Kang Hsuan Educational Publishing Corp., Nani Books Corp. and Han Lin Publishing Co. Ltd.

Case:

Key Words:

textbook, gift

Reference:

Fair Trade Commission Decision of April 26, 2007 (the 807th Commissioners' Meeting); Disposition (96) Kung Ch'u Tzu No. 096084, 096085 and 096086

Industry:

Books Publishing (5813)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. This case originated from the complaints stating that: A portion of textbooks publishers provided a lot of goods to lure teachers in order to seize the opportunity to sell their textbooks during the period of textbook selection by junior high schools and primary schools in the academic year, 2006 – they constituted improper marketing practices.
2. Findings of FTC after investigation: During the period of textbook selection by junior high schools and primary schools in the academic year, 2006, Kang Hsuan Educational Publishing Corp. (hereinafter called "Kang Hsuan Corporation") provided exquisite bicycle models which could be placed for decoration for teachers, Nani Books Corp. (hereinafter called "Nani Corporation") provided correction seals that had no substantial benefits to teaching and Han Lin Publishing Co. Ltd. (hereinafter called "Han Lin Company") provided satellite navigation discs and 20 extracurricular books.
3. Grounds for disposition:
1. After the market of junior high school textbooks was opened up, it was continually heard that in order to seize sales opportunities and continue to maintain the market share, publishing enterprises competed to each other in the investment of teaching tools and gifts and adopted the marketing strategy, giving teaching tools and gifts for free. In order to guard against textbooks publishers from constituting improper marketing practices, the FTC stipulated "Fair Trade Commission Policy Statements on the Distribution of Elementary School Textbooks" which lists acts that constitute violations of the Fair Trade Law. The regulation is to be applied and complied by the textbook enterprises.
2. As under the current system, school teachers have the right to select textbooks, but the purchases are students or parents; therefore, if publishers provide or claim to provide improper gifts for people who have the right to select textbooks, either act may affect the decision-making process and decision of the school teachers. Therefore, in order to ensure fairness in the selection of textbooks, the FTC stipulated in the aforementioned Policy Statement that textbooks publishers were prohibited from providing improper money, items or other economic benefits to the school teachers. As for the issue regarding to whether an item given for free is "improper," the determining factor is whether the item given for free is irrelevant to the teaching of specific textbooks." If the free item provided by the textbook enterprises is indeed unnecessary for the teaching of specific textbooks, the item given for free does not fall under the supplementary teaching aids which are directly linked to the teaching of specific textbooks.
3. As the abovementioned gifts, bicycle models, correction seals, satellite navigation discs and extracurricular books provided by three publishers were all indeed unnecessary for teaching and were not directly linked to the teaching of specific textbooks, they showed the circumstance that the publishers concerned provided improper goods for teachers in order to seize the opportunity for teachers' selection of their textbooks – such obviously unfair acts were sufficient to affect trading order and therefore the publishers violated Article 24 of the Fair Trade Law. After considering the relevant factors, the market share of these three enterprises, the types and numbers of past violations, the FTC ordered Kang Hsuan Corporation, Nani Corporation and Han Lin Company to cease the aforesaid unlawful acts and imposed an administrative fine of NTD$2,500,000, NTD$2,000,000 and NTD$1,500,000 respectively in accordance with the fore part of Article 41 of the Fair Trade Law.

Appendix:
Kang Hsuan Educational Publishing Corp.'s Uniform Invoice Number: 23142092
Nani Books Corp.'s Uniform Invoice Number: 68461979
Han Lin Publishing Co. Ltd.'s Uniform Invoice Number: 69382361

Summarized by Lin, Hsin-Wen; Supervised by Wu, Pi-Ju