Newsletter
MAJOR FTC DECISIONS
Gas Bottlers Fined NT$133 Million
A complaint was filed against 27 gas bottling firms in the Kaohsiung, Pingtung and Tainan areas for jointly raising gas bottling prices on the pretext of a rise in the price of natural gas sup-plied by China Petroleum Corporation. Inves-tigations by the FTC revealed that the main source of income for the gas bottling firms is transport charges for transporting bottled gas to gas distributors, and bottling charges for filling gas containers. But there is no connection whatsoever between a rise in raw material costs and the cost of transport and bottling, and the operating costs of gas bottlers are not affected by increases in the price of natural gas.
Because there are barriers to entry to the gas bottling business, gas bottlers have a dominant position in the distribution system for bottled gas, and can effectively control gas distributors. The FTC found that the gas bottlers involved in the concerted action accounted for more than 90% of the gas bottled in Kaohsiung and Pingtung, and more than 80% of the gas bottled in Tainan. Thus their action was sufficient to influence the supply and demand for bottled gas in these two regions, so that the competition in the market for bottled gas in southern Taiwan was completely negated. Further, through their joint price-raising action, the bottlers had earned a high level of illegal profits, which if passed on would seriously harm the interests of consumers at large. This is why the FTC imposed such a heavy fine, once again setting a new record for a single fine imposed by the FTC.