Fu Li Di Construction

1335th Commissioners' Meeting (2017)

Case:

Fu Li Di Construction violated the Fair Trade Law by posting false advertising for the "Fu Li Di-Queen's Secret" housing project

Keyword(s):

Agricultural land, authorized sales agent, housing project, false advertising

Reference:

Fair Trade Commission Decision of June 7, 2017 (the 1335th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 106041

Industry:

Real Estate Development Activities (6700)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The site of the "Fu Li Di-Queen's Secret" housing project (hereinafter referred to as the housing project) that Fu Li Di Construction Co., Ltd. (hereinafter referred to Fu Li Di Construction) was building and marketing was located in an agricultural zone of an urban planning area and non-urban Type A construction land. However, in the "surrounding environment schematic," "building spread schematic" and "B Zone layout" (together hereinafter referred to as the advertisement), the adjacent area of agricultural land was indicated as to include a landscape garden, a pond, community roads, parking space, etc. It was inconsistent with the usage of normal agricultural use. Therefore, false advertising was suspected.
2. Findings of the FTC after investigation:
   (1) The housing project was built by Fu Li Di Construction and the company was also the agent authorized by the landowners to sell the adjacent agricultural land and farmhouses. According to the sales agent agreement signed between both parties, Fu Li Di Construction was responsible for the advertising design and expenses but would collect 5% of the amount of sales for its service.
   (2) In the advertisement the agricultural land was indicated as to include a landscape garden, a pond, community roads, parking space, etc. However, according to the Yilan County Government, the area to include the landscape garden, pond, community roads, parking space, etc. had been defined as non-urban land for agricultural purposes whereas the area for the B Zone parking space and community roads had been defined as agricultural land under urban planning. Use of such land for nonagricultural purposes would be in violation of Article 69 of the Agricultural Development Act and could be sanctioned in accordance with Article 21 of the Regional Plan Act.
3. Grounds for disposition:
   (1) The advertisement was produced by an advertising company after Fu Li Di Construction consolidated the advertisement for its own housing project and the advertisement for the agricultural land and newly built farmhouses the company was authorized by the landowners to sell. It was reviewed, finalized and used by Fu Li Di Construction. It is also Fu Li Di Construction who paid for the cost and posted the advertisement. The company decided and supervised the matters with regard to the advertisement. Therefore, Fu Li Di Construction was the advertiser.
   (2) The housing project was located in the non-urban land for agricultural purposes and agricultural land under urban planning. The consolidation of the "surrounding environment schematic," "building spread schematic" and "B Zone layout" with the images of "the landscape garden, pond, community roads and parking space" was inconsistent with the facts revealed in this case. The difference was too great for the general public to accept and could cause the general public to have wrong perceptions and decisions. It was therefore a false and misleading representation in violation of Article 21 (1) of the Fair Trade Law. After assessing Fu Li Di Construction's motive for the unlawful act, the level of harm caused to the trading order on the marketplace, the duration, the business scale, management condition and market status of the company, past violations and cooperativeness throughout the investigation, the FTC cited the first section of Article 42 of the Fair Trade Law and imposed an administrative fine of NT$400,000 on the company.