Yi Mao Construction

1321st Commissioners' Meeting (2017)

Case:

Yi Mao Construction violated the Fair Trade Law by posting false advertisements for the "Min Sheng Wan Ji" housing project

Keyword(s):

False, misleading, false advertising

Reference:

Fair Trade Commission Decision of March 1, 2017 (the 1321st Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 106011

Industry:

Real Estate Development Activities (6700)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC received from a private citizen a complaint about Yi Mao Construction Co., Ltd. (hereinafter referred to as Yi Mao Construction) indicating the balconies as part of the bedrooms on the A3 unit layout shown at the reception center of the "Min Sheng Wan Ji " housing project in West Central District of Tainan City the company was marketing. False advertising was suspected.
2. Findings of the FTC after investigation:
   The FTC sent staff members to investigate at the site of the "Min Sheng Wan Ji" housing project and confirmed the layout was inconsistent with the original design indicated in the building license and use permit. Since Yi Mao Construction invested the capital needed to build, marketed the housing project and also put in the money to produce and distribute the flyers, the company was the advertiser in this case.
3. Grounds for disposition:
   (1) On the layout in question displayed both on TV and flyers distributed at the reception center, the balconies were marked with dotted lines as part of the interior space. Overall, the advertisement made consumers think the space where the balconies should have been could be used legally as suggested on the layout. Yi Mao Construction expressed there was no more floor area to allow any change of design in the housing project. The company admitted it was illegal use of space if changes were made as indicated in the advertisement. In addition, the reply from the Tainan City Government and the drawings attached to the use permit could prove the conduct as unlawful. Since whether the balcony space could be legally used as part of the interior was a decisive factor when consumers decided whether they would make their purchases, the advertisement posted by Yi Mao Construction was therefore considered a false and misleading representation in violation of Article 21(1) 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 scale of the company, and the company's attitude after the violation, the FTC cited the first section of Article 42 of the Fair Trade Law and imposed an administrative fine of NT$800,000 on Yi Mao Construction.