Dali Construction

1394th Commissioners' Meeting (2018)

Case:

Dali Construction, Quintyi Construction and Top Scene Advertising violated the Fair Trade Law in marketing the "Dali World Bay" housing project

Keyword(s):

False, misleading, false advertising

Reference:

Fair Trade Commission Decision on July 25, 2018 (the 1394th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 107058

Industry:

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

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. Dali Construction Co., Ltd. (hereinafter referred to as Dali Construction) and Quintyi Construction Co., Ltd. (hereinafter referred to as Quintyi Construction) jointly commissioned Top Scene Advertising Co., Ltd. (hereinafter referred to as Quintyi Advertising) to market the "Dali World Bay" housing project (hereinafter referred to as the housing project in question) located in Danshui District of New Taipei City. In January 2018, the FTC found out on the Internet that Top Scene Advertising posted on its website the text and pictures of "a gym in the sky one hundred meters above sea level, surrounded by hills and rivers and overlooking an endless natural landscape." The rooftop machine room was indicated as the space for the gym, a public facility. It was false advertising.
2. Findings of the FTC after investigation:
   (1)The FTC sent written requests to Dali Construction, Quintyi Construction and Top Scene Advertising, asking them to state their opinions and to offer their explanations about the advertisement at the FTC. The statements and explanations revealed that Dali Construction and Quintyi Construction built and marketed the housing project in question. At the same time, they commissioned Top Scene Advertising to be responsible for the advertising and to help them with the marketing. Top Scene Advertising could get a certain percentage of the sales for its services and get a cut of the sales surplus too. Therefore, Dali Construction, Quintyi Construction and Top Scene Advertising were all considered responsible for the advertising.
   (2) The FTC sent a written request for the opinion of the Public Works Department of New Taipei City Government. The reply indicated that the rooftop level of the housing project in question was not supposed to have a "gym in the sky." If a gym was built and used without acquiring the approval of the competent authority, it would be in violation of Paragraph 2 of Article 72 of the Building Act and the matter would be handled according to Article 91 of the same Law.
3. Grounds for disposition:
   (1)How buildings are used as described in advertisements is an important factor to take into consideration when homebuyers decide whether they will make their transactions on the houses they purchase. In June 2017, Top Scene Advertising began to post one after another advertisement that included the wording and pictures of "the open seas and sky?n front of me are my open seas and sky; I will not ask for more!" "a gem in the sky one hundred meters above sea level, surrounded by hills and rivers with an endless view!" and "a gym in the sky one hundred meters above sea level, surrounded by hills and rivers and overlooking an endless natural landscape." Overall, the contents of the advertisements were sufficient to mislead consumers to believe the "gym in the sky" could be legally used as advertised. However, according to the Public Works Department of New Taipei City Government, the rooftop level of the housing project in question was not supposed to have the "gym in the sky." If a gym was built and used without acquiring the approval of the competent authority, it would be in violation of Paragraph 2 of Article 72 of the Building Act and the matter would be handled according to Article 91 of the same act. In other words, the representation in the advertisements for the housing project in question was inconsistent with the reality. It was sufficient to cause the general public to have wrong perceptions about the content and use of the housing project or make wrong decisions. The conduct could give rise to the result that the competition mechanism in the market would not be functional and create unfair competition. It was in violation of Paragraph 1 of Article 21 of the Fair Trade Law.
   (2) After assessing the motive of Dali Construction, Quintyi Construction and Top Scene Advertising for engaging in the unlawful act, the level of harm they created, the seriousness of the violation, the business scale of the three companies and the their 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$400,000 on Dali Construction and NT$200,000 each on Quintyi Construction and Top Scene Advertising.