Violation of the Fair Trade Law by China Engineering Consultants Inc. for specifying use of certain product brands for the stretchable aperture construction of the CKS Airport Phase-2 Project
Chinese Taipei
Case:
Violation of the Fair Trade Law by China Engineering Consultants Inc. for specifying use of certain product brands for the stretchable aperture construction of the CKS Airport Phase-2 Project
Key words:
deceptive, obviously unfair, abuse of market position
Reference:
Fair Trade Commission Decision of 16 June 1998 (the 341st Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 135
Industry:
Government Agencies (9111)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
The complaint stated that China Engineering Consultants Inc. (the respondent) specified the use of certain product brands distributed by Sika (Chinese Taipei) and Sika's affiliates, K'ang P'ei and Hsiang Hui, and that such specification was not convincing.
The respondent was commissioned to plan and design the CKS Airport Phase-2 Project [the Project]. According to the respondent's explanation, the design was based on the Project's functional features, such as the width and position selected. Products bearing the METALINES, C/S and BALCO brand names were selected from the 1989 edition of Sweets CatLOG File [the File] provided by B&M Company, which was a foreign consultant on the Project. The File had more than ten other brand names in addition to these three, but did not include the Sika and Migua brands. No reasonable explanation was made about how such brand name specification was determined. METALINES was acquired by BALCO in 1993, and its products were marketed under a single brand name "BALCO, METALINES". However, the specification still listed BALCO and METALINES as two brands, and thus deceived the owner [of the Project] and hindered the product diversity offered by bidders. Furthermore, the domestic sales agents for the specified brands were limited to Hsu Chia, Sika (Chinese Taipei), and K'ang P'ei. According to their addresses, corporate logo, advertisement and project records, these three companies were in fact affiliates. The respondent's brand name specification substantially restricted competition, causing the owner and bidders to believe mistakenly that there was competition among the various brands.
Article 24 of the Fair Trade Law provides that, unless otherwise provided for in the Law, an enterprise shall not conduct other deceptive or obviously unfair acts that are sufficient to affect trading order. The respondent breached its mandate by specifying the brand names to be used and thereby hindered the competition. Such act materially excluded competing enterprises from participating in the competition, harmed competitors' interests, and constituted a deceptive or obviously unfair act which was sufficient to affect trading order. The respondent is found to have violated Article 24 of the Law.
Summarized by Ch'en, Yi-ch'eng
Supervised by Tzuo, T'ien-liang