The Commissary Goods Supply Administration of Ministry of National Defense violated the Fair Trade Law for causing unfair competition by careless identity checks
Chinese Taipei
Case:
The Commissary Goods Supply Administration of Ministry of National Defense violated the Fair Trade Law for causing unfair competition by careless identity checks
Key Words:
unconscionable, trading order, loose (careless) identity check
Reference:
Fair Trade Commission Decisions of August 23, 1995 (the 202nd Commission Meeting), September 20, 1995 (the 206th Commission Meeting), and June 25, 1997 (the 295th Commission Meeting); Dispositions of (84) Kung Chu Tsu 129, and (86) Kung Chu Tsu 091
Industry:
Retail Business (5319)
Relevant Laws:
Summary:
1. This case is originated from the complainant brought respectively by competitors in the same trade who alleged that the Commissary Goods Supply Administration (hereinafter referred to as the "CGSA") of the Ministry of National Defense (MND), by taking advantage of its tax-free privilege, and had set up a nominal entry-control and competed unfairly with private retail traders Investigation results reveal that:
(1) The commissary goods supply operation conducted by the CGSA has effected through a serious of operation procedures such as public announcement, suppliers registration, price inquiry, supplier verification and price negotiation etc. commissary goods will be purchased directly from manufacturers or import firms through a centralized procurement system and will then be sold at price with a 2% mark-up over the cost. The consumers eligible to purchase commissary goods are limited to active servicemen, veterans and their families. The manufacturers or import firms are limited to those companies which are capable of producing and supplying qualified commissary goods as required in the public announcement given by the CGSA. Therefore, the act of the CGSA in providing commissary goods will give rise to some substantial effects on demand and supply, has the characteristics of trading with economic value, and is in fact carries out the trade transactions at market place. As a result, the CGSA should be regarded as a business entity as defined in Article 2(4) of the Fair Trade Law, "person or organization engaged in transactions by providing goods or services."
(2) The CGSA has established rules of "Commissary Goods from Out-Flow Prevention." According to such rules, only active servicemen, veterans and their families are eligible to purchase commissary goods; and they will be permitted to enter the commissary goods supply center only when their identity cards shown at the entrance of the center are duly verified.
(3) However, the inspector sent by the Fair Trade Commission (FTC) has witnessed the fact that the CGSA did have a careless control of customer identity check. This carelessness was later admitted by the CGSA's representative appearing at the hearing proceedings given by the FTC.
2. As stated above, in conducting the operations of supplying commissary goods to active servicemen, veterans and their families, the CGSA's failure to make strict verification of customer identity cards has expanded the scope of its customers to persons other than active servicemen, veterans and their families. Its conduct not only is contrary to its own rules of "Commissary Goods from Out-Flow Prevention", but also was caused unfair competition with general retail traders due to its business tax exemption privilege and use of market place provided by the government in reducing the operating cost. Such conduct constitutes an obviously unfair act which is sufficient to affect the trading order. Consequently, after reviewing the facts involved in this case, the 202nd and the 206th Commission Meetings of the Fair Trade Commission resolved that the act of CGSA has violated Article 24 of the Fair Trade Law and shall be ordered, pursuant to the forepart of Article 41 of the Fair Trade Law, to cease the obviously unfair act which is sufficient to affect trading order.
3. After taking the above said disciplinary measure against the CGSA, the FTC again received complaint from some informants who alleged that the careless control of customer identity check procedure at CGSA's market place remains unimproved. This fact was subsequently verified by the FTC as a true fact. Therefore, the 295th Commission Meeting the FTC resolved that CGSA shall be imposed with a fine in the amount of NT$300,000 and shall further be ordered to cease its violating act so as to maintain the trading order on the market as well as to ensure a fair competition in the industry.
Summarized by Hsou, Yun Yang
Supervised by Chien, Hsun Liu
＄: For information of translation, click here
[Browse by APEC Member
Economies] [Browse by Subject Categories] [Home]
[Decisions] [Approvals] [Interpretations] [Administrative Guidance]