A complaint was filed against certain cable broadcast operators in Tainan for conducting joint business operations
Chinese Taipei
Case:
A complaint was filed against certain cable broadcast operators in Tainan for conducting joint business operations
Key Words:
merger; joint operations; cable television
Reference:
Fair Trade Commission Decision of April 6, 1999 (the 387th Commission Meeting); Dispositions (88) Kung Chu Tzu Nos. 047 and 048
Industry:
Television Industry (8520)
Relevant Law:
Article 11(1)(i) of the Fair Trade Law
Summary:
The Government Information Office under the
Cabinet divided the Tainan City administrative zone into the “Tainan
City northern district” and “Tainan
City southern district” for cable TV operators. Di-I-Ja CATV
and Loug-Ying CATV were the two operators in the northern district of Tainan City.
In July 1998, Loug-Ying moved its administrative personnel into the same office building
as Di-I-Ja. However, Loug-Ying did not erect signs, did not have an independent office
space, and did not publish its own advertisements and program guides. In addition, the
Government Information Office under the Cabinet also detected that Loug-Ying illegally
connected to the signals of Di-I-Ja. Since Loug-Ying and Di-I-Ja were the only two cable
operators in the northern district of Tainan City, and both companies shared the same
transmission signal and the same office building, they frequently conducted business
jointly. Their acts thus constituted a mreger in accordance with the Fair Trade Law (FTL).
In the southern district of Tainan City, Ta-Fu-Chen CATV, Yong-Jen CATV, and Ch'un He CATV
are the three current operators. Ta-Fu-Chen and Yong-Jen started negotiations on merger in
July and August 1998. Since both parties were willing to merger, they had an agreement on
signal transmission and customer service. Ta-Fu-Chen shared its service telephone number
and address with Yong-Jen, and both companies exchanged programs bought during the
beginning of the year. As a result, the two companies had the same program broadcasts.
From the above investigations, Ta-Fu-Chen and Yong-Jen “frequently
conducted business jointly,” which falls rittin the scope of
Article 6(1)(iv) of the FTL.
Articles 11(1)(i) and (ii) of the Law states that
enterprises shall file an application for approval with the central competent authority
for intended merger under the following circumstances: “(1) as
a result of the merger, the surviving enterprise will have one-third of the market share;
(2) one of the enterprises in the merger has one-fourth of the market share …”.
The market share of Di-I-Ja CATV and Loug-Ying CATV, as well as that of Ta-Fu-Chen CATV
and Yong-Jen CATV, before and after the combination met the requirements of the
aforementioned subparagraphs (i) and (ii). In accordance with Article 7 of the
Implementing Regulations of the FTL, all enterprises participating in a merger shall file
an application for an approval. Thus Di-I-Ja and Loug-Ying, as well as Ta-Fu-Chen and
Yong-Jen, should file applications for approval with the Fair Trade Commission in
accordance with the FTL. However, the aforementioned companies failed to file their
respective applications for merger, and thus violated Article 11 of the FTL.
In accordance with Article 40 of the FTL, Di-I-Ja and Loug-Ying were each fined of NT$800,000, while Ta-Fu-Chen and Yong-Jen were each fined NT$700,000. The companies were also ordered to take the necessary corrective action.
Appendix:
Di-I-Ja CATV's Uniform Invoice Number: 84956339
Loug-Ying CATV 's Uniform Invoice Number: 16501676
Ta-Fu-Chen CATV's Uniform Invoice Number: 84662469
Yong-Jen CATV's Uniform Invoice Number: 86083824
Summarized by Ch'en, Yi-ch'eng
Supervised by Chen, Hui-p'ing