Inquiry by the Ministry of Economic Affairs (MOEA) regarding whether or not it is in violation of the Fair Trade Law for the MOEA, as per the instruction of the Cabinet, to appoint CETRA as the operator of the exhibition building situated in the TWTC Nankang Exhibition Complex, the construction of which is currently under planning
Chinese Taipei
Case:
Inquiry by the Ministry of Economic Affairs (MOEA) regarding whether or not it is in violation of the Fair Trade Law for the MOEA, as per the instruction of the Cabinet, to appoint CETRA as the operator of the exhibition building situated in the TWTC Nankang Exhibition Complex, the construction of which is currently under planning
Key Words:
commissioning of administrative affairs, public policy, market position, BOT
Reference:
Fair Trade Commission Decision of September 17, 1998 (the 356th Commission Meeting); Letter (87) Kung Er Tzu No. 8704316-003
Industry:
Government agencies (9111)
Relevant Laws:
Summary:
According to the MOEA, it has a project to construct the TWTC Nankang Exhibition Complex (the project) comprising an exhibition building, a tourists' hotel, and other commercial entertainment facilities. The project will be carried out on a BOT basis. However, with regard to the exhibition building, the MOEA specifically requires through contract with the private investors that CETRA will be given the "first priority" as the operator of the exhibition building. The MOEA inquires whether such a "first priority" appointment is in violation of the Fair Trade Law (FTL).
Due to the lack of legal basis for the MOEA's requirement that CETRA be given the first priority as the operator of the exhibition building, FTL Article 46(1) which exempts the application of the FTL, cannot not apply. The MOEA's action of commissioning private investors for the construction of the Nankang Exhibition Complex is a commissioning of administrative matters and should be governed by the FTL.
The project, which is currently being planned by the MOEA and will be carried out on a BOT basis, shall consist of an exhibition building, a tourists' hotel and other business entertainment facilities. According to its articles of incorporation, CETRA's business is limited to providing assistance to businesses in developing their overseas markets. CETRA cannot participate in the bidding for the project. All bidding companies are required by the MOEA to give the first priority to CETRA to operate the exhibition building if they are eventually awarded the bid. As far as the bidding businesses are concerned, the provision of FTL Article 19(ii) does not apply to such an act of appointment.
The MOEA requires that CETRA be given the first priority to be appointed as the operator of the exhibition building. In form, this requirement involves the imposition of improper restrictions on trading counterparts' business activities as a condition of transacting business with them, as referred to under FTL Article 19(iv). Whether the restriction imposed is improper shall be determined based on concrete evidence. CETRA has been established in line with this economy's external trade policy and the policy to promote industries by helping domestic businesses explore overseas markets through methods such as organizing trade exhibits. In order to operate the Nankang exhibition building in compliance with government policy, the MOEA has planned to appoint CETRA as the operator. The Fair Trade Commission (this Commission) understands the MOEA’s position. However, given CETRA's prominent position in the market of trade exhibits and the absence of a specific implementation plan for the project, there is insufficient information available to evaluate whether the said appointment is beneficial to the economy as a whole or whether it will instead bring the disadvantage of restricting competition. Therefore, this Commission finds it difficult to conclude whether there involves the imposition of improper restriction on the trading counterparts' business activities in violation of FTL Article 19(iv).
Summarized by Luo, Mei-Hsia
Supervised by Tzuo, Tien-Liang