FarGlory Land Development Co., Ltd

Case:

Key Words:

television advertising, false and untrue, FarGlory's 40th anniversary

Reference:

Taipei Supreme Administrative Court (2011) Judgment Pan-Tzu No. 1978

Industry:

Real Estate Agency (4639)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. In the effort to promote a construction project, the appellant, FarGlory Land Development Co., Ltd., claimed on its website, newspaper and television advertisements: "Only FarGlory could sustain 40 years," further using such terminology as "40 years of FarGlory" in a television advertisement. Upon review, the Fair Trade Commission (FTC) found the contents of the advertisement in question to be false and misleading, in violation of Article 21 paragraph 1 of the Fair Trade Act, and pursuant to the terms section 1 of Article 41 of the Act, the appellant was ordered in Penalty Notice No. 099034 of 17 March 2010 to immediately cease the unlawful conduct within a day upon receipt of the notice, and to pay a fine of NT$500,000. The appellant declined to accept the ruling, and lodged an appeal and administrative litigation. After both of which were rejected, the appellant initiated this appeal.
2. Article 21 subparagraph 1 of the Fair Trade Law states: "No enterprise shall make or use false or misleading representations or symbol as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, or place of processing on goods or in advertisements, or in any other way making known to the public." Quality of merchandise refers to subjects of transactions having economic value, and other related transaction items not directly related to a subject of transaction having promotional impact, including the identity, qualifications, and state of operation of an enterprise. Consequently, any enterprise making false or misleading representations regarding the transaction subject or other related items through advertising or other means of public statement, shall be deemed in violation of the above-mentioned regulations. The duration of the enterprise's existence has bearing upon the enterprise's past efforts toward the quality of its commodities, enhancement of services and image for reasonable prices. The duration of its existence is a factor influencing the reasonable judgment of trading counterparts regarding the quality of the merchandise it offers for sale, to the extent that it can impact decisions on whether or not to engage in transactions. Consequently, any enterprise making representations regarding the duration of its existence should be factually presented, not false and misleading. Items 5, 6, 7, 8, and 9 of the Fair Trade Commission Disposal Directions (Guidelines) on Handling Cases. Governed by Article 21 of the Fair Trade Law provide explicit principles for determining what constitutes false or misleading representations.
3. The appellant in this case, in the effort to market a FarGlory Land Development construction project, made such statements on the Internet, newspapers, and television advertisements that "only FarGlory could sustain 40 years" and "40 years of FarGlory." However, these representations were made without factual basis, thereby causing erroneous perceptions regarding the quality and duration of the enterprise's goods among trading counterparts, constituting false, untrue, and misleading representations regarding the quality of its goods. Having detailed the outcome of debate on the facts of the investigation in the original case, and detailed the findings in the verdict, it was determined that the appellant violated Article 21 subparagraph 1 of the Fair Trade Law. Review of the methodology of the case found the theoretical and empirical bases for the judgment consistent, and no such unlawful conduct as unjustified ruling or inappropriate citing of laws. The appeal, which sought the dismissal of the decision and overruling of this portion of the appellant's original case, was found groundless and dismissed accordingly.

Appendix:
FarGlory Land Development Co., Ltd.'s Uniform Invoice Number: 23605591

Summarized by: Lai Chia-Ching ; Supervised by: Lee Wen-Show