Taipei Seafood Distribution Corp. alleged to have colluded with illegal seafood product distribution groups in disrupting the trading order of wholesale seafood auction markets in violation of the Fair Trade Law
Case:
Taipei Seafood Distribution Corp. alleged to have colluded with illegal seafood product distribution groups in disrupting the trading order of wholesale seafood auction markets in violation of the Fair Trade Law
Key Words:
seafood product wholesale auction market, Agricultural Product Market Trading Law, seafood commodity joint distribution certification
Reference:
Fair Trade Commission Decision of December 20, 2001 (the 528th Commissioners' Meeting); Letter (90) Kung Yi Tzu No. 9013596-004
Industry:
Aquatic Product Wholesale (4416)
Relevant laws:
Summary:
1. The Taipei Branch of the Ministry of Justice Investigation Bureau forwarded a written complaint from a member of the general public alleging that the Taipei Seafood Distribution Corp. was colluding with illegal seafood product distribution groups in illegally obtaining the rights to joint seafood product wholesale auction markets by providing falsified Chia-Nan Seafood Product Distribution Cooperative Seafood Commodity Joint Distribution Certifications to unqualified individuals as fishermen for the purpose of monopolizing the wholesale auction market for farm-raised fish products. 2. Investigation found that the Taipei Seafood Distribution Corp.'s (the respondent) had in fact responded to reports that the Chia-Nan Seafood Product Distribution Cooperative (Chia-Nan) had provided falsified joint distribution certifications to unqualified persons or groups by repeatedly contacting Chia-Nan by telephone in an effort to determine the facts of the situation. The respondent had also contacted seafood traders in various production areas and called meetings with local distribution cooperatives to discuss distribution problems regarding farm-raised fish products, and further requested that Chia-Nan provided a copy of its membership registry. Chia-Nan, however, refused to provide a copy of its membership registry and the respondent stated that its actions were limited by regulations governing the distribution of agricultural products or regulations governing suppliers and by its lack of authority to compel Chia-Nan to hand over the registry; thus preventing it from expeditiously handling the matter. In a letter dated 24 July 2001, however, Chia-Nan confirmed to the respondent that an operational oversight had led to the issuance of joint distribution certifications to unqualified individuals. On 1 August 2001, the respondent, in accordance with Chapter 3, Article 14 of its own Regulations Governing Suppliers ("Agricultural and fishermen's groups may not violate the operating rules of this company or harm the public interest") suspended all Chia-Nan members holding distribution certifications from registering to auction in its market for 15 days. The respondent had also submitted its findings to and filed written requests with the Tainan County Government and the central competent authority, the Ministry of the Interior, to take over the case. Therefore, the respondent was not found to have violated regulations governing the distribution of agricultural products or regulations governing suppliers. And in line with this, the Taipei Seafood Distribution Corp. stated that its investigation procedures and handling of the case upon hearing the complainant's report that Chia-Nan's provision of fictitious seafood commodity joint distribution certifications was conducted in accordance with the relevant regulations governing the distribution of agricultural products and its own Regulations Governing Suppliers. 3. According to Article 46 of the Fair Trade Law: "Where provisions of any other law apply to competitive activities of an enterprise, such provisions shall take precedence over this Law, provided they do not conflict with the legislative purposes of this Law." As regards this case, where members of joint seafood distribution alliances enjoy prioritized trading rights, under the provisions of Article 7 and Article 8 of the Agricultural Product Market Trading Law, the respondent may provide prioritized trading for the products of members of joint distribution alliances associated with fishermen's groups by means of drawing lots. The respondent's provision of prioritized handling for products of members of such groups conforms to policies of protecting agricultural producers' groups set forth by the competent agricultural authorities, and does not conflict with the legislative intent of the Fair Trade Law, so application of the provisions of the Agricultural Product Market Trading Law takes precedence. As for other competitive practices of agricultural product market trading enterprises, if there is conflict with the legislative intent of the Fair Trade Law, application of the provisions of the Fair Trade Law may not be precluded. For example, given the limited daily demand for seafood products, if fishermen's groups were providing non-members with joint distribution certification, such that non-members could enter the wholesale auction market and enjoy the right to prioritized trading, thereby decreasing trading opportunities for those fishermen who do not hold such joint distribution certification and, further, shrinking the pool of potential trading partners for seafood buyers, this could directly affect the availability and price of seafood, the rights of traders, and the fairness of the seafood product wholesale auction market to the extent of restraining competition or causing unfair competition. In such instance, the Fair Trade Law would still be applicable under the provisions of Article 46, if there were violations of this Law. In the present case, it cannot be confirmed based on the available evidence that violations of the Fair Trade Law occurred. However, given that matters relating to the verification and practical management of joint distribution certification may directly affect the availability and price of seafood products, the rights of relevant traders, and the fairness of the seafood product wholesale auction market, the Commission has already issued written notice to the respondent asking it to reinforce its supervision of the practical management and verification of joint distribution certifications and other matters involved in this case to put an end to such disputes.Summarized by Chen, Ei-Chen; Supervised by Cheng, Chia-Ling