The Fair Trade Commission yesterday fined the nation’s two major KTV chains a total of NT$9 million (US$297,000) because they are operating as a merged entity without applying for a merger.
Cash Box KTV (錢櫃) is the nation’s leading KTV chain operator with a market share of 23.7 percent, followed by Holiday Entertainment Co (好樂迪), which has a market share of 21.37 percent, the commission’s tallies showed.
“If the two companies merge, their market share will exceed the legal threshold of one-third of the market, which would oblige the two firms to apply to the commission for approval,” commission member Wu Cheng-wuh (吳成物) said yesterday.
However, the commission has found that the two companies have the same location for their headquarters and their employees are supervised by the same management team. In addition, the two have hired the same group of people to be in charge of purchases, while sharing karaoke machines with each other, according to the commission.
As a result, the council fined Cash Box KTV NT$5 million and Holiday Entertainment Co NT$4 million. The two companies are also required to make organizational and business adjustments within three months, the commission said.
In March 2010, the commission fined Cash Box KTV NT$3 million and Holiday Entertainment NT$1.5 million, after it found Cash Box KTV took a majority control of Holiday Entertainment’s board without filing a merger application with the commission.
In 2007, the commission rejected an application filed by Holiday Entertainment to take over Cash Box KTV, citing concerns over potential negative repercussions on customers and competitors from the proposed action.
Cash Box and Holiday Entertainment appealed the commission’s ruling at the time. However, their appeal was denied by the Supreme Administrative Court in September 2011.
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