5 LPG Stations in the Greater Taipei Area

Case:

Key Word(s):

LPG station, LPG for autos, discount for cash payments

Reference:

Fair Trade Commission Decision of January 30, 2013 (the 1108th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 102016

Industry:

Retail Sale of Other Fuel Products in Specialized Stores (4829)

Relevant Law(s):

Article 14(1) of the Fair Trade Law

Summary:

1. The FTC received complaints from private individuals about joint cancellation of discounts for cash payments by five private LPG stations effective from April 2, 2011 in the greater Taipei area. However, the result of the FTC investigation revealed that 10 other private LPG stations had also participated and therefore the FTC decided to extend its investigation.
2. Findings of the FTC after investigation:
   

   There were 15 private LPG stations in the greater Taipei area and 13 of them had offered discounts for payments made in cash before Apr. 1, 2011. The investigation revealed that the operators of 10 private LPG stations had attended a meeting held by the LPG Station Association on March 22, 2011. When having a meal together, some operators proposed that all the LPG stations cancelled the discounts for cash payments and none of the others objected to the proposal. Afterwards, except for one station that continued to give discounts for cash payments, the remaining 9 stations cancelled the discounts effective from April 2011. Apparently, the cancellation was the result of the mutual understanding established by the said LPG station operators. Therefore, the FTC concluded that the said 9 operators were responsible for the conduct in question.

3. Grounds for disposition:
   

   The private LPG station operators met and established the mutual understanding to cancel the discounts for cash payments. It was a concerted action to not engage in price competition. As the said 9 LPG stations accounted for 64.7% of the auto LPG sold in the greater Taipei area, the cancellation of discounts of NT$1-2 per liter effective from Apr. 2011 had affected the supply-demand function of the auto LPG retail market in the greater Taipei area and was in violation of the regulation against concerted actions set forth in Article 14 (1) of the Fair Trade Law. Acting according to the first section of Article 41(1) of the Fair Trade Law, the FTC ordered the said parties to immediately cease their unlawful act and also imposed on them administrative fines ranging from NT$100,000 to NT$360,000. The fines totaled to NT$2.06 million.

Appendix:
Liu Tong Development Co., Ltd.'s Uniform Invoice Number: 70378082
Rui Shan Autos LPG Filling Station Co., Ltd.'s Uniform Invoice Number: 16330442
Greater Taipei Filling Station Co., Ltd.'s Uniform Invoice Number: 28772597
Sure Service Station Co., Ltd.'s Uniform Invoice Number: 22745790

Summarized by Hung, Chin-An; Supervised by Sun, Ya-Chuan