Fei Ma Ferry Co., Ltd. and the other four ferry operators that operate regular routes between Pingtung’s Dunggang and Hsiau Liouchiou have jointly determined the route schedule, thus have violated Article 14 of the Fair Trade Law

Chinese Taipei

Case:

Key Words:

ferry, concerted action

Reference:

Fair Trade Commission Decision of June 8, 2006 (the 761st Commissioners’ Meeting), Disposition Kung Ch’u Tzu No. 95095

Industry:

Ocean Water Transportation (5410)

Relevant Laws:

Article 14 of the Fair Trade Law

Summary:

1. This case originated from a received complaint indicating that Fei Ma Ferry Co., Ltd., Chun Yi Ferry Co., Ltd., Tung Hsin Ferry Co., Ltd., Ching Chiang Ferry Co., Ltd. and Kuan Kuang Ferry Co., Ltd., the five ferry operators that operate routes between Dunggang and Hsiau Liouchiou have proceeded to determine route schedules and sell tickets jointly without prior permission. Furthermore, the said operators took advantage of their dominant positions in the market either have arbitrarily delayed or suspended services without giving any prior notice between March 14, 2005 and March 17, 2005. Such conduct has seriously affected trading order and consumers’ interests, and probably has violated the Fair Trade Law.
2. Upon the investigation, the Fair Trade Commission (FTC) found the five ferry operators that operate routes between Dunggang and Hsiau Liouchiou have established “Joint Operation of Dunggang and Hsiau Liouchiou Line Ferry”. The purpose of such operation was to keep the operators away from competing with one another to provide services during the peak hours and no service during off-peak hours, which inevitably would affect the transportation rights and interests of Liouchiou residents. They jointly signed “Memorandum of Joint Operation of Dunggang and Hsiau Liouchiou Line Transportation Service” and “Agreement of Joint Operation of Dunggang and Hsiau Liouchiou Line Transportation Service”. In accordance with the aforementioned agreement, the office of joint operation had scheduled the daily routes of Dunggang and Hsiau Liouchiou line; the route schedule for each ferry company was then posted on the wharf’s signboard and a joint ticket booth was established at the wharf. It was obvious that the said five ferry operators indeed had reached consensus on the agreement of jointly scheduled the routes and sold tickets. It is evidence that the conduct of the aforementioned ferry operators, by means of “agreement” with any other competing enterprises to jointly determine the price of goods or services, or to limit the terms of quantity and thereby to restrict each other’s business activities. In addition, the investigation found that between March 14, 2005 and March 17, 2005, the services of three ferries (“Tung Hsin Ferry” and “Tung Sheng Ferry” run by private operator, “Hsin Tai Ferry” run by the government) were suspended for the reason of owing Pingtung County Government’s fishing port maintenance fees. However, the routes for both suspended private ferry operators have already been scheduled, and the other private operators that were scheduled for another hours were not willing to give their assistances (the cost of diesel oil for every ferry service was around NT$ 10,000), and thereby causing delays from the original schedules. Since 90% of the Liouchiou town’s 13,000 population regularly travel to and fro between Dunggang and Hsiau Liouchiou via ferries, and tourists have made more than 200,000 visits to Liouchiou town every year, but ferry is the only mode of transportation for getting in and out from Hsiau Liouchiou, hence, the traveling to and from Hsiau Liouchiou was seriously affected.
3. Grounds for disposition: By means of agreement, the aforementioned five private ferry operators have agreed with the conduct to restrict each other’s business activities, such as consensus on the number of scheduled routes services, restriction for each operator to decide its own service schedule and sharing of operating profit. Hence, the market competition was lessened and consumers’ selections were reduced. Such conduct was sufficient to affect the supply-demand of Dunggang and Hsiau Liouchiou Line sea transportation market and the transportation rights and interests of Liouchiou residents was seriously affected. The said conduct has violated Article 14 of the Fair Trade Law. Consequently, in accordance with the anterior paragraph of Article 41 of the Fair Trade Law, the five private ferry operators are ordered to cease the aforementioned unlawful acts, together with Fei Ma Ferry Co., Ltd., Chun Yi Ferry Co., Ltd., Tung Hsin Ferry Co., Ltd., and Ching Chiang Ferry Co., Ltd. are imposed with a fine of NT$ 180,000 each. A fine of NT$ 110,000 is imposed on Kuan Kuang Ferry Co., Ltd. because the operator has suspended service as a result of the ferry caught in fire and hence shorter duration of unlawful act.

Summarized by: Tsao, Hui-Wen
Supervised by: Chiang, Kou-Lun

Appendix:
Fei Ma Ferry Co., Ltd.’s Uniform Invoice Number: 91395039
Chun Yi Ferry Co., Ltd.’s Uniform Invoice Number: 91877964
Tung Hsin Ferry Co., Ltd.’s Uniform Invoice Number: 91882930
Ching Chiang Ferry Co., Ltd.’s Uniform Invoice Number: 91810155
Kuan Kuang Ferry Co., Ltd.’s Uniform Invoice Number: 90246378