Case:
The Taichung City Chinese Physician’s Association’s No.21-7 Director and Supervisor Joint Conference decided to raise the registration fee, which was a illegal concerted action sufficient to affect the market function of supply and demand for the Chinese medical services in Taichung City.
Key Words:
registration fee, physician’s association
Reference:
Fair Trade Commission Decision of February 24, 2005 (the 694th Commissioners’ Meeting); Disposition Kung Chu Tzu No. 094013
Industry:
Professional Associations (9422)
Relevant Laws:
Article 14 of the Fair Trade Law
Summary:
(1) According to the Department of Health, Executive Yuan, although registration fees are charged by medical institutions, they are not expenses occurring from medical treatments. Registration fees are actually administration expenses. They are not the medical care expenses as prescribed in Article 21 of the Medical Care Law. Therefore, although charging registration fees is within each medical care institution’s business discretion, if there is any violation of market trading order or fair competition, the Fair Trade Law shall still apply.
(2) In order to maintain the operating cost, medical care institutions may adequately decide to raise registration fees as their freedom of business. However, medical care institutions may not jointly decide to raise registration fees on an agreement basis. Additionally, associations of medical care institutions may not restrain the free market competition through constitutions or resolutions of members’ meetings, directors or supervisors’ meetings, or other means to constrain the members from setting the prices. Moreover, the Taichung City Chinese Physician’s Association claimed that the registration fee was adjusted in accordance with the “Charge Standard for the Chinese Medical Care Institutions in Taichung City” and that it was adjusted to prevent the competition of registration fees reduction by the clinics. According to the Department of Health of Taichung City, the registration fees and medical history administration fees stipulated in the aforesaid charge standard are merely for reference only and the registration fees may be decided by medical care institutions without the approval of the county (city) competent health authorities. Thus, the standard of “registration fees and medical history administration fees” stipulated in the “Charge Standard for the Chinese Medical Care Institutions in Taichung City” announced by the Taichung City Government on December 8, 1999 is a range provided for the individual medical care institution to deliberate upon the registration fees within the standard according to the condition of supply and demand in the entire medical care market and its own structure of cost. Medical care institutions shall not employ such a standard as the basis to jointly adjust registration fees. They shall also not exclude the application of the Fair Trade Law by claiming that the adjusted amount is still within the charge standard. Furthermore, whether to lower registration fees is within each medical care institution’s business discretion. No entity shall use the excuse of preventing the clinics from competing by lowering the registration fee to justify the resolution made to adjust the registration fees.
(3) Additionally, according to Article 9, Paragraph 1 of the Physician Law, “where a physician practices, he/she shall join the local physician’s association.” Therefore, all of the Chinese medicine physicians in Taichung City are the members of the Taichung City Chinese Physician’s Association. The Taichung City Chinese Physician’s Association issued a letter to its entire members to inform them to raise the registration fees. It was an act restricting the members’ business discretion and constraining the free will of 3 Chinese medicine hospitals and 322 Chinese medicine clinics to decide on the registration fees in Taichung City. Moreover, in the resolution of the Taichung City Chinese Physician’s Association, it was decided to raise the registration fees of the Chinese medicine clinics in Taichung City to NT$ 100 from January 1st 2005. The freedom of each medical care institution to decide on the amount of the registration fees was restrained, and therefore, the registration fees were identical. Thus, the public had fewer choices and the market competition was weakened. Such an act was sufficient to affect the market function of the Chinese medical care services in Taichung City. The Taichung City Chinese Physician’s Association claimed that it already issued a letter to inform the entire members of the cancellation of putting up the announcement on November 29, 2004 and that there was no concerted action commenced. However, such a cancellation occurred after the public filed the complaint on November 18, 2004 and after this Commission dispatched personnel to investigate on the following day. Also, the concerted action governed by the Fair Trade Law shall refer to the conduct of any enterprise, by means of contract, agreement or any other form of mutual understanding, with any other competing enterprise, to jointly determine the price of goods or services, or to limit the terms of quantity, technology, products, facilities, trading counterparts, or trading territory with respect to such goods and services, etc., and thereby to restrict each other's business activities, and such an action is sufficient to affect the market function of production, trade in goods, or supply and demand of services. Whether or not there is an actual concerted action implemented later on shall no affect the constitution of said concerted action.
(4) The action that the Taichung City Chinese Physician’s Association
decided to raise the registration fees by resolution falls under the scope
of concerted actions prescribed in Article 7 of the Fair Trade Law and is
in violation of Article 14 (1) of the Fair Trade Law. After considering
the motivation, purpose, and expected improper benefit of the unlawful act
of the Taichung City Chinese Physician’s Association, the degree and duration
of the act’s harm to trading order, benefits derived on account of the unlawful
act, business scale, operating condition, market position, situations of
past violations, remorse shown for the act and attitude of cooperation in
the investigation, and taking into account that the Taichung City Chinese
Physician’s Association has the leading position in the Chinese medical
care service market in Taichung City and that the harm of its unlawful action
to trading order is respectably critical, this Commission imposed an administrative
fine of NT$ 500,000 in accordance with the fore part of Article 41 of the
Fair Trade Law.
Summarized by Feng, Yu-Wei
Supervised by Lu, Li-Na
Appendix:
Taichung City Chinese Physician’s Association’s Uniform Invoice Number: 52465367