Mr. Chien, Pin-Shun

Case:

Key Words:

restrain competition or obstruct fair competition, school lunch

Reference:

Fair Trade Commission Decision of September 3, 2008 (the 878th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 097123

Industry:

Other Food and Beverage Services (5690)

Relevant Laws:

Article 19(iv) of the Fair Trade Law

Summary:

1. This case was initiated based on a letter sent to the Commission by the complainant on June 24, 2008. The letter complained that 16 out of 18 members of the Changhua County Commercial Association of Meal Box & Food (hereinafter referred to as "Meal Box & Food Association") formed the "168 Association." The chairman of the association, Mr. Chien, Pin-Shun, circulated a letter to all members on June 4, 2008, and required that "all members of the 168 Association may not sign any subcontractor agreement for enterprises which have not yet joined the 168 Association. If any member violated this rule, and helps a non-member enterprise sign the agreement, as well as such a misdeed is verified, the 168 Association would impose a fine of NT$ 50,000 on such a member." The chairman's act concerned violation of the relevant provisions of the Fair Trade Law.
2. The findings of FTC after investigation: It showed that the 16 members of the "168 Association" are food (lunch boxes) factories, companies, and business entities that provide meal boxes and services and engage in business transactions in Changhua County. After the establishment of the 168 Association, these factories, companies, and business entities elected Chien, Pin-Shun to serve as the chairman, the only position established in the association. Mr. Chien was authorized to make an overall plan for the operation of activities and collect membership fees. However, on June 4, 2008, Mr. Chien faxed the aforesaid letter to members of the "168 Association," and required in the letter that these members might not sign any subcontractor agreement for non-members of the association, and any member which violated the rule would be fined for NT$ 50,000. "Subcontractor" is an important evolution consideration for the item "Emergency Response Ability" (approximately 10% of the total mark) listed in the grading table of acquisition and purchase of meal boxes outside school for the year of 2008 formulated by the 33 junior high schools and elementary schools located in Changhua County. As "subcontractors" were the grading consideration of the item "Emergency Response Measures" for the past years for enterprises took part in tenders for junior high/ elementary school lunch. Enterprises of meal box in the county also all listed subcontractors as the content of emergency response measures. The letter issued by Chien, Pin-Shun and his act shall be considered sufficient to obstruct the other two enterprises, which had not yet joined the association, from participating in fair competition. Mr. Chien's act was reprehensible in terms of commercial ethics, and caused detrimental impacts on effect competition. In the same way, it had already affected the association's members' autonomy to make decisions in choosing subcontractors. The act was sufficient for the Commission to believe that Mr. Chien's act had the effect of restraining competition or obstructing fair competition.
3. Grounds for Disposition: Chien, Pin-Shun issued a letter requiring that the association's members not to sign any subcontractor agreement for enterprises which had not yet joined the association, and any member which violated the rule would be fined for NT$ 50,000. The tricks in his act were highly reprehensible in terms of commercial ethics, and sufficient to affect the association's members' autonomy to decision making. With respect to Mr. Chien's act of making other enterprises participate in a concerted action through the improper means, there had been a concern that the act would restrain or obstruct fair competition of the meal box market of junior high schools and elementary schools in Changhua County, and the act was found violating Article 19(iv) of the Fair Trade Law. Accordingly, Chien, Pin-Shun was imposed with an administrative fine of NT$ 250,000 pursuant to the fore part of Article 41 of the Fair Trade Law.

Summarized by Kuo, An-Chi; Supervised by Hung, Hsiu-Hsing