August 2017
Although an actor and an enterprise do not have any legal relationship, if the actor causes the enterprise not to engage in price competition or to participate in a merger or concerted action by improper means, such act will constitute impediment to fair competition(Taiwan)
Jane Tsai
The Ministry of Labor required in 2005 that an employer seeking to hire foreign nationals should first recruit domestically and stipulated that domestic job offer advertisements could be placed only in four major newspapers, namely the Apple Daily, China Times, United Daily and Liberty Times (hereinafter, the "Foreign Worker Copies"). A newspaper advertising agency approached the Apple Daily in December 2008 for the Foreign Worker Copies and caused the other three newspapers not to engage in price competition. As a result, the prices of Foreign Worker Copies surged during January through April of 2009. The Fair Trade Commission believed such agency was a "substantive exclusive agency" of the other newspapers and caused other enterprises not to participate in price competition or to participate in concerted action by improper means in violation of Article 19, Subparagraph 4 of the Fair Trade Law effective at the time of the act. As a result, a disposition was rendered to order such agency to desist from such illegal acts and to impose a penalty of NT$3 million in accordance with the first part of Article 41, Paragraph 1 of the same law.
The agency asserted that its relationship with newspapers was similar to the relationship with a broker where newspapers have the right to decide the placement of advertisements and the price and discount of such placement, and that its relationship with the newspapers was not an agency relationship. The Supreme Administrative Court rendered the 105-Pan-207 Administrative Decision of April 28, 2016 (hereinafter, the "Decision"), holding that even though the assertions were true, still the nature of the relationship between an actor and an enterprise is not an essential consideration factor to determine if the criteria for restraint on price competition, participation in a merger or concerted action under Article 19, Subparagraph 4 of the Fair Trade Law are constituted. Even if there is no legal relationship between an actor and an enterprise, if the actor causes the enterprise not to engage in price competition or to participate in a merger or concerted action by way of coercion or enticement or other improper means, such behavior will constitute an act that undermines fair competition under such article. The Appellant in this case operated advertisement agency business so that through its persuasion and cooperation with other entities, major newspapers could learn about the attitude of other newspapers and would promise to contract their advertisement sections to the Appellant or to have the Appellant accept advertisement placement applications on behalf of the newspapers. The Appellant also raised the prices of advertisement so that other advertisement agencies could not compete and advertisers could not compare the prices to make a choice. This obviously violated Article 19, Subparagraph 4 of the Fair Trade Law and has nothing to do with the Appellant's legal relationship with the three newspaper at issue.
The Ministry of Labor required in 2005 that an employer seeking to hire foreign nationals should first recruit domestically and stipulated that domestic job offer advertisements could be placed only in four major newspapers, namely the Apple Daily, China Times, United Daily and Liberty Times (hereinafter, the "Foreign Worker Copies"). A newspaper advertising agency approached the Apple Daily in December 2008 for the Foreign Worker Copies and caused the other three newspapers not to engage in price competition. As a result, the prices of Foreign Worker Copies surged during January through April of 2009. The Fair Trade Commission believed such agency was a "substantive exclusive agency" of the other newspapers and caused other enterprises not to participate in price competition or to participate in concerted action by improper means in violation of Article 19, Subparagraph 4 of the Fair Trade Law effective at the time of the act. As a result, a disposition was rendered to order such agency to desist from such illegal acts and to impose a penalty of NT$3 million in accordance with the first part of Article 41, Paragraph 1 of the same law.
The agency asserted that its relationship with newspapers was similar to the relationship with a broker where newspapers have the right to decide the placement of advertisements and the price and discount of such placement, and that its relationship with the newspapers was not an agency relationship. The Supreme Administrative Court rendered the 105-Pan-207 Administrative Decision of April 28, 2016 (hereinafter, the "Decision"), holding that even though the assertions were true, still the nature of the relationship between an actor and an enterprise is not an essential consideration factor to determine if the criteria for restraint on price competition, participation in a merger or concerted action under Article 19, Subparagraph 4 of the Fair Trade Law are constituted. Even if there is no legal relationship between an actor and an enterprise, if the actor causes the enterprise not to engage in price competition or to participate in a merger or concerted action by way of coercion or enticement or other improper means, such behavior will constitute an act that undermines fair competition under such article. The Appellant in this case operated advertisement agency business so that through its persuasion and cooperation with other entities, major newspapers could learn about the attitude of other newspapers and would promise to contract their advertisement sections to the Appellant or to have the Appellant accept advertisement placement applications on behalf of the newspapers. The Appellant also raised the prices of advertisement so that other advertisement agencies could not compete and advertisers could not compare the prices to make a choice. This obviously violated Article 19, Subparagraph 4 of the Fair Trade Law and has nothing to do with the Appellant's legal relationship with the three newspaper at issue.
