Sogo Department Store (
The fine is the result of a Sogo rule prohibiting tenants from setting up other shops within 2km of its store.
The Fair Trade Commission said the rule prevented vendors from setting up other outlets in places such as the Breeze Center Mall (微風廣場), which is within walking distance of Sogo's store on Chunghsiao E. Road.
"Our commission reached a verdict on Thursday saying Sogo's practice has unfairly hampered market competition and erected unreasonable barriers to new entrants," Cheng Yu (
The NT$2.5 million fine is relatively low, considering penalties can go as high as NT$25 million.
In October, Sogo -- fearing tough competition from new market entrant Breeze -- asked its vendors to sign a contract promising not to set up shops within 2km of its department store.
According to Cheng, more than 95 percent of the store's 766 vendors accepted Sogo's terms.
As a result, Breeze was unable to attract several major stores to the new facility and turned to the Fair Trade Commission for help.
"Early this year we received a complaint from the Breeze Center and then started to investigate the case," Cheng said.
Sogo's four stores -- two in downtown Taipei and two in Yungho -- accounted for nearly 30 percent of greater Taipei's department-store sales last year.
"Sogo undoubtedly dominates the market and enjoys strong bargaining power with vendors," Cheng said.
The official said similar cases have also been reported to the commission.
Ide? Department Stores (
"That's because we couldn't find concrete evidence," he said. "But this time we not only obtained copies of the contracts, we also had cooperation from the vendors."
One Sogo retailer said she looked forward to a more open market.
"We are happy to have more choices in managing our sales channels," said the retailer, a senior official at a foreign cosmetics company, who requested anonymity.
The retailer said that because Sogo is a popular downtown store, most vendors don't want to risk jeopardizing the lucrative business relationship.
Officials from Sogo, meanwhile, said they were disappointed with the government's decision.
"We plan to appeal to the commission as soon as possible," said Lee Kuang-rong (李光榮), vice president for the department store.
Lee said the commission's investigation procedures were incomplete. Sogo's position was only obtained in writing and no one from the company was able to speak to the committee face to face, Lee said. "We deserve another chance to explain our stance."
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