MiTAC International Corporation & Tyan Computer Corporation

Case:

Key Words:

economic benefits, competition restraint, merger

Reference:

Fair Trade Commission Decision of May 24, 2007 (the 811th Commissioners' Meeting)

Industry:

Other Computer Peripheral Equipment Manufacturing (2719)

Relevant Laws:

Article 6,11and 12 of the Fair Trade Law

Summary:

1. MiTAC International Corporation (hereinafter called "MiTAC") filed a merger report to the FTC regarding its intention to merge with Tyan Computer Corporation (hereinafter called "Tyan") in terms of the provisions of the Fair Trade Law; the reorganization would be done, and MiTAC remained unchanged.

2. Findings of FTC after investigation showed that the merger in this case fell under the type, "where an enterprise and another enterprise are merged into one," as set forth in Article 6(1)(i) of the Fair Trade Law. Additionally, the threshold amount of the sales of MiTAC and Tyan in 2006 exceeded the threshold promulgated by the FTC – it had already reached the threshold for the filing of the merger report set forth in Article 11(1)(iii) of the Fair Trade Law. Therefore, such a merger shall be reported to the FTC. The enterprises of the merger, MiTAC and Tyan, were the applicants in this case, and the FTC accepted to handle their application.

3. After this merger, the enterprises of the merger are still under restraint of market competition – they hardly have the ability to unilaterally raise prices of products or service remuneration. In the same way, in spite of the companies, Foxconn Electronics Inc., Wilstron Corporation, Quanta Computer Inc., Inventec Corporation, Micro-star International, AsusTeK Computer Inc. and other small companies participating in the competition, international companies, American, Japanese and Korean transnational corporations or joint ventures also participate in the competition, and they even control the technologies of middle- and high-level products. After the merger, there are still a lot of market competitors and there has not been an obvious alteration of the market structure. On the other aspect, there is no constructive evidence sufficient to regard that the enterprises of the merger and their competition may cause the anxiety that there is no competition in the market by mutual restraints of business activities or behaving consistently. In addition, new competitors have no entry barriers and the ability of trading counterparts or potential trading counterparts to counterbalance the enterprises of the merger against the raise of prices of products or service remuneration is still high. Therefore, the overall economic benefits brought by the merger in this case would outweigh the disadvantage resulting from the competition restraints. Therefore, the FTC found that the merger of MiTAC and Tyan, in accordance with Article 12 of the Fair Trade Law, was not prohibited.

Appendix:
MiTAC International Corporation’s Uniform Invoice Number: 44255708
Tyan Computer Corporation’s Uniform Invoice Number: 84753833

Summarized by Peng, Wei-Cheng; Supervised by Liou, Chi-Jung