Rihua LPG Bottling Co., Ltd.

Case:

Key Words:

LPG bottling business, concerted price increase, fine imposition

Reference:

Taipei Supreme Administrative Court Judgment (99) Pan Tzu No. 1343

Industry:

Wholesale of Other fuel Products (4639)

Relevant Laws:

Article 14 of the Fair Trade Law

Summary:

1. The Fair Trade Commission (the FTC), the appellee, investigated the suspected concerted action and boycott of the LPG bottling businesses in northern part. The findings showed that Rihua LPG Bottling Co., Ltd. (the appellant) and 29 other LPG bottling businesses had reached an agreement through the Taipei County LPG Association and Taoyuan County LPG Association to jointly increase LPG bottling and transportation costs, and even set up a joint bank account. They had also agreed to restrict the trading counterparts of each LPG shop and not to compete with one another. The conduct was in violation of Article 14 of the Fair Trade Law (FTL) and the FTC therefore imposed dispositions on the appellant and the parties involved in accordance with the First Section of Article 41 of the same law. The appellant found the disposition unacceptable and filed an administrative litigation appeal. The first ruling as stated in the original 2004 Su-Zi No. 1307 Judgment revoked the fines imposed but overruled the rest of the appeal. The plaintiff was responsible to pay for two thirds of the litigation charges and the defendant, the appellee, the remaining third. Both parties found the decision unacceptable and appealed. The Supreme Administrative Court adjudicated, as stated in the 2007 Pan-Zi No. 1617 Judgment, that the revocation, the original fines and the decision regarding the litigation charges shall be discarded and the case to be remanded to the original court while at the same time overruled the rest of the appeals. The appellant (excluding the FTC) was responsible to pay for the litigation appeal charges. After further deliberation, the original court decided, as stated in the 2007 Su-Geng-Yi-Zi No. 174 Judgment, that"the appeal of the plaintiff is overruled and the plaintiff is responsible to pay for all litigation charges for the first instance and the appeal." The appellant found the decision unacceptable and filed another appeal.
2. According to Article 41 of the FTL when the above agreement was reached, the FTC may order any enterprise that violates any of the provisions of this Law to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order. In addition, it may assess upon such enterprise an administrative penalty of not less than fifty thousand or more than twenty-five million New Taiwan Dollars. Furthermore, Article 36 of the Enforcement Rules to the FTL stipulates that"when assessing fines in accordance with the Law, all circumstances shall be taken into consideration, and the following items shall be noted:
   1. Motivation, purpose, and expected improper benefit of the acts; The degree of the act's harm to market order;
   2. The duration of the act's harm to market order;
   3. Benefits derived on account of the unlawful act;
   4. Scale, operating condition, and market position of the enterprise;
   5. Whether or not the type of unlawful act involved in the violation has been the subject of correction or warning by the Central Competent Authority;
   6. Types of, number of, and intervening time between past violations, and the punishment for such violations; and
   7. Remorse shown for the act and attitude of cooperation in the investigation."

When exercising their administrative discretion in accordance with the authority conferred by law, government agencies have the obligation to be fair and just with each case in compliance with the objective and scope of their regulatory authority conferred by law. At the same time, the principle of equality for administrative agencies must also be exercised within the bounds of the law. It is understandable that the appellee in this case pursued fair and reasonable dispositions and administrative fines. Further, the dispositions and administrative fines had been handed out in accordance with the Reference Table for the Amount of Sanction and Fine Imposed established in pursuance to the principle prescribed in Article 36 of the Enforcement Rules to the FTL. They not only did justice in this very case but also met the principle of equality in compliance with the law and had no conflicts at all with the objective of the FTC's authority conferred by law.

3. After determining the dispositions for the said 30 businesses in line with the Reference Table for the Amount of Sanction and Fine Imposed, the appellee also held a commission meeting and adjusted the fines in accordance with related factors, the aforesaid conditions, the impact of the action on the society and economy, the characteristics of the product and service involved, deterrence of similar illegal conduct in the future, the severity of unfair competition and competition restriction, as well as the bottling capacity and length of operation of each business. In other words, the original dispositions had been decided in accordance with the considerations and factors stipulated in Article 36 of the Enforcement Rules to the FTL as to be taken into account and met the criteria prescribed in the Reference Table for the Amount and Sanction Imposed. The grounds for the dispositions and the corresponding criteria had also been given in detail and there was no violation against the principle of equality. The claim of the appellant that the appellee had reached the dispositions by adopting a different set of criteria was absolutely groundless. The appellant's accusation of the appellee's original decision as inappropriate had to be discarded. The reasons presented by the appellant were found unacceptable and the appeal was overruled.

Appendix:
Rihua LPG Bottling Co., Ltd.'s Uniform Invoice Number: 43632370

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