Concerted action by liquefied petroleum
gas distributors in the Tamshui area in violation of the Fair Trade Law
Chinese Taipei
Case:
Concerted action by liquefied petroleum gas distributors in the Tamshui area
in violation of the Fair Trade Law
Key Words:
concerted action, cylinder liquefied petroleum gas
Reference:
Fair Trade Commission Decision of May 3, 2000 Decision (the 443rd Commissioners'
Meeting); Disposition (89) Kung Chu Tzu No. 075
Industry:
Gas Fuel Distribution Industry (4200)
Relevant Laws:
Articles 7
and 14
of the Fair Trade Law
Summary:
- This case originated from a complaint by a resident from Tamshui that cylinder
liquefied petroleum gas (hereinafter referred to as LPG) distributors in this
area were acting in concert to increase its price. During the period of the
investigation, numerous other citizens and small restaurant operators in the
Tamshui area also complained that cylinder LPG distributors were raising prices
to the same level. An LPG distribution center had been established in Tamshui
around 1991 with the participation of 12 companies, including the Tamshui,
Lien Fu, Chiah-chiah Huan, Ch'uan Lung, Chung Hsin, He Yi, Tsung Gao, Chin
Ch'uan, Kung Cheng, Jen Teh He, Hsin Li and Hsing Jen companies. The Tamshui
area also had three companies that did not participate in the center, which
were Hsin He, Wan Ch'in, and Shih Hsin. The investigation revealed that the
distribution center and their three competitors met at the Tamchiang Restaurant
in Tamshui in April of 1999 and reached an agreement that they would not compete
for customers on prices. They also agreed that they would jointly raise prices
in response to the next quoted prices increase by the Chinese Petroleum Corporation
to the level set by the former LPG section of the Vocational Assistance Commission
for Retired Servicemen (NT$520 for a 20 kilogram bottle). On May 12, the Chinese
Petroleum Corporation adjusted its quoted prices, and the 15 LPG distributors
raised theirs that same day according to their previous agreement. All distributors
uniformly raised the price for 20-kilogram home-use cylinder LPG from NT$470
to NT$520 and 20-kilogram business-use bottle from NT$450 to NT$500.
- The 15 distributors in this case are competitors whose attempt to reap
profits created not from the normal function of market supply and demand has
impede the formation of the price for cylinder LPG in the Tamshui area, and
causally has the effect of restricting competition in the relevant markets.
This had constituted concerted action prohibited under Article 14 of the Fair
Trade Law. Pursuant to the forepart of Article 41 of the same law, those companies
were ordered to immediately cease their concerted action. Further, in order
to deter similar violations and restore market order and after taking into
consideration of the facts that they were first-time offender and small-scale
operators whose business depends heavily on physical labor and, therefore,
the violation had brought them only small returns, a fine of NT$ 100,000 was
imposed on each distributor pursuant to the same section of Article 41.
Appendix:
Tamshui Coal Gas Co., Ltd.'s Uniform Invoice Number: 37116600
Lien Fu Coal Gas Co., Ltd.'s Uniform Invoice Number: 37211604
Chiah-chiah Huan Coal Gas Co., Ltd.'s Uniform Invoice Number: 37102943
Ch'uan Lung Coal Gas Co., Ltd.'s Uniform Invoice Number: 33777349
Chung Hsin Coal Gas Co., Ltd.'s Uniform Invoice Number: 22497659
He Yi Coal Gas Co., Ltd.'s Uniform Invoice Number: 37032659
Tsung Gao Coal Gas Co., Ltd.'s Uniform Invoice Number: 37056573
Chin Ch'uan Coal Gas Co., Ltd.'s Uniform Invoice Number: 37201628
Hsin He Coal Gas Co., Ltd.'s Uniform Invoice Number: 37092109
Shih Hsin Coal Gas Co., Ltd's Uniform Invoice Number: 16207626
Kung Cheng Coal Gas Co.'s Uniform Invoice Number: BD026465
Tamshui Jen Teh He Coal Gas Co.'s Uniform Invoice Number: 37112554
Hsin Li Coal Gas Co.'s Uniform Invoice Number: 35431997
Hsing Jen Coal Gas Co.'s Uniform Invoice Number: 33750355
Wan Ch'in Kitchen Appliances's Uniform Invoice Number: 19875208
Summarized by Huang Ch'ung-chieh
Supervised by Tsuo Tien-liang
**:
For information of translation, click here