Complaint against K'ang Hsuan Cultural Enterprise Co., Ltd. for sending warning letters to bookstores, and telephoning and sending representatives to advise them not to sell books by its competitor, in violation of Article 19 of the Fair Trade Law
Case:
Complaint against K'ang Hsuan Cultural Enterprise Co., Ltd. for sending warning letters to bookstores, and telephoning and sending representatives to advise them not to sell books by its competitor, in violation of Article 19 of the Fair Trade Law
Key Words:
Test booklets; evaluation, pirating; interruption of supplies
Reference:
Fair Trade Commission Decision of December 28, 2000 (the 477th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 009
Industry:
Book publishing industry (8330)
Relevant Laws:
Article 19(iii) of the Fair Trade Law
Summary:
1. Despite the fact that the test booklets published by Hsin Tian Tzu Publishing were designed by teachers with several years of teaching experience and were protected by copyright, textbook publisher K'ang Hsuan initiated a suit against Hsin Tian Tzu Publishing, alleging that its copyrights had been violated by publication of those test booklets. Moreover, through letters, phone calls, and personal visits by representatives, it demanded that bookstores not sell any publications by Hsin Tian Tzu, resulting in unfair competition and losses to Hsin Tian Tzu. 2. Investigation showed that in 1999, K'ang Hsuan had sent three warning letters to downstream bookstores, insinuating that Hsin Tian Tzu's publications were pirated publications and advising them not to distribute or sell Hsin Tian Tzu's publications on consignment. K'ang Hsuan also expressly invited the bookstores to join its distribution chain and demanded by phone calls or personal visits that they not sell Hsin Tian Tzu's publications. K'ang Hsuan further suggested that continued sales would result in interrupted supply of K'ang Hsuan's publications. As a result, most bookstores immediately took publications by Hsin Tian Tzu off their shelves or stopped selling them. 3. Prior to any decision by the courts on the disputed of copyright violations between the two companies, K'ang Hsuan had already in numerous occasions used improper means to poach trading counterparts from its competitors, which is condemnable under accepted business ethics. Further, with its dominant position in the textbook publishing market, K'ang Hsuan's conducts had the potential of impeding fair market competition and constituted a violation of Article 19(iii) of the Fair Trade Law. Pursuant to the forepart of Article 41 of the same law, it is ordered by the Fair Trade Commission to immediately cease the said conducts and to pay an administrative fine of NT$900,000. Appendix: K'ang Hsuan Cultural Enterprise Co., Ltd.'s Uniform Invoice Number: 23142092 Summarized by Chen Shu-Hwa; Supervised by Wu Te-sheng