Fri, Aug 11, 2017 - Page 3 News List

Cable firms fined for anti-competitive sales tactics

MONOPOLIES:The companies entered agreements with building managements, threatening to impose penalties on residents should they accept offers from other firms

By Shelley Shan  /  Staff reporter

The Fair Trade Commission (FTC) on Wednesday fined three cable service providers a total of NT$3.7 million (US$122,075) for engaging in business practices that impede market competition.

The National Communications Commission (NCC) asked the companies, based in Taipei and New Taipei City, to address the issue within a period of time designated in accordance with Article 53 of the Cable Radio and Television Act (有線廣播電視法).

The companies are Daan-Wenshan Co (大安文山) and Chinpintao Co (金頻道), which are owned by multiple system operator Kbro Co (凱擘), and TWT Communications (天外天), an independent company.

Daan-Wenshan operates in Taipei’s Daan District (大安). Chinpintao offers services to residents in the city’s Zhongshan (中山) and Songshan (松山) districts. They account for 51.1 percent and 47.7 percent of the market share in their respective service areas.

TWT Communications owns 41.9 percent of the cable service market in New Taipei City’s Sanchong (三重) and Luzhou (蘆洲) districts.

An investigation by the FTC found that Daan-Wenshan and Chinpintao signed contracts with various building management committees in November 2014 and December 2015 that made them the buildings’ exclusive cable service providers.

The contracts banned the management committees from accepting services offered by other cable providers, stating that the residents would lose special discounts on their subscription fees if the clauses were violated.

The two cable operators also had the right to charge the subscribers the remaining monthly fees as compensation for violating the contract.

TWT Communications was also found to have entered in agreements with several building management committees since 2012, granting itself monopoly status, the FTC said.

The FTC found that the company had since June 2015 issued warnings to management committees, telling them to reject offers by other cable providers or to terminate existing agreements.

“The three cable operators intended to prevent newcomers from entering the market and to impede market competition by including a monopoly clause in their contracts with apartment building management committees, even sending warnings to them,” the FTC said in a statement.

The contracts were designed to increase operating costs of their competitors and reduce the competitors’ ability to offer services at competitive prices, which damaged consumers’ interests,” it said.

Daan-Wenshan was fined NT$900,000, Chinpintao was fined NT$1.2 million and TWT Communications was fined NT$1.6 million, it added.

Article 53 of the Cable Radio and Television Act stipulates that cable providers should make corrections within a specified period of time or take other necessary measures if the NCC determines that a cable radio or television system is inappropriately operated to impair, or likely to impair, the rights and interests of subscribers, NCC spokesperson Weng Po-tsung (翁柏宗) said.

The NCC would check whether the companies address the issues and remind other cable operators that they should not deprive subscribers of their right to choose different cable systems when promoting their services, the FTC said.

Kbro refused to comment, saying it has not received an official notice from the FTC.

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