The Fair Trade Commission (FTC) yesterday fined Formosa Plastics Corp (FPC, 台塑) and Formosa Chemicals & Fibre Corp (台灣化纖) NT$5 million (US$166,382) for abusing their monopoly.
Formosa Plastics is to receive a NT$2 million fine and Formosa Chemicals a NT$3 million fine, after the commission found the two firms cut the supply of sodium hydroxide and mirabilite to Joint Union Enterprise Co Ltd (合一實業) in July last year “without legitimate reason.”
Formosa Plastics’ sodium hydroxide accounts for about 60 percent of the market, while Formosa Chemicals’ supply of mirabilite meets 70 percent of the demand, according to the commission.
“Companies with monopoly power cannot terminate sales to certain clients without any legitimate reason,” Sun Lih-chyun (孫立群), vice chairman of the commission, said by telephone.
Formosa Chemicals said it was undergoing production adjustment and had insufficient mirabilite to supply to Joint Union, while Formosa Plastics said Joint Union failed to purchase enough sodium hydroxide as stipulated in its orders.
The commission rejected their explanations, saying their practices were solely targeting Joint Union. The two Formosa Plastics Group (台塑集團) companies said yesterday they would appeal the commission’s ruling.