Chunghwa Telecom Co., Ltd. & SENAO International Co., Ltd.

Case:

Key Words:

competition restraint, mobile phone

Reference:

Fair Trade Commission Decision of March 29, 2007 (the 803rd Commissioners' Meeting)

Industry:

Telecommunications (6100)

Relevant Laws:

Article 6 ,11and 12 of the Fair Trade Law

Summary:

1. Chunghwa Telecom Co., Ltd. (hereinafter called "Chunghwa Telecom") is a Type I and II telecommunications enterprise whose major businesses are fixed network communications, mobile communications, data communications, and satellite communications services. SENAO International Co., Ltd. (hereinafter called "SENAO") is mainly an agency selling foreign and domestic mobile communication products and peripherals. Chunghwa Telecom planned to directly control the business operation and personnel appointment of SENAO by acquiring 31.5% shares of SENAO. Chunghwa Telecom's intention fell under the description of the merger type set forth in Article 6(1)(v) of the Fair Trade Law. In addition, currently Chunghwa Telecom has a significant market share of 36% in the mobile phone business market. Chunghwa Telecom and SENAO's sales amount for the previous fiscal year exceeded the threshold amount of merger reports publicly announced by the FTC. Therefore, Chunghwa Telecom filed a merger report to the FTC in accordance with Article 11(1) and (2) of the Fair Trade Law.
2. According to the FTC, the merger of Chunghwa Telecom and SENAO would not cause obvious changes to the market structure or concentration of the relevant markets. Both Chunghwa Telecom and SENAO could not significantly increase their market power by means of the merger. Additionally, the merger in question would not create a conspicuous obstacle for other enterprises to enter specific markets and would not have an effect on the likelihood for the competitors to trade with their trading counterparts. As a result, the FTC found that the advantage of the overall economic benefits brought by the merger of Chunghwa Telecom and SENAO would outweigh the disadvantage resulting from the competition restraints and therefore approved the merger report in accordance with Article 12 of the Fair Trade Law.

Appendix:
Chunghwa Telecom Co., Ltd.'s Uniform Invoice Number: 96979933
SENAO International Co., Ltd.'s Uniform Invoice Number: 12228473

Summarized by Tsai, Hui-Chi; Supervised by Chiang, Kou-Lun