TTET Union Corporation and 5 Other Corporations

Case:

Key Words:

soybean, joint import

Reference:

Fair Trade Commission Decision of November 22, 2007 (the 837th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 096175

Industry:

Edible Oils and Fats Manufacturing (0840)

Relevant Laws:

Article 14(1) of the Fair Trade Law

Summary:

1. This case is about the standards on soybean import. To reduce import purchase cost, soybean importers, according to Article 14(1)(v) of the Fair Trade Law, apply to the Commission for permission to the exception of concerted action on joint importation. Five soybean importers, TTET Union Corporation (hereinafter referred to as "TTET"), Uni-President Enterprises Corporation (hereinafter referred to as "Uni-President"), Great Wall Enterprise Co., Ltd., Tai Hwa Oil Industrial Co., Ltd., and Mei-Lan-Le Co. Ltd. soybean applied to the Commission for permission to the concerted act of joint importation of soybean. The last validity date of the permission was December 31, 2006. After the expiration, this Commission did not receive TTET's application for extending the permission after the afore-mentioned valid date. To understand whether there is violation of concerted action, the Commission proactively raised the case for investigation.
2. Findings of the Commission after investigation: the total market share of TTET and 4 other soybean importers are 53.83%、48.68%, and 48.45% in the years of 2004, 2005, and 2006 respectively. TTET and Uni-President are also the Number 1 and 2 soybean importers in the country. TTET and the others continuously imported soybeans on June 25 and July 25, 2007 for two times, and the total imported quantity were 56,440 and 58,951 tones respectively.
3. Grounds for disposition:
   (1)According to Article 7 and 14(1) of the Fair Trade Law, should enterprises with competitive relation, by means of mutual understanding, jointly determine the price of goods or services, or to limit the terms of quantity, trading counterparts, trading territory, or other conducts which mutually restrict business activities, and the result is sufficient to influence the supply in the market, it would be deemed to have violated the restriction on concerted actions in the Fair Trade Law. TTET and the other 4 soybean importers by means of mutual understanding to jointly bulk import soybean, is in substance a concerted action regulated in Article 14(1) of the Fair Trade Law. Unless the action falls into one of the seven exceptions listed in the same Article and the parties applied to the Commission for permission prior to the action, it would be deemed to be an infringement of the Law.
   (2)In this case, TTET and the other 4 soybean importers had applied to the Commission for the permission to jointly bulk import soybeans and the valid date of the last permission was December 31, 2006. In accordance with Article 15(2) of the Fair Trade Law, if TTET and the other 4 soybean importers have reasonable grounds, they can apply to the Commission for an extension of the permit 3 months prior to the valid date (i.e. before December 31, 2006). TTET and the others failed to apply for an extension on the permission prior to the valid date; therefore they are not allowed to continue the concerted action of jointly bulk import of soybeans after the aforementioned valid date.
   (3)However, TTET and the other 4 soybean importers continued to jointly bulk import soybeans on June 25 and July 25, 2006 respectively. Since the aforesaid twice joined bulk import of soybeans occurred after the valid date of the permission for concerted action, and the aforementioned twice joined bulk import of soybeans constitute a concerted action whereby enterprises, by means of mutual understanding, imported overseas goods, and mutually restrict one another's business activities, and is sufficient to influence the functioning of the soybean import market in the country, it is determined that they violate the regulations on restrictions of concerted actions prescribed in Article 14(1) of the Fair Trade Law.
   (4) The Commission took into consideration of the facts that TTET and the other 4 soybean importers are large-scaled soybean importers and take up almost half of the market share, amongst which TTET and Uni-President are No. 1 and 2 soybean importers in the nation, but continuously engaged in unlawful action of joined bulk import during the unusual shift of soybean market price in 2007 for two times, and, decided their concerted action is sufficient to influence the operation of the domestic soybean import market, and shall be seriously penalized. The Commission therefore ordered TTET and the other 4 soybean importers to cease such unlawful act and fined each of them for NT$ 5 million, a total of NT$ 25 million fine.

Appendix:
TTET Union Corporation's Uniform Invoice Number: 20927014
Uni-President Enterprises Corporation's Uniform Invoice Number: 73251209
Great Wall Enterprise Co., Ltd.'s Uniform Invoice Number: 73008303
Tai Hwa Oil Industrial Co., Ltd.'s Uniform Invoice Number: 75452103
Me-Lan-Le Co., Ltd.'s Uniform Invoice Number: 23670889

Summarized by Chiang, Hui-Yi; Supervised by Wu, Pi-Ju