Fuyang Media Co. Ltd.

Case:

Key Words:

cable TV, joint operation, direct control, appointment or discharge of personnel

Reference:

Fair Trade Commission Decision of July 19, 2007 (the 819th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 096124

Industry:

Cable and Other Subscription Programming (6022)

Relevant Laws:

Article 11(1) ,13(1) and 40(1) of the Fair Trade Law

Summary:

1. The FTC respectively received the complaints from the general public against the current North Coast Cable TV Corp. (hereinafter called “North Coast”) and Mangrove Cable TV Corp. (hereinafter called “Mangrove”), both of the enterprises were located in Danshuei Township, Taipei County. When the general public phoned Mangrove to make an installation request, such a company informed that the area of installation fell within the business territory of North Coast and it could not step in such a territory for service. Nevertheless, when they phoned North Coast for cable TV installation applications, the installation staffs yet provided the dispatch list of Mangrove. Additionally, as for the current Yeong Jia Leh Cable TV Co., Ltd. (hereinafter called “Yeong Jia Leh”) and Shin Ho Cable TV Co. Ltd. (hereinafter called “Shin Ho”) in Hsinchuang Township, Taipei County, when the general piblic phoned Yeong Jia Leh, such a company informed them to call the other telephone number; unexpectedly the receiver of the call was the staff of Shin Ho. The enterprises had indicated, in the same way, that lines of communication had not been set up in certain areas and therefore, they were unable to provide services. Nevertheless, they in fact removed the original lines instead. Therefore, the FTC immediately conducted investigations on two cases: the one case in Danshuei Township, Taipei County and the other one Hsinchuang Township of the same county.
2. Findings of FTC after investigation:
   • Fuyang Media Co. Ltd. (hereinafter called “Fuyang”) filed a merger report to the FTC for owning 74% shareholding of North Coast in 2002 and the FTC held that it did not prohibit the merger. Additionally, Fuyang controlled the business operation and personnel appointment and dismissal of Mangrove directly or indirectly by taking on all of the positions as directors and supervisors in Mangrove from February 17 to June 1, 2003. As a result, Fuyang shall file a merger report, but it did not; it violated Article 11(1) of the Fair Trade Law and had undergone a discriplianry action in accordance with the resolution passed in the 646th Comissioners’ Meeting on March 25, 2004. However, it was found that on December 31, 2004, Fuyang, on behalf of Mangrove, concluded “Agreements on Transmission of Basic Frequency Channels” and “Agreements on Public Transmission of Cable TV” with related channels providers (agents), Tung Ho Multimedia Co. Ltd. and Chung T'ien Television, for the first half of the year 2005; and Fuyang which received a majority vote to take on the positions as directors and supervisors in Mangrove, sent its staffs to hold these concurrent positions in April 2005. Substantially, Fuyang still retained control over Mangrove; it could directly or indirectly control the business operation and personnel appointment and dismissal of it. Therefore, Fuyang did not modify its acts or adopt necessary correction measures in accordance with FTC Disposition (94) Kung Ch’u Tzu No. 093034 dated March 26, 2004.
   • Fuyang controlled the business operation and personnel appointment and dismissal of Shin Ho directly or indirectly by taking on all of the positions as directors and supervisors in Shin Ho from March 12 to July 7, 2003. As a result, Fuyang must file a merger report but it did not; it violated Article 11(1) of the Fair Trade Law and had undergone a discriplianry action in accordance with the resolution passed in the 646th Comissioners’ Meeting on March 25, 2004. However, it was found that Hsin Ho’s and Yeong Jia Leh ‘s staffs were working in the same place and Hsin Ho’s facilities in the head control room was not yet in full operation. In the same way, it was found that on December 31, 2004, Fuyang, on behalf of Hsin Ho, concluded “Agreements on Transmission of Basic Frequency Channels” and “Agreements on Public Transmission of Cable TV” with related channels providers (agents), Tung Ho Multimedia Co. Ltd. and Chung T'ien Television, for the first half of the year 2005; and Fuyang which received a majority vote to take on the positions as directors and supervisors in Hsin Ho, sent its staffs to hold these concurrent positions in April 2005. Substantially, Fuyang still retained control over Hsin Ho; it could directly or indirectly control the business operation and personnel appointment and dismissal of it. Therefore, Fuyang did not modify its acts or adopt necessary correction measures in accordance with FTC Disposition (94) Kung Ch’u Tzu No. 093034 dated March 26, 2004.
3. Grounds for disposition:
• In accordance with the findings of FTC after investigation, after Fuyang underwent a discriplianry action in accordance with the FTC’s Disposition (94) Kung Ch’u Tzu No. 093034 dated March 26, 2004, it still directily and indirectly controlled the business operations or appointment or dismissal of personnel of Mangrove and Shin Ho but did not modify its acts or adopt necessary correction measures in accordance with the content of the aforesaid Disposition. Hence, Fuyang violated Article 11(1) of the Fair Trade Law.
• After considering the operating revenue of Fuyang, motive of the unlawful acts of Fuyang, the degree of the unlawful acts' harm to market order, the benefits derived on account of the unlawful acts, the intervals between past violations and the attitude after the investigation, the FTC ordered Fuyang to move the related staffs to other positions which held no substantial control over Fuyang, Mangrove and Shin Ho, other than the origianl positions, within three months of the second day after the day when Fuyang received the Disposition in accordance with Articles 13(1) and 40(1) of the Fair Trade Law. An administrative fine of NT$ 4,000,000 was imposed for each of the two cases.

Appendix:

Fuyang Media Co. Ltd.'s Uniform Invoice Number: 16741402
Summarized by Chang, Hsin-yi; supervised by Chiang, Kuo-lun