1. A private citizen complained to the FTC about Jie Shun Construction Ltd. (hereinafter referred to as Jie Shun Construction) and Quan Yue Advertising Co., Ltd. (hereinafter referred to as Quan Yue Advertising) engaging in false advertising by indicating on Floor Plan A and Floor Plan B and in the advertisements for the “An Jia MOrE+” housing project in Wanhua District of Taipei City that the B1 parking space could be used for other purposes while the mezzanine design in the model home was also inconsistent with the description in the building permit.
2. Findings of the FTC after investigation:
   1. Jie Shun Construction provided the capital and built the housing project in question and signed presale property agreements with consumers in its business name. On Aug. 1, 2013, the company signed an advertising and marketing contract with Quan Yue Advertising for the latter to be in charge of advertisement production and sales of the units of the housing project. However, on Floor Plan A and Floor Plan B and in the advertisements for the housing project, it was indicated “Investor and builder: An Jia International” while Floor Plan A also showed the wording of “An Jia International, a creative builder,” “An Jia International founded in 1988, having gone through good and bad times in the past 24 years…” and “It is our aspiration that every home we build will be a memorable beautiful construction in the contemporary era.” A list of works produced by An Jia International since 2004 was also provided. Another finding of the investigation revealed that Jie Shun Construction was founded in 2009 and An Jia International Enterprise Co., Ltd. (hereinafter referred to as An Jia International) in 1988. Among the 13 housing projects listed, only one housing project was built by Jie Shun Construction and two housing projects were by other companies. The other 10 housing projects were constructed by An Jia International.
   2. An Jia International and Jie Shun Construction shared their employees. When the housing project was marketed, An Jia International’s personnel were responsible for application of the company seal and contract signature. In the meantime, a description of the housing project was also posted on the website of An Jia International, carrying the text of “An Jia International has a firm grasp of the rare quality of the capital city and releases An Jia MOrE+ after the units of An Jia 2MOrE were sold out in no time.”
   3. Floor Plan A and the advertisements showed the wording of “a schematic 3D perspective of the second lobby for automobiles” and the wording of “B1 space like the guest reception hall on the ground floor…a multifunction communal space and the second lobby for automobiles.” However, according to the Taipei City Government, if the first basement level originally approved to be “air raid shelter and parking space” was turned into public facilities such as a “lobby” or a “multifunction room” after the housing project was completed, it would be inconsistent with the legal use of the building in violation of the Building Act.
   4. There was a mezzanine structure in the toilet area in the model home for the housing project. Clothes were hung and boxes were placed in the upper level and lighting was also provided to allow people to use the space. In addition, through the bedroom window, another mezzanine space with sofas, a small tea table and bookcases could be seen. Yet according to the Taipei City Government, the original drawings attached to the application for permission for installation of the model home showed no platform space above the toilet; therefore, the model home had to be considered an illegal structure. At the same time, the as-built drawings attached to the building permit and building use license also had no indication of any platform space. In other words, installation of mezzanine structures without permission after obtaining the building permit would be investigated and sanctioned according to law.
3. Grounds for disposition:
   1. Jie Shun Construction provided the capital and built the housing project, and commissioned Quan Yue Advertising to produce the advertisements and sell the units. Hence, both Jie Shun Construction and Quan Yue Advertising were considered the advertisers in this case and had to be held responsible for false advertising when the advertisements posted to market the housing project involved untruthfulness.
   2. As for the wording of “Investor and builder: An Jia International” shown on Floor Plan A and Floor Plan B and in the advertisements, the overall impression for consumers was the housing project was built by An Jia International. However, the investigation indicated that Jie Shun Construction, not An Jia International, provided the capital and built the housing project. The name of the construction company posted in the advertisements was inconsistent with reality; therefore, it was a false and misleading representation in violation of Paragraph 1 of Article 21 of the Fair Trade Law. Although An Jia International was not an advertiser in this case, according to Paragraph 1 of Article 14 of the Administrative Penalty Act, “Persons who act jointly and intentionally in the commission of an act in breach of duty under administrative law shall be punished separately depending upon the seriousness of the situation in which the act committed by each of them has resulted.” The investigation indicated that An Jia International did participated in marketing the housing project, was aware of its name being used for the housing project, and knowingly posted the advertisements in collaboration with Jie Shun Construction. The name of An Jia International was applied to advertise the housing project because the company had a better reputation and associations could be made with the better image of the company. The practice would definitely have a significant effect on the results of the false advertisements. An Jia International obviously played an important role in the false advertising and the participation could be considered an objective constituent element in the joint implementation of the false advertising with the advertisers. In other words, An Jia International intentionally worked with the advertisers to post the false advertisements carrying the false statement of “Investor and Builder: An Jia International.” Therefore, An Jia International also violated Paragraph 1 of Article 21 of the Fair Trade Law.
   3. The wording of “B1 space…a multifunction communal space and the second lobby for your automobiles” in Floor Plan A and the advertisements gave the impression that the first level in the basement could be used as a space for “multiple functions” and the “second lobby.” However, according to the Taipei City Government, the approved use of the first level in the basement was “air raid shelter and parking space” and could not be used for other public facilities. In other words, the indication in Floor Plan A and the advertisement that the first level of basement could be used for public facilities was inconsistent with reality and a false and misleading representation in violation of Paragraph 1 of Article 21 of the Fair Trade Law.
   4. As for the mezzanine design displayed in the model home, according to the Taipei City Government, the model home had not been set up in accordance with the original drawings approved. Hence, it was an illegal structure. In the meantime, the as-built drawings associated with the building permit and building use license did not include any platform space, either. If the mezzanine above the toilet was constructed after completion of the housing project, it would be in violation of building regulations. That meant the display in the model home to mislead consumer to believe a mezzanine structure could be installed was incompliant with the fact in violation of Paragraph 1 of Article 21 of the Fair Trade Law.
   5. As described above, the wording of “B1 space…a multifunction communal space and the second lobby for your automobiles” in Floor Plan A and the advertisements posted by Jie Shun Construction and Quan Yue Advertising for the housing project, the mezzanine design in the model home and the collaboration with An Jia International to indicate the latter as the investor and builder of the housing project were a false and misleading representation able to affect transaction decision in violation of Paragraph 1 of Article 21 of the Fair Trade Law. The FTC imposed an administrative fine of NT$1.8 million on Jie Shun Construction, NT$900,000 on Quan Yue Advertising and NT$600,000 on An Jia International in accordance with the first section of Article 42 of the Fair Trade Law.

Appendix:

Jie Shun Construction Ltd.’s Uniform Invoice Number: 29076675
Quan Yue Advertising Co., Ltd.’s Uniform Invoice Number: 53527833
An Jia International Co., Ltd.’s Uniform Invoice Number: 23009622

Summarized by: Chang, Wei-Chih; Supervised by: Chen, Jen-Ying