Taiwan Power Company improperly restricted the criteria to bid on its contract to procure truck-mounted mobile cranes, and Ying Heng, et al., fixed the bidding, in violation of the Fair Trade Law
Case:
Taiwan Power Company improperly restricted the criteria to bid on its contract to procure truck-mounted mobile cranes, and Ying Heng, et al., fixed the bidding, in violation of the Fair Trade Law
Key Words:
discriminatory treatment, concerted act, truck-mounted mobile crane, bid fixing
Reference:
Fair Trade Commission Decision of February 16, 2000 (432nd Commissioner's Meeting); Disposition (89) Kung Ch'u Tzu No. 026
Industry:
Electric Power Supply Industry (4100)
Relevant Laws:
Summary:
1. Crane suppliers complained that Taiwan Power Company, ("Taipower") set improper restrictions in the criteria to bid on its procurement contract of truck-mounted mobile cranes (#8700017). The restrictions required that submitted bids on the contract include truck retailer's after-sale service certificates and crane manufacturer authenticity certificates to prove that the suppliers were authorized vendors and able to provide after-sales service. They alleged that the restrictions would be likely to enable the truck manufacturers to dominate the market. The Fair Trade Commission's (the Commission's) preliminary finding was that six companies, including Ying Heng, were suspected of bid fixing. 2. Taipower procured 33 mobile cranes in April 1998, and by November of that year, it had procured a total of 80 units for a total procurement price of NT$200 million. Before the bid opening in April 1998, Fu Ch'uan, Ying Heng's long-time cooperative supplier, had already indicated the details of the future outcome of the bid opening on its progress board, and Ying Heng had already imported 26 of the cranes. Ying Heng was the organizer of the bid fixing. He T'ai and Shun Yi controlled the truck chassis after-sales service certificates and truck chassis functional test reports. He T'ai and Shun Yi turned down requests for the certificates and reports from suppliers who were not a party to the bid fixing, so as to hoard the profits from the sales of the truck chassis. In addition, a winning bid for six cranes was apportioned to Hsi Fu. Ying Heng provided catalogs of truck chassis, the manufacturer of which it used to be an agent for, to Ching Ch'i and Hao Ch'eng, for their use in participating in the bid fixing. 3. Ying Heng, Hsi Fu, Hao Ch'eng, Ching Ch'i, He T'ai, and Shun Yi fixed the bidding for the contract. They knowingly, and through mutual communications, apportioned the number, suppliers, and amounts of the winning bids before the bid opening. These acts violated Article 14 of the FTL, which prohibits concerted acts. The Commission ordered them to immediately cease the concerted acts pursuant to the forepart of Article 41 of the FTL in force at the time of the acts. 4. The improper restrictions precluded suppliers, who could not obtain the certificates and the reports, from participating in the bidding, and they enabled the truck manufacturers and some of the crane suppliers to restrict and apportion the participants and the winners of the bidding by virtue of their control over the certificates and the reports. This was likely to compromise free market mechanisms, and it constituted obstruction of fair competition in violation of Article 19(1)(ii) of the FTL. Therefore, the Commission ordered Taipower to immediately cease its act of discriminating against other enterprises without a proper reason, pursuant to the forepart of Article 41 of the FTL in force when the act took place. Appendix: Taiwan Power Company's Uniform Invoice Number: 03795904 Summarized by Huang Ch'ung-chieh; Supervised by Tso T'ien-liang