Golf-Course Operators Federation was complained for violation of the Fair Trade Law for setting uniform fees and discounts of fee charges during a Board Directors' and Supervisors' Plenery Meeting and Joint Session of Golf Course Operators
Chinese Taipei
Case:
Golf-Course Operators Federation was complained for violation of the Fair Trade Law for setting uniform fees and discounts of fee charges during a Board Directors' and Supervisors' Plenery Meeting and Joint Session of Golf Course Operators
Key Words:
concerted action
Reference:
Fair Trade Commission Decision of July 25,1997 (the 299th Commission Meeting), Letter (86) Kung Yi Tzu No. 02952 and Disposition (86) Kung Ch'u Tzu No. 128
Industry:
Sports Fields Industry (8701)
Relevant Laws:
Article 14 of the Fair Trade Law
Summary:
1. The member golf courses in the southern region of the Golf-Course Operators Federation (GCOF) called a meeting on January 31, 1996, and on February 26, 1996, to discuss adjustment of fees and uniform discounts. Later, some golf courses accordingly adjusted their fees and discounts, for which the 261st Commission Meeting subsequently imposed desist order. In addition to these, the 1995 Work Report in the minutes of the Third Session of the First Board Directors’ and Supervisors’ Plenary Meeting and Joint Session of Golf Course Operators held on February 28, 1996 stated that “Coordination should be brought about in consideration of different characteristics of the three regions respectively. In order to prevent vicious competition, there should be a reasonable adjustment of the fees. In principle, a 20% discount should be offered to a group consisting of over 20 people and a 50% discount to VIPs.” In addition, the minutes also recorded a motion which stated, "Unregulated discounts offered by a few non-members has caused vicious competition. The Vice Board Director of each region shall assist in the negotiations with those non-members, and before it becomes certain that coordination cannot be brought about, the members should offer discounts as originally agreed. "Both the work report and the motion of February 28, 1996 indicated a probable violation of the Fair Trade Law. Therefore, the Commission investigated this matter pursuant to its authority.
2. The GCOF is a formal organization established in accordance with the People's Organization Law to provide channels for consultation and for exchange of information among enterprises at the same level of production and distribution. Therefore, it can influence market order greatly. In addition, the GCOF also issued golf cards that offer 20% discounts in conjunction with some member golf courses. Therefore, the GCOF is considered "a person or organization engaged in transactions by providing goods or services" under Article 2(4) of the Fair Trade Law and should be governed by the Fair Trade Law. In addition, according to the information supplied by the GCOF, there are currently 63 golf courses in operation, with 35 in northern Chinese Taipei, 14 in the central area, and 14 in the south. The GCOF has 35 members, with 19 in the north, 6 in the central area, and 11 in the south. Therefore, the GCOF has great influence on the market.
3. Article 7 of the Fair Trade Law stipulates that "the term 'concerted action' as used herein refers to an act to mutually restrict the activities of enterprises, such as an act by an enterprise that enters into a contract, agreement or other form of mutual understanding with other enterprises with whom it competes, to jointly determine the price of goods or services, or to restrict quantities, technology, products, equipment, trading counterparts or trading territories." In this case, the GCOF called the Third Session of the First Board Directors’ and Supervisors' Plenary Meeting and Joint Session of Golf Course Operators to discuss the 1995 Work Report. At the meeting, a resolution was adopted to negotiate, adjust fees in consideration of different characteristics of the three regions respectively, and provide uniform discounts. In addition, a motion was made at the meeting to ask the Vice Board Director of each region to assist the negotiations and consultations. Thus, a binding agreement regarding the fee standard and discounts was reached during the meeting. Although no negotiation has been conducted between the northern and central regions, the meeting called to discuss such matter was likely to result in concerted actions which would undermine the market mechanism of the golf course market, and thus in violation of Article 14 of the Fair Trade Law which prohibits concerted actions.
Summarized by Lai, Mei-hwa
Supervised by Lin, Yu-ch'ing
＠: For information of translation, click here
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