Fair Trade Act: The Economic Committee of Legislative Yuan has passed amendments to Fair Trade Act before second reading.

[2014/05/26]

The Economic Committee of Legislative Yuan, at the meeting held on May 26th, 2014, has completed the examination over the draft amendments to Fair Trade Act and the draft amendment have been sent to second reading. The draft amendments are expected to be enforced by the end of 2014 at the earliest. These draft amendments, if passed third reading as is, would be a substantial change to the Fair Trade Act, as indicated by the Chairperson of Fair Trade Committee (“FTC”) in an interview on the same day. According to the press media, the main points of these amendments are outlined as the following:

(1) The threshold to trigger the ex-ante filing requirement of a merger will simply be determined whether the sales volume of the enterprise engaging in such merger in the preceding fiscal year exceeds the monetary threshold amount publicly announced by the FTC. The market share threshold will no longer be used.
(2) A mutual understanding to a concerted action may be inferred from market status, features of the goods or service, considerations of cost and profit, and the economic rationality of such action.
(3) The restriction on resale price is illegal per se for now. But if such restriction has been conducted for due cause, it will be allowed following the draft amendment taking effect.
(4) In order to discover and obtain the critical evidence, FTC may, with the approval granted by a prosecutor, apply for the administrative search warrant with district courts to search and seize the evidence.
(5) The FTC may cease the proceedings against the enterprise under investigation if such enterprise, within a period of time designated by the FTC, promises to take the concrete measures to remove relevant part of action suspected in violation of the Fair Trade Act.
(6) The enterprise will be able to directly file a complaint against the punishment decision made by the FTC with a court without first going through the administrative appeal procedures.
(7) The fine as an administrative punishment imposed by the FTC against an anti-competitive activity will be raised. For example, the enterprise which violates the restriction on concerted action will be subject to a fine up to NTD 50 million (current cap: NTD 25 million) and failure to cease or rectify the violating act within a designated period of time, will be further subject to a fine up to NTD100 million each time (current cap: NTD50 million).