The Taiwan Fair Trade Committee (TFTC) rendered a decision on 20 April 2016 determining that 21 enterprises, i.e., Evergreen International Storage & Transport Corporation, Tungya Transportation and Terminal Co., Ltd., CMT Logistics Co., Ltd., KaoFeng International Logistics Co., Ltd., Associated International Inc., China Container Terminal Corp., TK Logistics International Co., Ltd., China Trade and Development Corporation, Asia Pacific Logistics International Co., Ltd., Express Container Terminal Corp., Kuo Chen Total Logistics Co., Ltd., Universal Container Terminal Co., Ltd., Unitop Logistics Corporation, Central Freight Terminal Co., Ltd., Horng Maw Container Terminal Co., Ltd, Taiwan Container Terminal Co., Ltd., Ta San Hong International Container Terminal Co., Ltd., Worldwide Freight Terminal Inc, Worldwide Logistics Service, Inc., Taipei Port Container Terminal Corp, and United Logistics International Co., have violated Article 15, paragraph 1 of the Taiwan Fair Trade Act ("TFTA') due to their concerted action in July 2014 to jointly restore the charges of mechanical handling service for three tons or less CFS exportation (hereinafter referred to as "CFS exportation mechanical charges"). Their actions of mutual restraint have disrupted the functioning of the container freight service market. Thus, the TFTC ordered the cessation of aforesaid actions, and imposed a total of NTD 72.6 million administrative fines.
According to the TFTC, the aforesaid enterprises negotiated and discussed the restoration of CFS exportation mechanical charges during lunch meetings that followed the official meetings held by Container Terminal Transport Association R.O.C. (hereinafter referred to as "Container Terminal Transport Association") in December 2013 and February 2014. In order to restore the charges, the parties provided a letter or an announcement stating that they will restore the CFS exportation mechanical charges to the Container Terminal Transport Association, and the Container Terminal Transport Association then notified National Association of Chinese Shipowners, Shipping Agents Association, International Ocean Freight Forwarders and Logistics Association Taiwan, Shippers Council, Customs Brokers Association, Importers and Exporters Association, Truck Cargo Transportation Association, and other relevant associations thereof via letter. Eventually, such action led the parties to successfully restore the charges in July 2014.
In this case, in addition to the fact that the parties exchanged information at the lunch meetings, some of the parties confessed and testified that there were resolutions or mutual decisions to restore the charges. The TFTC indicates that the cartel members in the subject case jointly held at least 80 % of the nationwide sales in respect of container freight and CFS exportation. Since these parties are competitors in the same production and sales stage, they should have competed for trading opportunities through offering more favorable price, quality, service, or any other terms and should have decided respectively whether to restore the CFS exportation mechanical charges based on the differences of their operating cost, competitive environment, and business judgement. However, the parties reduced the risk ofrestoring the charges respectively via concerted action, and thus resulted in the fact that the container yards unanimously restored the charges in July 2014. Such action reduced the incentive for the container yards to compete for trading counterparts through offering more favorable price, quality, and service, and it severely disrupted the functioning of the market.
It is worth noting that this is the first time TFTC granted rewards for reporting illegal concerted actions. To encourage reporting of illegal concerted actions, TFTC promulgated the "Regulation on Payment of Rewards for Reporting of Illegal Concerted Actions" on October 7, 2015. According to this regulation, the amount of the reward will be granted according to the amount of fine and the value of the evidence provided by reporters. The value of evidence is divided into three categories: "evidence that is helpful to initiation of investigation proceedings", "circumstantial evidence" and "direct evidence", and the amount of the reward is 5%, 10%, and 20% of the amount of fine respectively. The maximum amount is NTD 500,000, NTD 5 million and NTD 10 million respectively. If the amount of fine is more than NTD 200 million but less than NTD 500 million, the maximum amount of the reward will be doubled; if the amount of fine is more than NTD 500 million, the maximum amount of the reward will be quintupled. Meanwhile, considering the balance of the income and expenditure of the antitrust fund, a reward that exceeds NTD 500,000 will be granted proportionally, and the rest of the rewards will be granted when the disposition of fine is confirmed.
According to the recent punishments against concerted actions, the TFTC is trying to maintain market competition order through the "Regulations on Payment of Rewards for Reporting of Illegal Concerted Actions" along with the "Leniency Programme" and other aggravated punishments.