Tourist Bus Association of Taiwan Province

Case:

Key Words:

tourist bus, resolutions of Board of Directors, raising transportation charges

Reference:

Fair Trade Commission Decision of January 11, 2007 (the 792nd Commissioners' Meeting); Disposition (96) Kung Ch’u Tzu No. 096007

Industry:

Other Bus Transportation (4939)

Relevant Laws:

Article 14 of the Fair Trade Law

Summary:

1. This case originated from the second meeting minutes of the 11th Tourist Bus Association of Taiwan Province (hereinafter called the "Tourist Bus Association") submitted by the Taiwan Provincial Government. According to said meeting minutes, the resolution for the fourth proposal was to "request the association of each county/city to invite business operators and mobile license lessees to jointly raise transportation charges. Licenses will be denied or licensing fees raised for those who refuse to do so." The Tourist Bus Association additionally mailed said meeting minutes as Letter (94) Shen-Yo-Ke-Lien Tzu No. 284 issued on October 3, 2005 to each director and association of each county/city. Since the intention of said proposal might meet the descriptions of prohibited concerted action, the FTC initiated an investigation.
2. Findings of FTC after investigation: Due to constantly rising gas price, economic depression, oversupply of tourist buses and price war started by license lessees, the Tourist Bus Association submitted said proposal during the second meeting of the Board of Directors of the 11th Tourist Bus Association at Taipei Cosmos Hotel on September 29, 2005 to reflect the difficulty encountered by its members. During the meeting, no objection was shown against the proposal. Therefore, a resolution was made. It was hoped that through the execution of this resolution, transportation charges would be raised and price war avoided.
3. Grounds for disposition: The Tourist Bus Association had 62% of market share of domestic tourist bus transportation service market. Therefore, the act that the Tourist Bus Association employed a resolution to request business operators and license lessees to jointly raise transportation charges has affected the supply and demand of domestic tourist bus transportation service market and restrained tourist bus business operators from freely deciding on prices. Such an act has also restrained enterprises from taking favorable prices, quantity, quality, service or other conditions to strive for trading opportunities and weakened the competition mechanism of the market. It has met the descriptions of "concerted action" set forth in Article 7 of the Fair Trade Law and violated Article 14(1) of the Fair Trade Law. The FTC therefore imposed an administrative fine of NT$500,000 in accordance with Article 41 of the same Law.

Appendix:
None

Summarized by Jan, Lih-Ling; Supervised by Chiang, Kou-Lun