10 manufacturers fined for joint monopolization

By Stephanie Chao ,The China Post

TAIPEI, Taiwan — The Fair Trade Commission (FTC) has imposed a historic fine on foreign and local electronic capacitor manufacturers, totaling approximately NT$5.7 billion, on Wednesday after they were accused of joint monopolization.

Japanese aluminum electrolytic capacitor producer Nippon Chemi-Con Corporation, a major producer of tantalum electrolytic capacitors; NEC TOKIN Corporation, and the U.S.-based Vishay Polytech are among the companies in violation of the Fair Trade Act, stated the FTC. Hong Kong-based and domestic companies are also named as violators as well, including the Hong Kong Chemi-Con Limited. Other companies include Rubycon Corporation, ELNA Co., Ltd., and Nichicon (Hong Kong) Ltd. Chiu Yung-ho (邱永和), vice chairperson of the FTC, said that the violators have placed restrictions on market competition through the exchange of sensitive business intelligence, such as prices, client info, price and stock numbers.

Trading of the information was carried out through meetings or contact between the companies, the FTC said.

Japanese manufacturers, for example, have been carrying out such methods since the 1980s, the FTC claimed in its press release. Meetings hosted in Japan between 2005 and 2014 were gatherings for the companies involved to conduct discussions. The FTC stated that the case holds the record for the highest fine imposed on international companies to date since the foundation of the commission, and further emphasized the importance of the case, as it signifies an example of a ruling based on leniency policies. According to the FTC, an unnamed electronic capacitor manufacturer came out two years ago to admit its involvement in joint monopolization of the market, and applied for leniency. The commission also stated that the first company to admit its alleged illegal involvement would receive a 100 percent deduction off its penalty.

The case was conducted as part of a joint investigation with the U.S., the European Union and Singapore into international cartels, otherwise known as joint monopolization. Taiwan is also the first country to hand down a ruling on such a case worldwide, the FTC stated.

Citing how the companies’ have affected Taiwan’s electronic capacitor market, the FTC concluded the companies have violated the first regulation of the Fair Trade Act’s Article 14. Local Market Heavily Affected Aluminum electrolytic capacitors are often used in large-sized electronic products, such as desktop computers, daily electronic household appliances, and gaming consoles for television sets, the commission said. Usages for tantalum electrolytic capacitors include small-sized electronic devices such as laptops or cellphones. Domestic aluminum electrolytic capacitors only maintain a 3 percent market share, while tantalum-made capacitors are completely reliant on imports, the FTC reported. The violating companies have amassed sales amounting to NT$66 billion in the past 10 years in Taiwan, largely affecting import costs for local companies, such as Hon Hai Precision Industry Co. (鴻海), and Delta Electronics Inc. (台達電), the FTC stated. Consumers have also been indirectly affected as well.