Local real estate agencies to pay TWD3 million damages for causing reputational harm to competitor and violation of Fair Trade Act

　Local real estate agency, Sinyi Realty Inc. (hereinafter “Sinyi”) alleged that Yung Ching Rehouse Co. (hereinafter “Yung Ching”) had been spreading negative news about it through Housefun platform, run by HouseStore Inc. (hereinafter “HouseStore”) frequently and massively for a long period of time, and thereby caused reputational damages to Sinyi.  According to Sinyi, the articles and videos on Housefun platform and on Housefun Youtube channel were published with the titles including such extreme, provocative, and sensational wordings as “fraudulent” and “malevolent”, and more and also with the hashtags reading “#Trust leads to being defrauded?!”, “#Housing Fraudulence”, “#Malevolent real estate agent”, “#Dishonest Sinyi”, etc..  In addition, Yung Ching had made the Youtube thumbnails that would form viewers’ unfavorable views of Sinyi and written false videos summaries and also used pay-per-click advertising.  Against all of the aforesaid doings, Sinyi filed a lawsuit against Yung Ching and HouseStore.  

　The aforesaid dispute was brought to the Taipei District Court, which handed down the first-instance decision on this case on July 19, 2023 that based on their mutual close relationship, HouseStore and Yung Ching has caused reputational damages to Sinyi by publishing negative news regarding Sinyi through news reporting and advertising, for which Yung Ching and HouseStore should pay TWD3 million to Sinyi.  Moreover, HouseStore and Yung Ching should also remove all unfavorable news of Sinyi and have the main text of this judgment published in newspapers and should never buy any keywords containing the four Chinese characters, “信義房屋” (meaning “Sinyi realty”) for advertising.  

　The judgment also pointed out that freedom of the press involves public interest and should be maintained with maximum protection.  If news media covers any news without verification or insists on covering the news even in spite of the suspicion about the authenticity and accuracy of the news, and thereby causes the inconsistency between the news reported and the facts and further result in harm to any other person’s reputation, the media should be held liable for damages caused thereby.  

　Furthermore, with respect to HouseStore and Yung Ching’s keyword advertising that simultaneously or separately presented the news unfavorable to Sinyi or implied Sinyi’s dishonesty and unscrupulousness, which would cause the potential customers who had read news articles about Sinyi to more frequently receive the unfavorable news published by the Housefun, the court gave the following holding that such an act of HouseStore and Yung Ching “is likely to cause Sinyi’s loss of its potential customers and hence to constitute the deceitful or obviously unfair conduct” as defined by Article 25 of the Fair Trade Act.  The court also held that HouseStore and Yung Ching directed the advertising at Sinyi’s potential trading counterparts to cause harm to Sinyi’s business reputation and deprive Sinyi of the opportunity of fair trade; if such advertising misleads consumers, it is groundless to regard such advertising as one protected by the freedom of speech.  Based on the foregoing holdings, the court determined that HouseStore and Yung Ching shall not or make others purchase the keywords of “信義房屋” for advertising.  

　Besides, the Taipei District Court also pointed out the close relationship between HouseStore and Yung Ching, elucidating in the judgment that the legal representative of HouseStore, LIN Shu-Zhen (hereinafter “Lin”), is also Yung Ching’s legal representative and the wife of SUN Qing-Yu (hereinafter “Sun”), the founder of Yung Ching, and that Yung Ching’s equities are mostly held by several legal entities, whose legal representatives are either Sun or Lin, which makes it apparent that Sun and Lin have been substantially controlling Yung Ching.  As Yung Ching and Sinyi are competitors in the same trade, HouseStore’s act has also violated Article 24 of the Fair Trade Act.  (Released 2023.09.07) 
/CCS