Jardine Schindler Lifts Limited violated the Fair Trade Law for refusing to provide repair and maintenance services
Chinese Taipei
Case:
Jardine Schindler Lifts Limited violated the Fair Trade Law for refusing to provide repair and maintenance services
Key Words:
abuse of competitive advantages in the market, refusal to enter into a trade, repair and maintenance services after sales
Reference:
Fair Trade Commission Decision of 16 April 1997 (the 285th Commission Meeting); Letter (86) Kung Er Tzu No. 8309261-003 dated 22 May 1997.
Industry:
Elevator industry (3290)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
1. Jardine Schindler Lifts Limited [hereinafter referred to as "Jardine Lifts"] was complained to have obstructed its competitors from providing repair and maintenance services for users of its lifts, and attempted to force the users into a trade with itself by applying undue means such as "threatening the lift users to pay disputed debts for others regarding lift maintenance fees by refusing to repair the lift," "refusing to provide the emergency opening key for the lift" and "refusing to provide parts and fittings related to the lift."
2. The business environment of the domestic lift market: Taiwan's lift market was first built and developed by Japanese lift enterprises, so the current structure of Taiwan's lift market is similar to that of Japanese companies, having the following characteristics:
(1) There is low degree of substitutability among parts and fittings of lifts produced by different manufacturers because of the differences in their specifications.
(2) The relevant law requires frequent and periodic maintenance of lifts as human life is at stake.
(3) Repair and maintenance services are only available from the original manufacturers of the lifts in question as no original parts and fittings are allowed to be sold in the market.
(4) Lift maintenance services are expensive..
(5) The original manufacturer usually handles trade disputes by refusing to provide repair and maintenance services.
(6) The competition mechanism is unable to function in the after-sales maintenance market.
(7) Lift users are usually not those who chose and purchased the lift.
In view of the aforesaid characteristics in the domestic lift market, Jardine Lifts is in an advantageous position in the after-sale lift maintenance market by controlling the supply of parts and fittings for their lifts.
3. In this case, Jardine Lifts took advantage of the situation, where the lift users had a lift in desperate need of repair and no other enterprise was available to render the said services, by forcing the said lift users to repay debts for the actual debtor. Moreover, in disregard of the safety of the users, Jardine Lifts refused to give the users the emergency opening key. It also declined to provide relevant parts so as to deprive the users of the freedom to decide the trading counterpart and to force them to enter into a trade with itself. By doing so, it obviously hindered the trading opportunity available to its competitors, and its intent to force the lift users into a trade with itself was also obvious. Both indicated that Jardine Lifts abused its market power in after-sales maintenance market for lifts. Such an act was obviously unfair and may adversely affect trading order, thus constituting a violation of the provisions of Article 24 of the Law.
4. Pursuant to the provisions of Article 24 of the Law, sanctions shall be imposed on Jardine Lifts for its aforesaid acts. Furthermore, as the said situation is common practice in the after-sales maintenance services market in Taiwan, whose specific development type could be traced back into history, the Commission decided to take industry rectification measures pursuant to "The General Principles to Dispose Related Cases and Cases investigated on the Commission's Initiative" in order to prevent other lift enterprises from abusing their market power like the sanctioned party did in the instant case.
Summarized by Ho, Pei-wen
Supervised by Yang, Chia-chun
Appendix:
Jardine Schindler Lifts Limited's Uniform Invoice No. 22318500
＊＊: For information of translation, click here
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