Six cram schools in Kaohsiung violated the Fair Trade Law for their concerted action in prescribing standards for collecting tuition
Chinese Taipei
Case:
Six cram schools in Kaohsiung violated the Fair Trade Law for their concerted action in prescribing standards for collecting tuition
Key words:
concerted action
Reference:
Fair Trade Commission Decisions of 21 January 1998 (the 326th Commission Meeting) and 4 March 1998 (the 330th Commission Meeting); Disposition (87) Kung Ch'u Tzu No. 070
Industry:
Other Educational Training Services (8219)
Relevant Laws:
Article 14 of the Fair Trade Law
Summary:
The Department of Justice's Kaohsiung Investigation Division forwarded to the Commission the promotional literature jointly released in October 1996 by six cram schools in Kaohsiung including Li Hsing, Chien Chih, Ju Lin, Hung Ju, Yuan Tung, Pi Ch'eng [hereinafter collectively referred to as "the respondents"]. The said promotional literature, entitled "3-4-5 Special Deal Available," read that any student from Pingtung who had not enrolled with a major cram school in Kaohsiung was entitled to a super discount by enrolling prior to the end of November with any of the six cram schools for the following semester's joint college entrance exam preparatory courses. The 3-4-5 special enrollment deal was NT$30,000 per person for a group of three, NT$40,000 per person for a pair of students, and NT$50,000 for individual enrollment (only for students majoring in social sciences). According to the promotional literature, the respondents are suspected of having violated the Fair Trade Law by their concerted act of prescribing standards for collecting tuition.
The Commission asked the director of each of the respondents to appear before the Commission and make an explanation during an interview. All of them admitted to have jointly made the promotional literature. Li Hsing's director, Chang Wan Pang, revealed that the promotional literature was a joint product by the directors of the respective cram schools and was released to promote the courses to be provided in the cram school in Pingtung.
The respondents alleged that the promotional literature in question was produced personally by their directors for the purpose of promoting the cram school to be established in Pingtung, rather than for promoting the courses available at any of their schools in Kaohsiung. Nonetheless, the investigation showed that the promotional literature in question was released in the respondents' names, which leads to the conclusion that such release was the respondents' act, and not the directors themselves. In addition, "telephone numbers for inquiries and the place to make your dream come true" as stated in the promotional literature were the respondents' telephone numbers and addresses in Kaohsiung. The content of the promotional literature stated that any student from Pingtung who had not enrolled with a major cram school in Kaohsiung was entitled to a super discount by enrolling prior to the end of November with any of the six cram schools for next semester's joint college entrance exam preparatory courses. Judging by its text, the promotional literature was intended to attract students in Pingtung to enroll for the courses at any of the respondents' locations. The courses mentioned in the promotional literature were to be available at the respondents' locations.
The respondents are in the cram school business of providing preparatory courses for the joint college entrance exam and are competitors with one another. For the purpose of attracting students from Pingtung, the respondents jointly produced and released the subject promotional literature, whereby they took joint action to specify uniform standards for collecting tuition (NT$30,000 per person for a group of three, NT$40,000 per person for a pair of students, and NT$50,000 for individual enrollment). In 1996, the respondents were the only cram schools in Kaohsiung. The respondents' consensus is sufficient to affect the supply and demand in the market and their joint effort of prescribing the standards for collecting tuition constitutes a concerted action as prohibited by Article 14 of the Fair Trade Law. The disposition of the matter is rendered in accordance with Article 41 of the Fair Trade Law.
Summarized by Liao, Yu-hui
Supervised by Lin, You-ch'ing
Appendix:
Li Hsing' Uniform Invoice No.: 76000000
Chien Chih's Uniform Invoice No.: 76002801
Pi Ch'eng's Uniform Invoice No.: 76224206
Ju Lin's Uniform Invoice No.: 08217586
Hung Ju's Uniform Invoice No.: 98588932
Yuan Tung's Uniform Invoice No.: 83410634