The Guidelines on Concerted Petroleum Purchasing by Domestic Individual Gas Stations

The Guidelines on Joint Gasoline Procurement Application by Domestic Individual Gas Stations

1277th Commissioners' Meeting (2016)

Case:

Amendment to Point 6 of the " Fair Trade Commission Disposal Directions (Guidelines) on Concerted Petroleum Purchasing by Individual Petrol Stations "

Keyword(s):

Gas station, joint gasoline procurement

Reference:

Fair Trade Commission Decision of April 27, 2016 (the 1277th Commissioners' Meeting)

Industry:

Gasoline and Liquefied Petroleum Gases (LPG) Stations (4821)

Relevant Law(s):

Article 15 of the Fair Trade Law

Summary:

1. Earlier, the FTC decided to establish the "Fair Trade Commission Disposal Directions (Guidelines) on Concerted Petroleum Purchasing by Individual Petrol Stations" (hereinafter referred to as the Guidelines) at the 731st and 733rd Commissioners' Meetings. It was set forth in Point 6(A): "Concerted action exemption application: any joint petroleum purchase consisting of individual petrol stations that collectively account for greater than five percent (5%) of the market, based on the number of petrol stations nationwide listed for the current month by the Bureau of Energy, Ministry of Economic Affairs." At the time, Germany had the policy of not imposing fines for small concerted actions and adopted 5% market share as the threshold. Therefore, when establishing the Guidelines, the FTC made reference to the German legislation and stipulated that individual gas stations together accounting for less than 5% of the market share did not need to apply to the FTC for exceptional permission for concerted actions since the negative impact from their joint gasoline procurement on market competition would be limited.

2. According to the decision of the FTC achieved at the 1266th Commissioners' Meeting on February 3, 2016, the FTC's immunity consideration standard for small offenses of concerted actions was: "The enterprises participating in a concerted action together account for less than 10% of the relevant market and there will be no impact on the production, product transaction or service provision in the relevant market." Therefore, Point 6(A) of the Guidelines was amended to revise the total market share of individual gas stations that were required to apply for exception permission for concerted actions from 5% to 10%.

3. Meanwhile, Point 6(D) will also be partially amended to be in line with Article 2(2) of the Fair Trade Law and Article 12(2) of the Enforcement Rules of Fair Trade Law to revise the wording from "…when applications are filed by the trade association or an agent, the agent's identification document shall be submitted" to "… when the aforementioned enterprises belong to a trade association or organization specified in Article 2(2) of the Fair Trade Law, the trade association or organization shall apply to the FTC for permission. Such an application may be filed by an agent."

Summarized by: Tsai, Tsung-Yung; Supervised by: Chi, Hsueh-Li