Inquiry of Taiwan Provincial Government Education Department regarding probable violation of the Fair Trade Law by the Taiwan Architects Association in notifying its members not to accept any design Commission for the Provincial Government-owned school land follow-up project, in order to safeguard the interest of the original architect
Chinese Taipei
Case:
Inquiry of Taiwan Provincial Government Education Department regarding probable violation of the Fair Trade Law by the Taiwan Architects Association in notifying its members not to accept any design Commission for the Provincial Government-owned school land follow-up project, in order to safeguard the interest of the original architect
Key Words:
copyright, concerted action
Reference:
Fair Trade Commission Decision of the 205th Commission Meeting, Disposition (84) Kung Ch'u Tzu No. 143
Industry:
Architects (7200)
Relevant Laws:
Article 19(iv) of the Fair Trade Law
Summary:
1. The Department of Education (hereinafter, the "DOE") of the Taiwan Provincial Government inquired with this Commission on September 22, 1994, requesting clarification as to whether the Taiwan Architects Association (hereinafter, the "TAA") violated the Fair Trade Law. The act in question was TAA's notifying its members on July 28, 1992 not to accept any design commission for the follow-up project for lands owned by the Taiwan Provincial Government and reserved for schools and industries (hereinafter, the "Project"). For many years, buildings of this Project have been embroiled in lawsuits. In order to safeguard his own interest, the original architect requested assistance from TAA pursuant to the "Guidelines for Safeguarding Design Interest of Members of the Taiwan Architects Association" (hereinafter, the "Safeguard Guidelines"). TAA provided the assistance pursuant to the Safeguard Guidelines and notified its members not to accept any appointment for the design of the Project. The Safeguard Guidelines require that members shall not accept cases for which TAA provides assistance until proper resolution; violations are subject to TAA disciplinary penalties. This was the reason why other architects were deterred from accepting such design appointment. After DOE raised opposition, TAA canceled the above notice on April 29, 1993. However, TAA issued a letter on May 24 of the same year, upon architect Ho's request, to its branches requesting the latter to notify the members that similar cases be handled with caution in order to avoid disputes and copyright infringement. Li Meng-hsiung, an architect who had been interested in accepting the Project, turned down the case after learning from TAA the history of disputes associated with this Project.
2. TAA is an "enterprise" governed by the Fair Trade Law by the definition of Article 2(3) of the Law. In addition, Article 2(4) of the Law also stipulates that "any other persons or organizations engaged in transaction by providing goods or services" is an "enterprise". Accordingly, TAA and the original architect (the firm) were both persons (organizations) who engaged in transactions by providing services, and were thus subject to the regulation of the Fair Trade Law. The Safeguard Guidelines formulated by TAA are abstract rules that regulate private rights and self-discipline; no public interest is involved. However, pursuant to Article 9 of the Safeguard Guidelines, which provide that "any member accepting cases for which this Association provides assistance will be subject to disciplinary penalties for violation of the Association's covenants if such cases have not been resolved." Such provision has obviously gone beyond the scope of internal self-discipline and private rights, and has imposed direct restrictions on certain transactions that may be engaged by TAA's members in a manner that is likely to impede fair competition. In addition, such guidelines were never approved by law before going into effect.
3. Article 19(iv) of the Fair Trade Law stipulates that an enterprise shall not, by coercion, inducement with profit, or other improper means, cause another enterprise to refrain from competing in price, or to take part in a combination or a concerted action in a manner that is likely to impede fair competition. In this case, TAA's notice to its member not to accept any appointment for the design of the Project pursuant to its improper and illegal Safeguard Guidelines is obviously improper and has seriously undermined fair market competition. Although TAA canceled the original notice, it nevertheless issued another letter on May 24 of the same year to its branches. The letter requested the branches to notify the members that projects, whose construction license has been obtained or for which application has been filed, should be handled with care so as to avoid disputes or copyright right infringement. The Chiayi office of TAA even warned architects registering for the Project of the disputes involved in this case, resulting in their refusal to take the Project. According to our investigation, architect Li Meng-hsiung had inquired with TAA about the first notice when considering this Project, and had received DOE's explanation and guarantee. However, he declined to take this case after TAA's explanation. This indicated that the second letter issued by TAA, thought less forbidding in its tone, had the same effect as the first letter.
4. In this case, TAA first issued a letter, improperly, to request its member architects not to accept appointment for the Project. Although TAA's assistance was later withdrawn, TAA still took indirect measures to compel its member architects to turn down the Project. Therefore, such action of TAA was an improper measure that compelled other enterprises to participate in its concerted action. As a result, the design of the Project could not be completed and its benefits were negatively affected. Therefore, TAA's claim that it has not restricted competition, impeded market or price functions, or undermined consumer's interests is unacceptable. In conclusion, TAA's formulation of the Safeguard Guidelines and its action thereby have violated Article 19(iv) of the Fair Trade Law. Accordingly, a decree is hereby issued to TAA, in accordance with the first sentence of Article 41 of the Law, that it desist from the above action that impedes fair competition.
Summarized by Cheng P'eng-chi
Supervised by Ch'en Ming-huang
＠: For information of translation, click here
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