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Fair Trade Commission Releases “Explanatory Information on Soliciting Public Opinions on Competition Law Issues Related to Generative Artificial Intelligence”
Fair Trade Commission Releases
“Explanatory Information on Soliciting Public Opinions on Competition Law Issues Related to Generative Artificial Intelligence”
In recent years, generative artificial intelligence (the “Generative AI”) technology has developed rapidly and its importance has grown significantly. In order to understand the status of Taiwan's AI-related industrial supply chain and competitive dynamics, have a good grasp of its impact on Taiwan's market competition, and promote continuous innovation and development of Taiwan's AI industry, Fair Trade Commission (the “FTC”) has prepared the “Explanatory Information on Soliciting Public Opinions on Competition Law Issues Related to Generative Artificial Intelligence in Taiwan” (the “Explanatory Information”) to understand the status of Taiwan’s AI-related industrial supply chain and competitive dynamics, in the hope of broadly soliciting public feedback as a reference for the FTC’s future legislation and enforcement efforts.
This Explanatory Information covers the clarification of the market structure and characteristics of the Generative AI, and briefly describes the development of AI hardware supply chains, model development, and application deployment in Taiwan. It then extends the discussion to competition issues that may arise from the Generative AI through the four types of competition law regulation (unilateral abuse of market power, concerted actions, mergers, and false advertising or other unfair competition practices).
1. Unilateral Abuse of Market Power
It is mainly divided into the following four types: 1. acquisition of computing resources; 2. restricted access to data; 3. cloud service platforms; and 4. basic models.
2. Concerted Actions
The FTC believes that the use of algorithms for concerted actions already attracted significant attention before the development of the Generative AI. However, following the advancement of AI with more comprehensive thinking and computing capabilities, the incentive and ability to make pricing decisions by using models will also increase. In addition, AI can help monitor other members of concerted actions and identify those who violate the agreement. Furthermore, if multiple businesses use the same Generative AI model or products based on the same model, they may make consistent business decisions, thereby affecting market competition.
3. Mergers
The FTC believes that the current AI market is actively developing cooperative relationships through horizontal mergers, vertical mergers, or conglomerate mergers to integrate resources and enhance market influence. These methods include investment, licensing, and employee recruitment. The mergers of highly concentrated AI chip and cloud service market operators have attracted widespread attention.
Due to the high entry obstacles in terms of capital and technology in the Generative AI infrastructure and model development market, startups will have greater incentive to collaborate with tech giants or be acquired. Additionally, given the importance of professional talents in the AI industry, the impact on market competition of companies directly hiring teams from competitors or potential competitors remains to be seen.
4. False Advertising or Other Unfair Competition Practices
The FTC believes that content produced by the Generative AI may be used for false marketing tactics and misleading consumers. AI data analysis also facilitates the provision of false, untrue or misleading information or content to individual users.
In order to solicit opinions from all sectors and ensure the content to be comprehensive, this Explanatory Information is published on the FTC’s website and is open for public feedback. Anyone who has comments on the content of the Explanatory Information may submit the suggestions to FTC in writing by mail or by filling out the online form by September 7, 2025.
If you have any questions or require further consultation regarding the Explanatory Information or related topics, please feel free to contact Lee and Li at any time.