Lifting Service Operators in Hualian County

Case:

Key Word(s):

Concerted action, market supply and demand, price increase

Reference:

Fair Trade Commission Decision of March 20, 2013 (the 1115th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 102039

Industry:

Rental and Leasing of Other Transport Equipment (7729)

Relevant Law(s):

Article 14(1) of the Fair Trade Law

Summary:

1. The FTC received from private individuals complaints about the lifting service operators in Hualian County jointly raising the charge from NT$2,000 per hour to N$2,500 due to gasoline price increase. However, after the gasoline price fell back down to around NT$32 per liter, the above-mentioned lifting service operators did not reduce the charge rates back to the original standards. The informers believed that the above conduct was in violation of the Fair Trade Law.
2. Findings of the FTC after investigation:

   The result of the FTC's investigation showed that 8 lifting service operators in Hualian County, namely San Tong Lifting Engineering Co., Ltd., Tong Jie Mechanical Engineering Co., Ltd., Chang Xiong Mechanical Engineering Co., Ju Ye Lifting Engineering Co., Ltd., Dong Jian Transport Enterprise Co., Ltd., Da Tong Lifting Engineering Co., Hong Wei Lifting Engineering Co. and Da Xiong Mechanical Engineering Co., had met in a hotel in April 2012 to discuss ways to cope with the rises of fuel, tire, engine oil and hydraulic oil prices. During that meeting, they reached a consensus to raise the first hour charge for cranes with the capacity of lifting up to 25 tons to NT$2,000 and NT$1,200 per hour from the second hour onward, as well as the first hour charge for cranes with the capacity of lifting up to 45 tons to NT$4,000 and NT$2,000 per hour from the second hour onward, effective from early May.

3. Grounds for disposition:
   

   It would have been justifiable if the 8 operators involved in the concerted action had acted independently to adjust their prices according to their own costs, the supply and demand of the market, and their own management strategies. Instead, they had chosen to make price decisions together and the conduct caused other competitors to follow suit. The number of cranes owned by the 8 operators in concern accounted for at least 74% of the total number of cranes in Hualian County. As a result, their joint price increase decision and restriction on the business activity of one another were able to affect the supply-demand function of the lifting service market in Hualian County. The said conduct was in violation of Article 14 (1) of the Fair Trade Law. In addition to ordering the said operators to cease their unlawful act, the FTC also imposed an administrative fine of NT$200,000 on each of San Tong Lifting Engineering Co., Ltd. and Tong Jie Mechanical Engineering Co., Ltd., 150,000 on Chang Xiong Mechanical Engineering Co., and 50,000 on each of Ju Ye Lifting Engineering Co., Ltd., Dong Jian Transport Enterprise Co., Ltd., Da TongLifting Engineering Co., Hong Wei Lifting Engineering Co., and Da Xiong Mechanical Engineering Co.

Appendix:
San Tong Lifting Engineering Co., Ltd.'s Uniform Invoice Number: 94744665
Tong Jie Mechanical Engineering Co., Ltd.'s Uniform Invoice Number: 23687636
Chang Xiong Mechanical Engineering Co.'s Uniform Invoice Number: 70957189
Ju Ye Lifting Engineering Co., Ltd.'s Uniform Invoice Number: 94810539
Dong Jian Transport Enterprise Co., Ltd.'s Uniform Invoice Number: 94814599
Da TongLifting Engineering Co.'s Uniform Invoice Number: 2098310
Hong Wei Lifting Engineering Co.'s Uniform Invoice Number: 08145134
Da Xiong Mechanical Engineering Co.'s Uniform Invoice Number: 92093498