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:

  1. 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.

  2. 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


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