Fong Yi Construction Co., Ltd.

Case:

Key Words:

Housing project advertisement, swimming pool, illegal construction

Reference:

Fair Trade Commission Decision of June 29, 2011 (the 1025th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 100110

Industry:

Real Estate Development (6700)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC received complaints from citizens that in the advertisements, including the one on Page A7 of the Apple Daily of March 27, 2010 (Sat.) and the one on Page A11 of the same newspaper of May 15, 2010 (Sat.), (together hereinafter referred to as the advertisements), for the company's "Ji Guang Bo Li" housing project (hereinafter referred to as the housing project), Fong Yi Construction Co., Ltd. (hereinafter referred to as Fong Yi Co.) claimed there would be a 25-meter outdoor heated swimming pool. However, as the company had registered the housing project as to be including open space, there would be no room for a swimming pool. The swimming pool had to be illegal construction if it appeared as claimed and this was not indicated in the advertisements. It was false and untrue advertising.
2. Findings of the FTC after investigation:
   As the financer and builder of the housing project, Fong Yi Co. admitted that although the advertisements had been contracted to Yi Yan Jiu Ding Advertising Planning Co., Ltd, and according to the contract, any information included in the advertisements needed approval by Fong Yi Co. before they could be finalized and posted because Fong Yi Co. was the person who pays for the advertising. It was also worded in the advertisements: "Fong Yi – www.fong-yi.com.tw – the entire project planned by the integrated professional team from Fong Yi Construction". Therefore, it was unquestionable that Fong Yi Co. had financed the advertisements to market its products, taking the responsibility of the advertisement production review, the approval procedure, and the payment for the expenses. The company was thus considered the advertiser.
3. Grounds for disposition:
   As the advertisements showed there would be a 25-meter outdoor heated swimming pool, consumers without thinking further would normally think that the swimming pool was a legal facility for the residents to use and make their transaction decisions accordingly. However, the reply from Hsinchu County Government to the FTC's inquiry indicated that according to the completion drawing for the housing project and the building base review report, the housing project did not include a 25-meter swimming pool. The item approved was a "lawn croquet field" and the building never applied for any change of use permit. Therefore, a swimming pool on the ground level would undoubtedly be illegal construction. Although Fong Yi Co. contended it had engineered in line with the advertisements and paid the expenses, advertising such a facility constructed in violation of building regulations to attract transactions could easily create misconceptions and wrong decisions among consumers. Moreover, the use of unlawful advertising to gain business was unfair competition practices to law-abiding competitors. Based on the above, the conduct of Fong Yi Co. was deemed a false, untrue, and misleading representation in violation of Article 21 of the Fair Trade Law. Acting in line with the first section of Article 41 of the same law, the FTC imposed an administrative fine of NT$600,000 on the company and also ordered it to immediately cease the act of false, untrue, and misleading representation.

Appendix:
Fong Yi Construction Co., Ltd.'sUniform Invoice Number: 89369020

Summarized by: Ho,Yen-Jung; Supervised by: Chen,Chun-Ting