The Taipei High Administrative Court rendered the 106-Su-391 Decision of July 6, 2017 (hereinafter, the “Decision”), holding that even though an enterprise winning transaction opportunities through false advertising provides supplemental or corrective explanation to its trading counterparts, the liability for false advertising cannot be released.
According to the facts underlying this Decision, the Plaintiff constructed and sold a hotel in a land whose zoning classification indicates hotel use. However, its advertisement DM depicted layouts for ordinary residences for the reference of consumers. The advertising copy on its corporate website also indicated “light mansion.” General consumers could not determine if the hotel could be used as residences. The Defendant found as a result of its investigation that the Plaintiff had violated Article 21, Paragraph 1 of the Fair Trade Law (hereinafter, the “Law”) and imposed a fine of NT$800,000 on the Plaintiff via the original disposition. Dissatisfied, the Plaintiff brought this administrative action.
According to the Decision, the term “hotel residences” used in the Plaintiff’s advertisements was vague and general consumers could not determine if they could be used as residences. Therefore, the Plaintiff’s assertion that since the advertisements indicated “zoning: hotel” and “hotel residences,” the consumers should know that the construction project at issue could not be used as residences was not acceptable and were still false or misleading representations and constituted the false advertising under the Fair Trade Law.
It was further pointed out in this Decision that Article 21 of the Fair Trade Law seeks to prevent the general public from impairment to their rights and interests after they are misled into trading. The timing, targets and influences of negotiations or contracting before during transaction in the course of real estate transaction were different from advertisements. Therefore, an enterprise striving for trading opportunities by way of false advertising cannot be released from the liability for false advertising even if supplemental or corrective explanation is provided to the trading counterparts at the time of transaction. Based on the above reasons, the legality of the original disposition was upheld and the Plaintiff’s complaint was rejected.