Newsletter
PARTIAL AMENDMENT TO THE FAIR TRADE LAW
An amendment to the Fair Trade Law (FTL) took effect on 3 February 1999. Major contents of the amendment include the following:
The original intent in requiring announcement was to remind firms already occupying monopoly status in the marketplace not to engage in activity that would abuse that status. Since the FTL's enactment, however, the administrative cost of enforcing the provision has been enormous. Furthermore, when actual cases arose, originally confirmed data and findings might not be directly cited as they might not correspond chronologically to the activity under investigation, meaning that the market data must then be researched again. The deletion of this provision will enable the Fair Trade Commission (FTC) to handle unlawful monopolistic behavior directly on the basis of its investigation findings in each case.
The requirement of regular public announcement of enterprises with a market share of one-fifth of the total market was intended as a signpost for enterprises meeting the threshold that a combination approval is required. It was meant to serve as a warning. Since implementation, however, a considerable gap has been found to exist between the market share necessitating announcement (one-fifth) and that necessitating an application for permission (one-fourth), so the early warning function was negligible. Also, the publicly announced data was nationwide market data, so questions of applicability arose in actual cases concerning regional markets. Thus, the provision is deleted.
If, after approval has been granted for concerted action, the reasons for such approval cease to exist, economic conditions change, or the enterprise oversteps the limits of the approval, the governing agency may revoke such approval, alter the terms, or order cessation or alteration of the activity. It may also take necessary corrective measures.
The original provisions of FTL Article 18 prohibited the maintenance of resale price except in the case of daily necessities for the general consumer if there exist goods of the same category in free competition on the market. The aforementioned daily necessities were to be publicly announced by the central governing authority.
Considering that the domestic market for daily necessities for the general consumer is not entirely competitive, and in the spirit of adopting norms consistent with those concerning horizontal price cartels, the above proviso is therefore deleted.
The principle of administrative measures before judicial relieves is now to be followed in cases involving abuses of monopolistic status, cartel violations, and counterfeiting. In other words, cases should initially be handled by the FTC. If the FTC does not get satisfactory results, cases should be turned over to judicial sanctions according to penal proceedings. In cases of illegal multi-level marketing activities (e.g. pyramid schemes), however, the original principle of simultaneous administrative and judicial measures should still be followed, since such activities tend to be clear-cut in its illegality and serious in impact.
In tandem with the adoption of the principle of administrative measures before judicial relieves, the ceilings on penal fines and administrative fines provided in the FTL are raised 100-fold for the former to NT$100 million and 50-fold for the latter to NT$50 million.