Jiu Ru Parking Lot & Shi Quan Parking Lot

Case:

Key Words:

parking lot, parking fee, tour bus

Reference:

Fair Trade Commission Decision of January 4, 2012 (at the 1052nd Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 101002; Fair Trade Commission Decision of July 4, 2012 (at the 1078th Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 101082

Industry:

Parking Lots (5241)

Relevant Laws:

Article 14 of the Fair Trade Law

Summary:

1. The FTC received complaints about Jiu Ru Parking Lot and Shi Quan Parking Lot jointly sending notices to various hotels in Kaohsiung City that during the Chinese New Year holiday from February 3 to 7 the parking fee they charge for each tour bus would be 500 NT (the same currency applies hereinafter) dollars and starting from February 8 after the Chinese New Year the parking fee would be raised by 100% from 200 dollars to 400 dollars on weekdays and 500 dollars on Saturdays. The person who filed the complaint believed that the joint price increase by the two parking lots was in violation of the regulations against concerted actions set forth in Article 14 of the Fair Trade Law and therefore requested the FTC to initiate an investigation.
2. Findings of the FTC after investigation:
   1. The FTC's investigation revealed that the operator of Jiu Ru Parking Lot Mr. A started at the end of 2010 to urge the co-operators of Shi Quan Parking Lot Mr. B and Mr. C to stop making any destructive competition and both sides eventually reached an agreement on January 25, 2011 to increase the parking fee by 50 dollars and begin to charge the daily parking fee for 400 dollars on weekdays and 500 dollars on Saturdays, plus no more discount would be given. Mr. A also drew up the joint price increase statement, on which both parties applied their seals, and sent it to Holiday Garden Hotel, Shihzuwan Hotel, and Garden Plaza Hotel. The statement basically included that "a) The parking fee during the Chinese New Year Holiday from February 3 to 7, 2011 will be 500 dollars... b) Starting on February 8, 2011, the parking fee will be officially adjusted to 400 dollars on weekdays and 500 dollars on Saturdays…and this is a joint statement from Jiu Ru Parking lot and Shi Quan Parking Lot."
   2. Other findings showed that before February 8, 2011, Jiu Ru Parking Lot charged 350 dollars a day on weekdays and there were special offers between 200 and 300 dollars depending on the number of tour buses there were from the hotels and also because of market competition. Shi Quan Parking Lot also charged the same amount on weekdays but usually collected only 300 dollars depending on the number of buses from the hotels and the distances of the trips and even 200 dollars sometimes when the market competition was tough. However, after both parties reached the above agreement, the parking fee was raised to 400 dollars per day on weekdays and 500 dollars on Saturdays after February 8, 2011 and there were no more discounts. As a result of the joint price increase, other parking lots also followed suit. The tour bus parking spaces in the two said parking lots made up 31% of the tour bus parking service market in the downtown area of Kaohsiung City. Even if the unlicensed tour bus parking lots were included, the market share of the offenders still reached 25%.
3. Grounds for Disposition:
   The actual operator of Jiu Ru Parking Lot Mr. A and the co-operators of Shi Quan Parking Lot Mr. B and Mr. C met the description of "any other person or organization engaging in transactions through the provision of goods or services" set forth in Subparagraph 4, Article 2 of the Fair Trade Law. They were competitors on the horizontal level and the subjects in the concerted action. There was solid evidence of the way they reached the mutual understanding and the content of their mutual understanding, In addition, both parties also admitted to have jointly increased the tour bus parking fee. Therefore, the conduct belonged to "reaching the agreement to jointly increase the fees for their tour bus parking service." The conduct also led other parking lots to follow suit and subsequently pushed up the tour bus parking fees around the downtown area of Kaohsiung City. This is sufficient to affect the supply-demand function of the tour bus parking service market around the said area. As a result, the FTC concluded that the conduct was a concerted action as described in Article 7 of the Fair Trade Law and in violation of Paragraph 1, Article 14 of the same law, and therefore imposed an administrative fine of 300,000 dollars on Mr. A and 80,000 dollars separately on Mr. B and Mr. C.
   

Summarized by Shen, Li-Wei; Supervised by Liou, Chi-Jung