February 2024
Taiwan Fair Trade Commission Determined that the Resolution Adopted by the Professional Civil Engineers Association to Set a Minimum Salary for Its Members Constituted a Concerted Action
February 2024
Aaron Chen and Vincent Kuo
Chinese Union of Professional Civil Engineers Association (hereinafter “the Union”) and several local professional civil engineers associations (hereinafter “Local Associations”) made a resolution regarding minimum salary scheme for their members employed in the construction projects (hereinafter “the Resolution”) on April 6, 2022. Taiwan Fair Trade Commission (the “TFTC”) determined that the Resolution constituted a concerted action, ordered immediate cessation of the Resolution, and imposed a fine of NT$500,000 on the Union on December 21, 2023 (the TFTC’s decision, the “Decision”). The reasoning of the Decision is as follows:
1. The Competition in the Factor Market Is Also Protected by Taiwan Fair Trade Act
In this case, the construction industry is legally required to hire individuals holding engineer or architect certificates, including civil engineers, as full-time professional engineers. The Resolution regarding minimum salary scheme for their members employed in the construction projects was considered to impact price competition in the factor market, the TFTC mentioned in its Decision. The TFTC further explained that in the factor market, firms are the demanders while employees are the suppliers of labor, and that free and fair competition in the factor market is essential for prosperity of the society and is also protected by the Fair Trade Act.
2. Even If the Resolution Is of Recommendatory Nature and Lacks Binding Effect, the TFTC Still Deemed the Resolution a Concerted Action
The TFTC held that an agreement among enterprises to jointly determine the price constitutes a concerted action, regardless of whether it has binding effect. In this case, although the Union and several local Associations only published the Resolution on their websites or conveyed them to their members through email and the Resolution was merely of recommendatory nature, as so alleged, the TFTC still considered that the Resolution may lead to a concerted action regarding setting the minimum salary for the civil engineers in the construction industry. Furthermore, when it comes to the criterion of “resulting an impact on the market function”, the TFTC emphasized that agreements involving pricing, market segmentation, production capacity, or trading partners inherently pose a significant threat to competition and will be deemed so, regardless of the market share held by the participants.
Aaron Chen and Vincent Kuo
Chinese Union of Professional Civil Engineers Association (hereinafter “the Union”) and several local professional civil engineers associations (hereinafter “Local Associations”) made a resolution regarding minimum salary scheme for their members employed in the construction projects (hereinafter “the Resolution”) on April 6, 2022. Taiwan Fair Trade Commission (the “TFTC”) determined that the Resolution constituted a concerted action, ordered immediate cessation of the Resolution, and imposed a fine of NT$500,000 on the Union on December 21, 2023 (the TFTC’s decision, the “Decision”). The reasoning of the Decision is as follows:
1. The Competition in the Factor Market Is Also Protected by Taiwan Fair Trade Act
In this case, the construction industry is legally required to hire individuals holding engineer or architect certificates, including civil engineers, as full-time professional engineers. The Resolution regarding minimum salary scheme for their members employed in the construction projects was considered to impact price competition in the factor market, the TFTC mentioned in its Decision. The TFTC further explained that in the factor market, firms are the demanders while employees are the suppliers of labor, and that free and fair competition in the factor market is essential for prosperity of the society and is also protected by the Fair Trade Act.
2. Even If the Resolution Is of Recommendatory Nature and Lacks Binding Effect, the TFTC Still Deemed the Resolution a Concerted Action
The TFTC held that an agreement among enterprises to jointly determine the price constitutes a concerted action, regardless of whether it has binding effect. In this case, although the Union and several local Associations only published the Resolution on their websites or conveyed them to their members through email and the Resolution was merely of recommendatory nature, as so alleged, the TFTC still considered that the Resolution may lead to a concerted action regarding setting the minimum salary for the civil engineers in the construction industry. Furthermore, when it comes to the criterion of “resulting an impact on the market function”, the TFTC emphasized that agreements involving pricing, market segmentation, production capacity, or trading partners inherently pose a significant threat to competition and will be deemed so, regardless of the market share held by the participants.
