor space indicated in the advertised floor plan and the construction completion drawings: According to the Bureau of Public Works, the vendor space blocks the walkways indicated in the construction completion drawings, making the vendor space illegal. In addition, the vendor partition on the terrace is also an illegal construction. This thus constitutes a false advertising.
(3) Regarding the inconsistency between the vendor numbers on B1 F and the number stated in the advertisement: YSC knew the public facility ratio of the building at the design stage and could use such ratio to calculate the actual operating area for each vendor. However, the vendor space indicated in the advertisement is inadequate for operating use. Obviously, YSC intended to misled the consumer into purchasing its product by falsifying vendor space partitions. This thus constitutes false advertising.
Regarding the advertisement that misleads people into believing Hsin Tung Yang Co. [transliteration] as the investor and developer: The advertisement indicates "Investment and Construction": Hsin Tung Yang- Sheng Yang Construction Co. -Yuan Sheng Co., Ltd. In the advertisement, "Hsin Tung Yang" was put after "Investment and Construction," misleading the public into believing that Hsin Tung Yang is one of the developers of the project. Thus, YSC has committed an act in misleading the consumer.
(4) Regarding the false statement in the Planning Description for Golden Chicken Plaza: YSC does not deny that the Planning Description was distributed at the sales location and that operation of relevant businesses in the building did not follow those business planned in the Planning Description. The Planning Description is thus misleading, and YSC has failed to provide a reasonable explanation regarding the change of businesses to be operated in the building. Therefore, YSC has violated Article 21 of the Fair Trade Law. Regarding the false statement about the guaranteed lease period in the advertisement: The advertisement states that "guaranteed lease of the space, which generates an annual 9% return, for three years will yield a combined 27% return," is likely to convince the general consumer of the YSC's guarantee that units of the building so purchased will be leased for three years, with lucrative annual returns. However, YSC fails to provide such three-year guarantee on the pretext of collective management. Instead, YSC only guarantees two years and seven months for such lease. Such statement in the advertisement is obviously false and misleading, and violates Article 21 of the Fair Trade Law.
(5) Regarding the false statement that "98% of the B1F Gourmet Court was sold": YSC still owned about a quarter of the building when claiming in the advertisement that 98% of the B1F Gourmet Court was sold. This indicates an obvious attempt to induce the consumer to make the purchase by creating the impression of red-hot sales. YSC's false and misleading act violates Article 21, Paragraph 1 of the Fair Trade Law.
Summarized by Ch'en, Hsing-yi
Supervised by Wu, Tsuei-feng
Appendix:
Yuan Shang Construction Co.'s Business Administrative Number: 23032757
＠: For information of translation, click here
[Browse by APEC Member
Economies] [Browse by Subject Categories] [Home]
[Decisions] [Approvals] [Interpretations] [Administrative Guidance]