Thu, Mar 25, 2010 - Page 2 News List

Commission fines vendors for fixing price of bottled gas

By Shelley Huang  /  STAFF REPORTER

The Fair Trade Commission (FTC) yesterday announced its decision to fine six bottled natural gas retailers in Kaohsiung a total of NT$440,000 (US$13,800) for price fixing.

The six companies sell bottled gas to homes and businesses in the area. Together, they account for about 80 percent of the bottled gas market in the city’s Cijin District (旗津), which makes the price fixing a serious violation of fair trade practices in the area, commission spokesperson Shih Hui-fen (施惠芬) said.

Before they started to communicate with each on pricing, the six companies originally charged different prices for the bottled gas, ranging from NT$500 to NT$540 for a 20kg bottle sold to businesses and from NT$550 to NT$600 for a 20kg bottle sold to homes.

The variations in the amount charged were mainly because of differences in transportation costs, because the companies transport the bottles different distances to their customers.

However, between November 2008 and last May, an owner of one of the companies, surnamed Kuo (郭), coordinated price fixing efforts among the firms to maintain price variations of no more than NT$10.

The commission launched an investigation after their office received an anonymous tip-off.

“Our investigation showed that the companies were trying to stabilize prices rather than make lucrative profits, because it was clear that they did not even know what ‘price fixing’ entailed and they did not know it was a violation of fair trade practices,” Shih said.

The companies were also extremely cooperative with the commission’s investigators and compliant with orders to immediately stop communicating with each other to set prices, she said.

The commission fined Kuo’s firm NT$110,000 because Kuo instigated the price fixing, and issued fines ranging from NT$50,000 to NT$80,000 to the other companies.

Other suspected illegal practices among bottled gas retailers in other parts of the country are being investigated.

Shih said price fixing was punishable by fines of up to NT$25 million.

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