Gateway, Inc. & Packard Bell B.V.

Case:

Key Words:

restrictive competition, personal PC, jurisdiction

Reference:

Fair Trade Commission Decision of November 22, 2007 (the 837th Commissioners' Meeting)

Industry:

Computer Integration Systems Services (6202)

Relevant Laws:

Article 6 , 11 and 12 of the Fair Trade Law

Summary:

1. Acer Inc. (hereinafter referred to as "Acer") and US company Gateway, Inc. (hereinafter referred to as "Gateway") attempted, via this merger, to acquire the brand names owned by the Dutch company Packard Bell B.V. (hereinafter referred to as "Packard") and also to promote the strategy of multi-brand marketing in order to strengthen the market position in Europe. Acer or Gateway would indirectly acquired 100% stock shares of the Dutch company Packard. In compliance with the Fair Trade Law, they should file a merger application to the Commission.
2. Findings of FTC after investigation: This merger fits into the specifications in Article 6(1)(ii) of the Fair Trade Law "where an enterprise holds or acquires the shares or capital contributions of another enterprise to an extent of more than one-third of the total voting shares or total capital of such other enterprise", besides Acer has the 26.1% market share of domestic NB market in year 2006 and this meets the threshold for merger filing requirements under Article 11(1)(ii) of Fair Trade Law. In addition, according to Article 7(1)(ii) of the Enforcement Rules to the Fair Trade Law and Provision 5(2) of "The principles for managing the extraterritorial merger by the Fair Trade Commission of the Executive Yuan", the applicant Acer should file a merger report.
3. Sales of personal PC (desktop and notebook) and other accessories are the main business of US company Gateway and Dutch company Packard, however, both companies do not sell the same products in the country, and would not have horizontal nor vertical competition in the country. In addition, Gateway and Packard do not own any branch or subsidiary company in the country, and they have neither intention nor planning to import any products of Gateway or Packard to the country. According to Provision 3(2) of "The principles for managing the extraterritorial merger by the Fair Trade Commission of the Executive Yuan": "If none of the combining enterprises in an extraterritorial merger case has production or service facilities, distributors, agents, or other substantive sales channels within the territorial domain of the Chinese Taipei, jurisdiction shall not be exercised". Since, the participants of the merger in our country, the US company Gateway and Dutch company Packard do not own any service of branch, subsidiary company, or other actual sales channels in the country. In this case, there is no jurisdiction should be exercised.

Summarized by Chen, Haw-Kae; Supervised by Liou, Chi-Jung