FTC to appeal chain ruling verdict

APPEAL BREWING::After its ruling that four major convenience store chains had colluded to fix the price of coffee was overturned, the commission said it may appeal

By Camaron Kao  /  Staff reporter

Fri, Dec 21, 2012 - Page 13

The Fair Trade Commission (FTC) yesterday said it may appeal a verdict by the Taipei High Administrative Court on Wednesday which nullified the commission’s ruling last year to impose a NT$20 million (US$686,800) fine on four convenience store chains for price-fixing.

“We will suggest that the commission appeal because we are confident in our reasoning, which is based on thorough research of every court judgment,” FTC spokesman Sun Lih-chyun (孫立群) said by telephone.

Sun declined to elaborate on the court’s action before the commission receives and examines the official document of the verdict.

In November last year, the commission announced it would penalize convenience store chains run by Uni-President Enterprises Corp (統一企業), Taiwan FamilyMart Co (全家便利商店), Hi-Life (萊爾富) and OK Mart (OK 超商) for colluding on raising the prices the prices of coffee by NT$5 per cup.

The commission at the time said that during its investigation, representatives of the four chains had failed to justify why they had each raised their prices by equal amounts, although they had different cost structures.

Because the four chains account for 80 percent of the freshly brewed coffee market, the commission said they had the ability to set a fixed price in the market and hurt competition.

The four chains objected to the commission’s ruling and appealed the case to the Taipei High Administrative Court, which on Wednesday overruled the commission.

In its verdict, the court said the commission’s reasoning for concerted action was inadequate and it should provide further evidence to justify its allegations.

The court said it believed it was reasonable for the four chains to raise their prices by NT$5 per cup.

The court also questioned how the commission defined the freshly brewed coffee market, demanding that it conduct further market research to prove the four chains dominate 80 percent of the sector.