Approval of the joint operation of the Shipping Route of Donggang-Xiaoliuqiu Line

Case:

Key Words:

joint schedule, Donggang, Xiaoliuqiu

Reference:

Fair Trade Commission Decision of June 25, 2009 (the 920th Commissioners' Meeting), Disposition Kung Lian Tzu No. 098003

Industry:

Ocean Water Transportation (5010)

Relevant Laws:

The proviso of Article 14(i) and Article 15 of the Fair Trade Law

Summary:

1. Private transportation companies running the "Donggan-Xiaoliuqiu Line" applied to the Commission for concerted action on July 1, 2006. The Commission resolved in its 784th Commissioner's Meeting to approve the concerted action for three years with time limit (until July 1, 2009) and burdens attached pursuant to Article 15 of the Fair Trade Law. Since the approval is about to expire, the private transportation companies apply to the Commission for an extension on the approval in March 2009.
2. Background
   1. Xiaoliuqiu Island is located 8 nautical miles south west of Pingtung County; there are about 12,500 residences commuting for work, school, medical service, or shopping between Xiaoliuqiu to Donggang. Since there is neither an airport on Xiaoliuqui nor road directly connected to Taiwan island, external transportation and supplies on Xiaoliuqiu Island totally relies on commuting ships. On December 31, 1965, the Port of Kaohsiung approved Jingqiang Cruise Co. to establish the "Business Division for Donggang-Xiaoliuqiu Line," which was comprised of five cruise companies: Zhongyi, Dongxing, Guanguang, Jingqiang, and Feima. They arranged the daily schedule together and take turns running the line.
   2. On July 1, 2006, the Business Division for Donggang-Xiaoliuqiu Line applied to the Commission for an approval on the concerted action. According to the Fair Trade Law: "No enterprise shall have any concerted action; unless the concerted action that meets one of the following requirements is beneficial to the economy as a whole and in the public interest, and the application with the central competent authority for such concerted action has been approved. The Business Division for Donggang-Xiaoliuqiu Line can apply Article 14(1)(i) of the said law: "unifying the specifications or models of goods for the purpose of reducing costs, improving quality, or increasing efficiency." The concerted action includes: common schedule, ticket sales and single ticket. The Commission resolved in its 784th Commissioner's Meeting to approve the concerted action for three years with time limit (until July 1, 2009) and burdens attached pursuant to Article 15 of the Fair Trade Law.
3. Grounds for approval:
   The concerted action makes external traffic more convenient to residence and tourists. After the concerted action of common schedule, ticket sales and single ticket, consumers may freely choose the schedule and shipping company using a single ticket. There will be commuting ships available during peak or off-peak hours, thus benefiting consumers; in addition, the passenger-load rate for commuting ships will boost, making business operations more efficient. Besides, since the government subsidizes Liuxing Co., Ltd. on its East Liuxiu Line, consumers can also choose to ride the "Xintai" or "Jixiangruyi" ships instead; there are no obvious restrictions to competitions. In sum, it will benefit the overall economy and public welfare. Thus, the FTC extended the approval with burden attached pursuant to the laws. The FTC investigated the case and resolved by its 925th Commissioners' Meeting on June 25, 2009 to extend the approval from July 2, 2009 to July 1, 2012.

Appendix:
Zhongyi Shipping Co., Ltd.'s Uniform Invoice Number: 91877964
Pegasus Shipping Co., Ltd.'s Uniform Invoice Number: 91395039
Tongxin Shipping Co., Ltd.'s Uniform Invoice Number: 91882930
Jingqiang Shipping Co., Ltd.'s Uniform Invoice Number: 91810155
Guanguang Shipping Co., Ltd.'s Uniform Invoice Number: 90246378
Summarized by Luo, Ren-Yi; supervised by Liou, Chi-Jung