A complaint was filed against three refill and distribution companies in Hsinchu and Miaoli, Pei Yi Hsing Enterprise, Liu T'ung, and Hsin Lun, for acting in concert to raise prices of liquefied petroleum gas (LPG)
Chinese Taipei
Case:
A complaint was filed against three refill and distribution companies in Hsinchu and Miaoli, Pei Yi Hsing Enterprise, Liu T'ung, and Hsin Lun, for acting in concert to raise prices of liquefied petroleum gas (LPG)
Key Words:
gas refilling and distribution companies; liquefied petroleum gas (LPG); mutually agreed-upon product prices; agreement to prevent other industries from entering the market
Reference:
Fair Trade Commission Decision of April 7, 1999 (the 387th Commission Meeting); Disposition (88) Kung Ch' u Tzu No. 041
Industry:
Gaseous Fuel Supplier (4200)
Relevant Laws:
Summary:
Gas distributors in Hsinchu filed a complaint against the Tung-hsiao factory of Pei Yi Hsing Enterprise Corp. (hereafter referred to as Pei Yi Hsing), Liu T' ung Enterprise Corp. of Hsinchu (hereafter referred to as Liu T' ung), and Hsin Lun Corp. (hereafter referred to as Hsin Lun), who acted in concert to raise prices of liquefied petroleum gas (LPG) starting March 1, 1998.
The Fair Trade Commission (this Commission) conducted a price survey on different distributors in the Hsinchu and Miaoli areas and received 55 responses. It was found that after March 1, the LPG per kilogram price increased by NT$1 to NT$2. Twenty-six respondents said that including the transportation fee, the price increased to NT$15.745; eight respondents said the price increased to NT$14.345 excluding the transportation fee. Another eight respondents said the price increase was a concerted action following negotiations by the gas refilling and distribution companies.
According to investigations conducted by this Commission, both Pei Yi Hsing and Hsin Lun acknowledged that there was fierce price competition in the Hsinchu and Miaoli areas during the last two years. Thus, at the beginning of 1998, the three companies agreed not to use prices to compete for customers, and hoped to bring the price levels back to those of the time when they were under the management of the Vocational Assistance Commission for Retired Servicemen. The companies agreed that prices would be uniformly raised to NT$15.745 for a three-month trial period starting March 1. They also reached agreements in Taoyuan requiring one another not to compete for customers outside of their respective territories.
Although Liu T' ung did not directly admit to acting in concert, both Pei Yi Hsing and Hsin Lun proved that Liu T' ung did take part in the concerted action. In addition, the time when Liu T' ung raised its prices, the range of increase were the same as those of Pei Yi Hsing and Hsin Lun. As Liu T' ung also admitted to maintaining the per kilo price at NT$15.745, it was proved that Liu T' ung was part of the concerted action. Investigations of several downstream trading counterparts in Hsinchu and Miaoli also showed that the companies in Hsinchu and Miaoli did act in concert to raise prices.
Article 14 of the Fair Trade Law (the Law) clearly states that enterprises shall not act in concert. The three companies, Pei Yi Hsing, Liu T' ung, and Hsin Lun agreed on product prices in order to generate profit. In addition, they agreed to prevent other competing enterprises from entering the Hsinchu and Miaoli market. The three companies acting in concert to increase LPG prices violate Article 14 of the Law and shall be punished in accordance with the first part of Article 41 of the Law.
Appendix:
Pei Yi Hsing Enterprise Corp.'s Uniform Invoice Number: 86927084
Liu T' ung Enterprise Corp. 's Uniform Invoice Number: 23779966
Hsin Lun Corp.'s Uniform Invoice Number: 47240184
Summarized by Huang, Tsong-chieh
Supervised by Tsuo, T' ien-liang