Shun Sheng Construction Co., Ltd. and 20 other enterprises boycott Taipei Water Department and the construction tender of its construction corps in violation of the Fair Trade Law
Case:
Shun Sheng Construction Co., Ltd. and 20 other enterprises boycott Taipei Water Department and the construction tender of its construction corps in violation of the Fair Trade Law
Key Words:
agreement at a meeting, boycott participation in tender, on-site supervision, abortion of bidding
Reference:
Fair Trade Commission Decision of October 4, 2001 (the 517th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 167
Industry:
Pipeline Construction Industry (4002)
Relevant Law:
Article 14 of the Fair Trade Law
Summary:
1. This case originated with a letter from the construction corps of the Taipei Water Department in relation to the public tender for "Improvement in distribution pipes for alleys 23 and 59 of Nanjing East Road, Section 5," requesting an interpretation from the Commission regarding whether participants in that bid tender had violated the Fair Trade Law. Through hearings on the case it was found that 21 companies normally participating in Taipei Water Department construction project tenders (including Shun Sheng Construction Co., Ltd. 【hereinafter refer to Shun Sheng Corporation】, Li Peng Construction Co., Ltd., Yu Li Construction Co., Ltd., Chin Tao Enterprise Construction Co., Ltd., Ming Chuan Plumbing and Electrical Construction Co., Ltd., Sheng Chuan Construction Co., Ltd., Hsin Tung Construction Technology Consulting Co., Ltd., Li Cheng Construction Co., Ltd., Chieh Yi Construction Co., Ltd., Fei Lung Plumbing and Electrical Co., Ltd., Chi Teh Plumbing and Electrical Enterprise Co., Ltd., Lien Hsin Plumbing and Electrical Construction Co., Ltd., Chin Yuan Construction Co., Ltd., Hsiang Tai Plumbing and Electrical Co., Ltd., Hua Hung Construction Co., Ltd., Ching Chiu Enterprise Co., Ltd., Chun Yuan Construction Co., Ltd., Ho Hsing Plumbing and Electrical Construction Co., Ltd., Ta Teh Construction, Chia Yi Plumbing and Electrical Construction Co., Ltd., and Chun Sheng Plumbing and Electrical Construction) allegedly attended meeting held on 13 May 1999, where agreement was reached to jointly boycott such tenders in violation of the Fair Trade Law; the Commission immediately initiated an investigation into the case.2. The Fair Trade Commission's investigation showed that enterprises were unwilling to participate in open tenders for construction projects held under the aegis of the construction corps of the Taipei Water Department due to longstanding problems with reasonable standards for waste soil vouchers, unit pricing, and setting of the total construction base price. Tenders for a number of projects thus had to be aborted after 1998, with the most severe case occurring in 1999. In order to try to resolve these problems, Shun Sheng Corporation and the 20 other companies frequently participating in projects tendered by the Taipei Water Department or its construction corps met on 13 May 1999 at the Water Pipe Association's Taipei office to convene a meeting on "Assisting the Taipei Water Department in Expanding Internal Demand for Construction Contractors." The meeting produced a consensus on boycotting future tenders until the Water Department resolved the issues surrounding waste soil vouchers and unit pricing.3. In their meeting of 13 May 1999, Shun Sheng Corporation and the 20 other companies reached a consensus on boycotting further Taipei Water Department tenders until it resolved problems in areas such as waste soil vouchers and unit prices in order to force the Water Department to raise unit prices for construction items. Reaching agreement to mutually restrict each other's activities in participating in bidding produced a substantive effect of limiting competition in the relevant markets. This conduct was found to be reprehensible and in violation of Article 14 of the Fair Trade Law regarding prohibition of concerted action. The above conduct occurred after the partial amendment to the Fair Trade Law on 5 February 1999 but prior to the implementation of the Government Procurement Law on 27 May 1999; the Fair Trade Commission considered various factors such as the companies' motives, unlawful conduct, the degree and duration of injury to the market order. In order to discourage repetition of their conduct and to restore market order, the Fair Trade Commission issued a disposition pursuant to the fore part of Article 41 of the same law, ordering them to immediately cease their unlawful conduct, and imposing administrative fines of NT$100,000 each against Shun Sheng Corporation and the 20 other companies for their concerted action in boycotting project tenders.Appendix:Shun Sheng Construction Co., Ltd.'s Uniform Invoice Number: 12137017Li Peng Construction Co., Ltd.'s Uniform Invoice Number: 36036832Yu Li Construction Co., Ltd.'s Uniform Invoice Number: 12351819Chin Tao Enterprise Construction Co., Ltd.'s Uniform Invoice Number: 31267263Ming Chuan Plumbing and Electrical Construction Co., Ltd.'s Uniform Invoice Number: 24031550Sheng Chuan Construction Co., Ltd.'s Uniform Invoice Number: 04757560Hsin Tung Construction Technology Consulting Co., Ltd.'s Uniform Invoice Number: 18818124Li Cheng Construction Co., Ltd.'s Uniform Invoice Number: 97315028Chieh Yi Construction Co., Ltd.'s Uniform Invoice Number: 09460779Fei Lung Plumbing and Electrical Co., Ltd.'s Uniform Invoice Number: 37508417Chi Teh Plumbing and Electrical Enterprise Co., Ltd.'s Uniform Invoice Number: 31312871Lien Hsin Plumbing and Electrical Construction Co., Ltd.'s Uniform Invoice Number: 35836385Chin Yuan Construction Co., Ltd.'s Uniform Invoice Number: 11956939Hsiang Tai Plumbing and Electrical Co., Ltd.'s Uniform Invoice Number: 84602239Hua Hung Construction Co., Ltd.'s Uniform Invoice Number: 86719396Ching Chiu Enterprise Co., Ltd.'s Uniform Invoice Number: 05430943Chun Yuan Construction Co., Ltd.'s Uniform Invoice Number: 86000916Ho Hsing Plumbing and Electrical Construction Co., Ltd.'s Uniform Invoice Number: 11336447Ta Teh Construction's Uniform Invoice Number: 20503228Chia Yi Plumbing and Electrical Construction Co., Ltd.'s Uniform Invoice Number: 77519354Chun Sheng Plumbing and Electrical Construction's Uniform Invoice Number: 11460000Summarized by Hsieh, Hsiu-Lin; Supervised by Tso, Tien-Liang