Taiwan Supreme Administrative Court finds in favor of FTC in concerted action case against three leading industrial paper manufacturers

E170701Y4・E170630Y4 Jul. 2017(E212)

 On May 5, 2010, Taiwan Fair Trade Commission (FTC) imposed administrative fines in the total amount of TWD10 million on three Taiwanese leading industrial paper manufacturers, Cheng Loong Corp. (Chinese: 正隆股份有限公司; hereinafter “Cheng Loong”), Long Chen Paper Co., Ltd. (Chinese: 榮成紙業股份有限公司; hereinafter “Long Chen”), and YFY Inc. (Chinese: 永豐餘工業用紙股份有限公司; hereinafter “YFY”) for their joint manipulation of secondary cardboard price fixing throughout a period from November 2009 to March 2010.  FTC decided that the three manufacturers’ act of price manipulation constituted  concerted action that is able to affect the supply-demand function in the local industrial paper market as defined in the 1st paragraph of Article 14 of the Taiwan Fair Trade Act and thus imposed an administrative fine on Cheng Loong (TWD5 million), Long Chen (TWD3 million), and YFY (TWD2 million), respectively, and the three manufacturers filed an administrative appeal against the FTC’s decision and further instituted an administrative action against the FTC.  After 7-year administrative proceedings, on May 25, 2017, the Taiwan Supreme Administrative Court rendered a judgment sustaining the FTC’s decision that the three manufacturers’ price manipulation indeed constitutes concerted action as defined in the Fair Trade Act.  This judgment is final with binding effect. 

 As indicated in the Supreme Administrative Court’s judgment, direct evidence is not the only basis for determining the existence of concerted action; indirect evidence and economics theories are also tenable for proving and determining the existence of agreement for concerted action.  The Supreme Administrative Court’s basis for such determination in this judgment is consistent with the FTC’s practice of law enforcement with respect to concerted action in recent years, which will, therefore, serve as important reference in future legal practices.  (June 2017)
/CCS

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