Objection of Kaohsiung Travel Agencies against vehicle rental rates raising by associated operation center formed by Kimen Tourist Bus Industry

Chinese Taipei

Case:

Objection of Kaohsiung Travel Agencies against vehicle rental rates raising by associated operation center formed by Kimen Tourist Bus Industry

Key Words:

Highway Law, associated operation, concerted act

Reference:

Fair Trade Commission Decision of September 6, 1995 (the 204th Commission Meeting)

Industry:

Tourist Bus Business (6115)

Relevant Law:

Article 19(iv) of Fair Trade Law

Summary:

1. Restriction on tourism business in Kimen was fully lifted since February 1993. To meet the requirements, Kimen County Government accepted the applications for incorporation of tourist bus passenger transportation companies and finally approved the incorporation of ten tourist bus companies. However, as the market liberalization brought about price-cutting competition among tourist bus operators, the tourist bus companies in Kimen area formed the "Joint Service Center of Tourist Bus Industry in Kimen County" on August 8, 1994 and established the "Rules for Centralized Vehicle Dispatching" for centralized dispatch control of tourist buses. Nevertheless, the formation of said Joint Service Center had not been reported to and approved by the competent authority in advance. Upon incorporation of tourist bus companies, the bus rental rates fixed by such companies are different from one company to another. On July 28, 1994, the Tourist Bus Association of Kimen County submitted, on behalf of its member companies, to Kimen County Government for its approval and recordation a tourist bus rental rates schedule. However, as the said rental rates schedule was not supported by detailed analysis of the pricing method, Kimen County Government thus required the said Association to review and resubmit such rental rates schedule in accordance with relevant provisions stipulated in the Rules for Control of Automobile Transportation Enterprises. A final tourist bus rental rates schedule was then worked out and submitted by the said Association on September 15, 1994 and approved by the competent authority, Kimen County Government on November 21, 1994 for enforcement effective from December 1, 1994.

2. The formation of a joint service center by tourist bus operation in Kimen area is an "act of associated business operation" as defined in Highway Law and shall not be effected, unless a prior approval has been obtained from the competent authority in accordance with the provisions of Article 45 of the Highway Law and Article 44 of the Rules for Control of Automobile Transportation Enterprises. In the present case, as the tourist bus operators concerned did not comply with the governing laws, the authority in charge of highway transportation business is legally entitled to handle the case. In addition, the said act of associated business operation at issue also involves the concerted act as defined in the Fair Trade law, therefore, Fair Trade Commission (FTC) is also entitled to deal with such act. However, it is noted that in addition to governing the operating conduct of land transportation business, the Highway Law is also purposed to ensure a balanced relation among various factors pertaining to administrative policies in the said business such as transportation safety, avoidance of waste of resources and welfare of passengers. As for the objective contemplated by Fair Trade law, such as effective utilization of resources and consumers rights and interests, they may also be taken into consideration by the competent authority when dealing with highway transportation affairs. The provisions of Article 4 of the "Pricing Rules for Automobile Passenger and Cargo Transportation Charges" are self-explanatory in this regard. Based on the foregoing analysis, if the authority in charge of highway transportation affairs can take effective measures against the unlawful act at issue in accordance with relevant provisions stipulated in Highway Law, it will probably bring about a parallel result of achieving the legislating objective of the Fair Trade Law as well as avoiding the occurrence of the risks governed by the same Law.

3. Since the Ministry of Transportation and Communications has stated in its letter to FTC that the matters in connection with joint or associated operation of automobile transportation business and the approval of transportation fee charging rates are governed by the laws and regulation related to highway transportation activities, and that the present case is being handled by the local authority in charge of highway transportation, i.e. Kimen County Government, its administrative authority should certainly deserve due respect. However, if the disposition of the case at issue by the local authority in charge of transportation does not achieve the expected result and the unlawful act of associate business operation remains in existence to the prejudice of trading order and consumers' rights and interests, FTC will take appropriate measures against such act in accordance with the provisions of Fair Trade Law.

　

Summarized by Cheng, Peng- chi
Supervised by Chen, Ming-huang

＠: For information of translation, click here

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