Shi En Enterprise Co., Ltd. & United Giants Estate Marketing Group

1308th Commissioners' Meeting (2016)

Case:

Shi En Enterprises and United Giants violated the Fair Trade Law by adopting false advertising to market "Bai Nian Mu Le" housing project

Keyword(s):

False, misleading, false advertising
Reference:
Fair Trade Commission Decision of November 30, 2016 (the 1308th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 105129

Industry:

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

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

  1. On the floor plans for the "A1 2F" and "A1 3F" of the Bai Nian Mu Le" housing project (hereinafter referred to as the housing project in question) in Neihu District, Taipei City posted on the 591 property transaction website on Feb. 24, 2016, Shi En Enterprise Co., Ltd. (hereinafter referred to Shi En Enterprises) and United Giants Estate Marketing Group (hereinafter referred to as United Giants Estate) used dotted lines to mark the balconies as part of the interior. It was false advertising.
  2. Findings of the FTC after investigation:
    1. Shi En Enterprises and United Giants Estate were requested to present their statements and explanations at the FTC. Apparently, Shi En Enterprises built and sell the housing project in question but delegated United Giants Estate to be in charge of advertising and sale planning. United Giants Estate would then receive a certain percentage of the sale prices for its services and would also be allocated a cut of the sales profit. Therefore, both Shi En Enterprises and United Giants Estate were considered advertisers in this case.
    2. At the request of the FTC, the Taipei City Government provided its opinion and confirmed that the housing project in question included 4-story private buildings and the outward extension of the living room balconies as indicated on the floor plans was in violation of Article 5 of the "Taipei City Illegal Construction Handling Regulations".
  3. Grounds for disposition:
    1. In general, the structures depicted in real estate advertisements and the usages of the land they are on can be an important factor in consumers' decision on whether they would make purchases. When marketing the housing project in question on the 591 property transaction website, Shi En Enterprises and United Giants Estate used dotted line to mark the balconies as part of the interior on the floor plans for "A1 2F" and "A1 3F" units. The advertisement gave the public an overall impression that the space where the balconies should have been could be used as part of the interior as indicated. However, according to the Taipei City Government, the outward extension of the balconies as indicated on the floor plans for the housing project in question was in violation of Article 5 of the Taipei City Illegal Construction Handling Regulations". Moreover, Shi En Enterprises and United Giants Estate, when presenting their statements at the FTC, confessed that they had not applied to the building authority for permission to make the design changes. Hence, the representation provided by Shi En Enterprises and United Giants Estate in the advertisement was false and misleading. This could cause general or specific consumers to have erroneous perceptions or even make wrong decisions. It was in violation of Paragraph 1 of Article 21 of the Fair Trade Law.
    2. After assessing the motive behind the unlawful act, the level of harm, the seriousness of the violation, the business scales of the two companies and their attitudes after the violation, the FTC cited the first section of Article 42 of the Fair Trade Law and imposed an administrative fine of NT$700,000 on Shi En Enterprises and NT$450,000 on United Giants Estate.

Appendix:
Shi En Enterprise Co., Ltd.� Uniform Invoice Number: 80189912
United Giants Estate Marketing Group� Uniform Invoice Number: 54367692

Summarized by:Yang, Hsiang-Yu; Supervised by: Lai, Mei-Hua