Han-Shen Development Co. Ltd.

Case:

Key Words:

Gold Lion Award in Architecture, warranty, photo

Reference:

Fair Trade Commission Decision of June 21, 2007 (the 815th Commissioners' Meeting); Disposition (96) Kung Ch'u Tzu No. 096115

Industry:

Buildings Construction (4100)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. This case originated from complaint letters filed by the general public stating that: Han-Shen Development Co. Ltd. (hereinafter called "Han-Shen Company") had phrases, "Nation Gold Award Villa," "Vice President Lu warranted the quality," and the picture showing that Vice President Lu conferred the Gold Lion Award in Architecture in the construction advertisement on "Heirloom Castle." However, the finding of the investigation showed that the case of the construction work, "Heirloom Castle," had not participated in the competition of Gold Lion Award in Architecture, and in 2002 and 2003, Wei-Jing Construction Co. Ltd. won the Gold Lion Award in Architecture, which was conferred by Vice President Lu. Additionally, the picture on new and fully finished villa in the advertisement was not attributed to "Heirloom Castle" but the case of the construction work, "The Second Generation of Large European Villa."
2. Findings of FTC after investigation:
   1. It was found that, the phrase, "Nation Gold Award Villa, King of the Land in Neipu," the picture showing that Vice President Lu conferred the award (the phrase, "Vice President Lu personally conferred the Gold Lion Award in Architecture," appeared in the picture) and the declaration, "Vice President Lu warranted the quality" in the advertisement concerned were placed under the name of "Heirloom Castle." Its overall impression showed that this case of the construction work won the Gold Lion Award in Architecture, conferred by Vice President Lu personally, and it received confirmation and recommendation from Vice President Lu. The findings of the investigation however showed that this case of the construction work did not participate in the selection activity of Formosa Gold Lion Award in Architecture, and did not win the related awards. Furthermore, it was found that the advertisement concerned, which showed that Vice President Lu conferred the award, indeed referred to the fact that Vice President Lu conferred the award to Wei-Jing Construction Co. Ltd., and Vice President Lu did not give any warranty to this construction. Such a circumstance was not consistent with the representations of the abovementioned advertisement.
   2. It was further found that the impression conveyed by the advertisement concerned in which the picture on the exterior view of the buildings, with the phrases, "new and fully finished," and "Picture on Exterior View," were placed, was that the picture was attributed to "Heirloom Castle." Nevertheless, the findings of the investigation showed that the villa shown in the picture was attributed to "The Second Generation of Large European Villa," invested and constructed by Han-Shen Company, not "Heirloom Castle." Such a circumstance was sufficient to mislead people to believe that the villa in the picture was attributed to "Heirloom Castle." Therefore, the overall external representations of the advertisement misled the viewers.
3. Grounds for disposition:
1. As for Han-Shen Company published the phrases, "Nation Gold Award Villa," "Vice President Lu warranted the quality," the picture showing that Vice President Lu conferred the Gold Lion Award in Architecture and the picture on the external view of the villa in the construction advertisement, "Heirloom Castle," the representations of the quality and contents of the products were false, untrue and misleading. Therefore, Han-Shen Company violated Article 21(1) of the Fair Trade Law.
2. After considering the motive, purpose and anticipated improper profits of the unlawful acts of Han-Shen Company; the degree and duration of the unlawful acts' harm to market order; the benefits derived on account of the unlawful acts; the scale, operating condition and market position of the enterprise; the types and numbers of and intervals between past violations, and the punishment for such violations; the remorse shown for the acts and attitude of cooperation in the investigation; and other factors, Han-Shen Company was imposed with an administrative fine of NT$500,000 in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Han-Shen Development Co. Ltd.'s Uniform Invoice Number: 22793286