Sheng Jun Construction & Xin Yue Advertising

1283rd Commissioners' Meeting (2016)

Case:

Sheng Jun Construction and Xin Yue violated the Fair Trade Law for posting false advertisements for the "OH! 1796" housing project

Keyword(s):

False and untrue, misleading, false advertising

Reference:

Fair Trade Commission Decision of June 8, 2016 (the 1283rd Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 105061

Industry:

Real Estate Development Activities (6700), Real Estate Agencies Activities (6812)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. Yilan County Government sent a letter to inform the FTC that Sheng Jun Construction Co., Ltd. (hereinafter referred to as Sheng Jun Construction) was building the "Oh! 1796" presale home project and the infinity pool marked on the layout for the rooftop garden was supposed to be just a rooftop terrace as indicated in the building permit. Since the company had never applied for approval to build a swimming pool there, false advertising was suspected.

2. Findings of the FTC after investigation:

   Sheng Jun Construction built the "Oh! 1796" project but the advertising and marketing for this project were delegated to Xin Yue Advertising Co., Ltd. (hereinafter referred to as Xin Yue Advertising). Xin Yue Advertising could get a percentage of the home prices for its service and also part of the share of the sale profits. Therefore, both Sheng Jun Construction and Xin Yue Advertising were considered advertisers in this case.

3. Grounds for disposition:

   (1)

   Sheng Jun Construction and Xin Yue Advertising marked an area on the rooftop garden layout for the use of an infinity pool and also had the picture of a swimming pool attached to it. However, as indicated in the building permit, the area had been approved to be used as a rooftop terrace only. If Sheng Jun Construction wanted to build a swimming pool, the company had to apply for a miscellaneous license. Otherwise, the facility would be considered as a violation of related regulations. Yet the company never applied for a miscellaneous license to build the swimming pool at issue and both Sheng Jun Constructed and Xin Yue Advertising admitted this was true. Besides, there were also the comments from Yilan County Government and drawings in the building permit to serve as evidences. As whether the housing project included a swimming pool could influence homebuyers' decision, the way the project was advertised was false, untrue and misleading in violation of Article 21(1) of the Fair Trade Law.

   (2)

   After assessing the motive behind the unlawful conduct, the level of harm incurred, the seriousness of the violation, the scale of each of the two companies and the attitude of the offenders, the FTC cited the first section of Article 42 of the Fair Trade Law and imposed an administrative fine of NT$800,000 on Sheng Jun Construction and NT$450,000 on Xin Yue Advertising.