Changhua County Real Estate Agents Association violated the Fair Trade Law for specifying service fee standards and maintaining such fee standards by expelling those who did not comply with the fee standards
Chinese Taipei
Case:
Changhua County Real Estate Agents Association violated the Fair Trade Law for specifying service fee standards and maintaining such fee standards by expelling those who did not comply with the fee standards
Key words:
restrain business competition activities, hamper the free competition function of the market, service fees
Reference:
Fair Trade Commission Decision of May 6, 1998 (the 339th Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 117
Industry:
Real Estate Brokerage Industry (6812)
Relevant Laws:
Summary:
The Changhua County Government found in the minutes of the meeting of the Changhua County Real Estate Agents Association (respondent), which the respondent had submitted, a resolution that a certain member company of the respondent association was required to publish a notice in the newspaper within one week to amend the service fee from 3% to 4% of the selling price or would be penalized by expulsion from the association. The Changhua County Government sent a letter of inquiry to the Fair Trade Commission for clarification of whether the respondent's action was in violation of the Fair Trade Law.
The Fair Trade Commission investigated and found that the respondent resolved by a meeting to specify the service fee as 4% of the selling price and repeatedly promoted such standard to its members. In reality, such fee standards have resulted in a uniform 4% service fee commonly adopted by many real estate agents in the area. The uniform fee standards restrained the business competition activities and affected market function of the real estate brokerage in the Changhua area. In addition, in its directors and supervisors' meeting the respondent decided that it would expel those members who failed to publish a notice to amend the service fee as 4%, thereby maintaining the fee standards. While all the respondent's members indicated that the respondent did not interfere with members that privately collected lower service fees, and the respondent’s specification of such service fee standards was to avoid improper collection at different prices and vicious competition. Therefore, the respondent requested that its members not publish any service fee below the fee standards. However, despite the respondent's effort to prevent vicious competition, its actions restricted the enterprises' price competition and hampered the free competition function of the real estate brokerage market in the Changhua area.
The respondent's specification of service fee standards, repeated promotion of those standards on its members, and maintenance of the standards by expelling those who did not comply with the fee standards of the real estate agents in the Changhua area and affected the competition function of the real estate brokerage market in the Changhua area. Such action which contradicted the legislative purpose of the Fair Trade Law to maintain free and fair competition, constituted a concerted action as provided in Article 7 of the Fair Trade Law and violated Article 14 of the Fair Trade Law.
Summarized by Lin, Hsing-wen
Supervised by Hu, Kuang-yu