Supplemental application for approval of concerted action filed by Sumitomo Electric Ind., Ltd. based on prior approval
Chinese Taipei
Case:
Supplemental application for approval of concerted action filed by Sumitomo Electric Ind., Ltd. based on prior approval
Key Words:
concerted action, approval, high-voltage power connection equipment
Reference:
Fair Trade Commission Decision of September 16, 1998 (358th Commission Meeting); Decision (87) Kung Lien Tzu No. 016
Industry:
Wire and Cable Production Industry (3112)
Relevant Laws:
Article 14(2) of the Fair Trade Law
Summary:
Nine local enterprises including Dah San Electric Wire & Cable Corp. considered to invite foreign enterprises to establish a joint venture to develop and produce "high-voltage power connection equipment," a key component in constructing power cable systems and the local supplies of which have long been controlled by foreign enterprises. Furthermore, in order to secure fairer cooperative terms from foreign partners and to facilitate subsequent negotiations on technical cooperation, the nine local enterprises applied to the Fair Trade Commission (FTC) for approval of their concerted action. Since local enterprises currently lack the ability to produce the said key component, its joint development, production, distribution and importation by these nine enterprises meets the definition of concerted action under Article 14(2) of the Fair Trade Law (FTL) which refers to "jointly research and develop goods or market in order to upgrade technical skills." The FTC's 225th Commission Meeting approved their concerted action for a period of three years (Decision of February 15, 1996, Disposition Ref. (85) Kung Lien Tzu No. 001). As the foreign partner was yet to be selected, the FTC was unable to evaluate the market impact associated with the introduction of the technology or whether the agreement(s) on technical cooperation would restrict the competition or involve unfair competition. For the said reason, a condition was added to paragraph 2 of the approval, which stated: "The selected foreign partner shall file a supplementary application for approval of concerted action in accordance with the Fair Trade Law." Accordingly, Sumitomo Electrical Ind., Ltd., i.e. the selected partner, filed a supplemental application on April 3 1998 for the approval of its joining the concerted action of the nine local enterprises based on the added condition in the aforesaid approval by the FTC.
Decisions of the FTC
2 (1) The approved part of the application:
Based on the following findings, the FTC approved the part of the application regarding the joint "production, sales, and importation of 69kV to 161kV power connection equipment" according to FTL Article 14.
(1) The development of the said key component was a technology that local enterprises have been attempting to apprehend. The grasp of the technology will greatly upgrade the technical skills in local wire and cable industry, resolve the problem of continuously relying on foreign supplies, and is necessary for local enterprises to enter the international market for power cable engineering. It will benefit the related industries at all levels;
(2) The process of establishing the new enterprise under the joint venture was open to the public. No specific enterprise has been excluded from participation.
The new enterprise will not discriminate against non-participating enterprises on terms such as price or quantity of the sold product. The concerted action will not substantially restrict competition if approved.
2 (2) The denied part of the application
The part of "joint importation of high-voltage power connection equipment" in the application may involve the act of "concerted purchasing" and is not relevant to the action of joint development. It is denied accordingly.
Summarized by Lin, Ching-Tang
Superviced by Yu, Su-Su
Appendix:
Dah San Electric Wire & Cable Corp. Uniform Invoice No.: 64829434
Tatung Co. Uniform Invoice No.: 11026506
Ta Tun Electric Wire & Cable Co., Ltd. Uniform Invoice No.: 18523000
Ta Ya Electric Wire & Cable Co., Ltd. Uniform Invoice No.: 68035907
Pacific Electric Wire & Cable Co., Ltd. Uniform Invoice No.: 03064800
Tai-I Electric Wire & Cable Co., Ltd. Uniform Invoice No.: 34284000
Hong Tai Electric Wire & Cable Co., Ltd. Uniform Invoice No.: 43125162
Walsin Lihwa Corp. Uniform Invoice No.: 35412204
Hwaeng Wire & Cable Co., Ltd. Uniform Invoice No.: 79460007