Taiwan Taxi Corporation & 4 other Taxi Companies

Case:

Key Word(s):

Merger, taxi dispatch service, direct control, business operations

Reference:

Fair Trade Commission Decision of June 11, 2014 (the 1179th Commissioners' Meeting); Dispositions Kung Ch'u Tzu No.103077, No.103078 and No.103079

Industry:

Taxi Transportation (4932)

Relevant Law(s):

Article 11(1) of the Fair Trade Law

Summary:

1. Taiwan Taxi Corporation was complained for merging with Daai, Fuxie and Fanya Taxi Fleets in March and May, 2013, gaining 43% and 69% market share nationwide and in the greater Taipei area, respectively, but was suspected of violating the Fair Trade Law by failing to file a pre-merger notification to the FTC.
2. Findings of the FTC after investigation:
   Taiwan Taxi Corporation controls 70% of Longxing Taxi Company’s shares and directly controls its business operation and the appointment and discharge of personnel, meeting the description of merger set forth in Subparagraphs 2 and 5 of Article 6(1) of the Fair Trade Law. Taiwan Taxi Corporation signed an agreement through Longxing Taxi Company with Longdian Taxi Company, which operated Daai Taxi Fleet, and Huangxing Taxi Company, which operated Fuxie Taxi Fleet, for Longxing Taxi Company to operate the taxi dispatch services of Longdian Taxi Company and Huangxing Taxi Company and use their assets (i.e. Daai Taxi Fleet and Fuxie Taxi Fleet) for 5 years. Taiwan Taxi Corporation indirectly controlled Longdian Taxi Company and Huangxing Taxi Company through Longxing Taxi Company, meeting the description set forth in Subparagraphs 3 and 5 of Article 6(1) of the Fair Trade Law. Furthermore, Taiwan Taxi Corporation signed an agreement with Fanya Taxi Company to operate the taxi dispatch services of Fanya Taxi Company and use its assets (i.e. Fanya Taxi Fleet) for 5 years, allowing Taiwan Taxi Corporation to directly control the business operation of Fanya Taxi Company. This merger met description set forth in Subparagraphs 3 and 5 of Article 6(1) of the Fair Trade Law. Taiwan Taxi Corporation had 1/4 of the taxi dispatch service market and reached the threshold for filing a pre-merger notification according to Article 11(1)(ii) of the Fair Trade Law. Taiwan Taxi Corporation did not meet any of the exemptions set forth in Article 11-1 where Article 11(1) would not apply.
3. Grounds of disposition:
   

   Taiwan Taxi Corporation violated Article 11(1) of the Fair Trade Law by failing to file pre-merger notifications to the FTC. Considering that this was the first violation of Taiwan Taxi Corporation in terms of revenue and market share, and that taxies were disadvantaged when competing with mass transportation, the FTC imposed fines of NT$1.5 million on Taiwan Taxi corporation, NT$200,000 on Longxing Taxi Company, NT$150,000 on Longdian Taxi Company, NT$100,000 on Huangxing Taxi Company, and NT$100,000 on Fanya Taxi Company.

Appendix:
Taiwan Taxi Corp.'s Uniform Invoice Number: 27767961
Longxing Taxi Company's Uniform Invoice Number: 54166822
Longdian Taxi Company's Uniform Invoice Number: 27995698
Huangxing Taxi Company's Uniform Invoice Number: 86866517
Fanya Taxi Company's Uniform Invoice Number: 80501370

Summarized by Chang, Hsin-Yi; Supervised by Kuo, An-Chi