Violation of the Fair Trade Law by Postal Remittance and Savings Bank for raising fees to public utilities for payment of accounts through deposit account remittances
Chinese Taipei
Case:
Violation of the Fair Trade Law by Postal Remittance and Savings Bank for raising fees to public utilities for payment of accounts through deposit account remittances
Key Words:
fee collection standard, obviously unfair, discriminatory treatments
Reference:
Fair Trade Commission Decision of Jan. 13, 1999 (376th Commissioners' Meeting); Letter (88) Kung Yih Tzu No. 8707676-001
Industry:
Postal Savings Exchange (6550)
Relevant Laws:
Summary:
This case originated from the allegation by the Chinese Taipei Public Gas Enterprise Association and gas companies in the greater Taipei City area that the Postal Remittance and Savings Bank (PRSB, the respondent) informed them by a letter in February 3, 1998 of its decision to raise the remittance service charges for public utilities bills beginning on July 1, 1998. However, the prices for gas and other services that gas companies could charge its customers are determined by an existing formula, assessed by a certified public accountant, and approved by the competent authority. For gas companies in the greater Taipei City area, the prices must be reviewed and approved by the Taipei City Council. That the PRSB moved directly to raise the service charges by 60% appeared to be unreasonable. The charge, formerly NT$2.5 per remittance, was raised to NT$3.0 where the total number of remittance service is above 10,000, and NT$4.0 where the number is below 10,000. However, as the number of remittance service for any gas company is unlikely to exceed 10,000, the scheme of charges set by the PRSB was obviously unfair.
With respect to whether the raise of remittance service charges by the PRSB was obviously unfair, it is the finding of the Fair Trade Commission that the respondent had entered into an agreement with gas companies regarding the collection of gas bills through the deposit account remittance services under which the respondent would collect the bills for gas companies. In addition, according to the information provided by the Bankers Association of Chinese Taipei, banks' charges for deposit account remittance services vary, ranging from NT$2.5 to NT$5.0 per remittance. Compared with the charges by banks, the respondent' s intention to raise its charges for remittance service from NT$2.5 to NT$3.0 is still reasonable. Taking into account of the facts that the PRSB has not raised its service charges since 1981 and that PRSB, as a business organization, is solely responsible for any profits or loss from operation, the decision to raise its service charges was made on justifiable considerations. The spirit of fair competition was not violated.
Although both parties in this case stick steadfastly to their opinions on whether it is possible that the number of remittances services will be above the preferential level of 100,000, the two-tier pricing scheme follows the one adopted by the PRSB for its provision of remittance service to media companies. As the processing costs are fixed, unit cost decrease while the quantity for processing increases. Therefore, the two-tier pricing scheme is based on the different quantities requesting for processing and is not without appropriate reasons. Furthermore, the respondent in a subsequent meeting has decided to abandon the scheme and had issued a letter to each gas company in September 1998 to set the charges uniformly at NT$3.0 per remittance. The existing agreement will still be valid through June 30, 1999. Thus, there was no discriminatory treatment involved in this part. In conclusion, there was no violation of the Fair Trade Law.
Summarized by Wu Pi-ru
Supervised by Hu Kuang-yu
Appendix:
Postal Remittance and Saving Bank (P.R.S.B.) Uniform Invoice No.: 03741204