Slimex Corporation and Taiwan Area National Expressway Engineering Bureau ["the Bureau"] were complained for its bidding process for SRC version used on the section to the south of Chunghe of the Second Expressway in violation of the Fair Trade Law

Chinese Taipei

Case:

Slimex Corporation and Taiwan Area National Expressway Engineering Bureau ["the Bureau"] were complained for its bidding process for SRC version used on the section to the south of Chunghe of the Second Expressway in violation of the Fair Trade Law

Key Words:

Deceptive or obviously unfair

Reference:

Fair Trade Commission Decision of 20 March 1996 (the 231st Commission Meeting); Disposition (86) Kung Ch'u Tzu No. 058

Industry:

Environment protection engineering industry (4504)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. According to the "Principles of Application for Article 24 of the Fair Trade Law," whether an enterprise's acts are deemed deceptive or obviously unfair as set out in Article 24 shall be determined by two steps: the first step is to observe the trading behavior among trading counterparts, and the second step is to see if effective competition has been damaged in the market. The case in question is as follows:

(1) The Bureau was the proprietor in the case, but it had signed a contract of engineering design with Chungting Company. Therefore, it was only in charge of administrative matters such as the opening of tenders and reviewing of tenders. In addition, the procurement was through an open tendering process, and the Bureau did not develop specific terms and conditions based on the design submitted by Chungting Company so as to favor any specific manufacturer. Therefore, no factual evidence has shown that the Bureau violated the provisions of Article 24 of the Fair Trade Law.

(2) As for whether Slimex Corporation violated Article 24 of the Fair Trade Law, its representative appeared at the Fair Trade Commission and stated that the US manufacturer of Durisol did not notify Slimex Corporation of any change in the manufacturing process because the US manufacturer did not deem to change the material information. The change in question involved injecting colors into the product instead of applying the color onto the product externally. Such change not only led to changes in costs, but also might prolong the period of installation.

According to normal business practices, it should be deemed material information. Homao Company and Tunghsin Company, the complainants, made a statement to the following effect: "Slimex Corporation replaced secretly the appendixes to the contract while it was signing the contract with Tunghsin Company. Such act on the part of Slimex Corporation was condemnable," and "Tunghsin Company after being awarded the contract negotiated with Slimex Corporation and both parties agreed to have a letter of credit issued by a local bank. However, while the letter of credit was issued, Slimex Corporation was found to have secretly replaced the specific part (the part concerning whether the color would be injected or applied externally), which was an unacceptable act." Moreover, on 5 January 1996, Slimex Corporation's representative appeared at the Commission for the second time and stated that they would provide an explanatory telegram dispatched by the aforesaid US manufacture within one week, but they never did. As a result, Slimex Corporation's defense the US manufacturer never gave any notification of the said change in the manufacturing process seems inadmissble.

2. Because Slimex Corporation concealed material facts, the complainant after winning the bid , due to increased costs and other reasons, had difficulties in obtaining the SRC version product which met the specially developed terms and conditions and thus sustained losses. Slimex Corporation's act has affected adversely the competition in the market and constitutes a violation of Article 24 of the Fair Trade Law, which prohibits an enterprise from engaging in any deceptive or obviously unfair facts that will adversely affect the trading order.

　

Summarized by Chang, Lun-chen
Supervised by Shih, Chin-tsun

Appendix:
Slimex Corporation's Uniform Invoice No.: 30878126

＊＊: For information of translation, click here

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