The Fair Trade Commission (公平會) announced on Aug. 21 to ban the merger of Taiwan’s two biggest KTV companies – Cashbox Partyworld Co. (錢櫃), Ltd. and Holiday Co., Ltd. (好樂迪).
This would be the fourth time FTC disapproved the merger between two businesses.
FTC said the companies would significantly benefit after the merger; however, promises such as vows to not raise the price or to not cut down the services couldn’t resolve the problems resulted by the fact that market lacks competitors, indicating that the aggregate economic benefit for society would be minimal and might be more to its detriment; thus, FTC disapproved the merger case based on the Fair Trade Act.
To review the influences, along with Partyworld and Holiday, FTC had recruited experts from relevant industries, consumer protections field, upstream and downstream business and competitors to discuss the case in June this year.
FTC said, Partyworld and Holiday, the two top businesses in the field, are major rivals. If the merger were to take place, this competitive environment would disappear, further harming the market economy in the KTV industry and adding incentive to raise the price, while simultaneously weakening consumers or other competitors’ ability to withstand the trend.