Chinese Taipei's Individual Action Plan Detailed Description of Actions in Specific Areas Competition Policy

Chinese Taipei's Individual Action Plan
Detailed Description of Actions in Specific Areas
Competition Policy

OBJECTIVE APEC economies will enhance the competitive environment in the Asia-Pacific region by introducing or maintaining effective and adequate competition policy and/or laws and associated enforcement policies, ensuring the transparency of the above, and promoting cooperation among APEC economies, thereby maximizing, inter-alia, the efficient operation of markets, competition among producers and traders, and consumer benefits. GUIDELINES Each APEC economy will: a. review its respective competition policy and/or laws and the enforcement thereof in terms of transparency; b. implement as appropriate technical assistance in regard to policy development, legislative drafting, and the constitution, powers and functions of appropriate enforcement agencies; and c. establish appropriate cooperation arrangements among APEC economies.

Overview of Chinese Taipei's Approach to Competition Policy in 2001
The Fair Trade Law (FTL) went into effect on February 4, 1992 in Chinese Taipei with the aim of upholding and protecting order in trade and consumers' interests, and promoting economic stability and prosperity. It provides fair and reasonable "game rules" enabling enterprises to compete freely on a level playing field, thereby raising the economic efficiency of enterprises, promoting the reasonable allocation of resources, and safeguarding consumers' interests. To achieve these aims, the Fair Trade Commission (FTC)(http://www.ftc.gov.tw) was established on January 27, 1992, and has been charged with the important mission of enforcing the FTL. It has vigorously carried out each of its duties in line with the administrative principles of "earnestly administering under the law, supporting economic development, serving the public interest, and keeping abreast of international trends." Although the past nine years have been arduous ones, a mature and stable level has been reached in the establishment of the FTL's regulatory framework, penetration of fair trade concepts, and enforcement of the FTL. The FTC has achieved concrete results in advancing the opening-up of specially designated markets, upholding and protecting fair competition, and regulating order in trade. It has also made a positive contribution toward domestic economic stability and development. The rules prohibit specific types of anti-competitive conduct such as:

- anti-competitive practices of monopolies, oligopolies and dominant firms(Article 10);
- anti-competitive mergers and acquisitions(Article 11);
- anti-competitive horizontal restraints(Article 14);
- vertical resale price maintenance(Article 18);
- anti-competitive exclusive dealing( Article 19);
- passing-offs and counterfeiting(Article 20);
- false or misleading advertising(Article 21);
- commercial disparagement(Article 22);
- illegal multi-level sale schemes(Article 23), and
- grossly unfair trade practices(Article 24).
In recent years, economies have changed in important ways both at home and abroad, and significant advances have been made in politics domestically. The existing trade system and economic concepts must be mutually accommodating and continuously readjusted. As economies liberalize and globalize, the adoption of fair trade policies and enforcement of fair trade provisions must take into account industries' development and consumers' interests if the maximum benefit of the FTC's mission and functions are to be realized. Because of this, in consideration of the mission and spirit of the FTL and in appreciation of the changing times and requirements of the overall environment, FTC will vigorously undertake the following five tasks:
1. Establishment of a reasonable fair trade system
  - The FTL put in place a complete set of regulations governing competition in the market in consideration of the distinguishing characteristics of new and traditional industries, and it must eliminate unnecessary barriers to entry.
  - It will continue to reassess related subordinate laws and handling principles in order to balance the three interests of industry development, competition policy, and consumers' interests. In coordination with relevant government authorities, it will also reassess regulations that obstruct competition in its ongoing effort to eliminate unnecessary government controls.
2. Initiation of a compliance program
  As law enforcement by government should take into account fairness and justice and economic development, and as limited administrative resources should be optimally utilized. The FTC will follow the precedents of the competent authorities of advanced nations in which the public's interests and overall economic interests are used as bases for consideration in the handling of cases, and it will use the principle in which law enforcement is advanced gradually. Thus, the FTC will bring into line the operating practices of industries, and in particular, it will help industries establish a framework for self-regulation so as to help avoid conflicts with laws. While, playing the role of "supervisor of order in trade in the market", the FTC together with industries will work to create a new economic environment of fair competition.
3. Realization of fair administrative procedures
  The FTL is a kind of "basic law of the economy". Enforcement of laws by the FTC has a large influence on citizens' rights and interests. In order to accommodate enforcement of the Administrative Procedure Law, law enforcement must maintain a high degree of vigilance and justice, and all administrative work must be reasonable and transparent. For these reasons, the FTC will continue promoting innovative administrative procedures and democratization and transparency in law enforcement.
4. Creation of a public utility competition framework
  In the past, most public utilities such as those in the power and telecommunications industries were government regulated. In recent years, however, as more and more new production methods have been created, those naturally monopolistic industries have transformed into industries that can segment their services, and that can trade their products in the market. Hence the supply and demand for their products should also be decided by market competition. It is well known that Chinese Taipei has achieved much in the past few years in terms of competition in the telecommunications and petroleum product markets. For its part, the FTC has continuously participated in the establishment of post market-opening competition framework. In the future, the opening of controlled industries will be broadened and deepened, and the other monopolistic public utilities will inevitably, albeit gradually, also be opened. In response to these economic changes, proper advance preparations must be made so restrictions to competition or unfair practices caused in the future can be corrected, and in the process, a competition framework for each of those industries can be established.
5. Expansion of forward-looking international interchange and cooperation
  Since the 1990s, due to the effects of a large increase in the operational scale of enterprises worldwide and the global trend toward merger and acquisition, the global competitive environment has undergone fundamental changes necessitating that competition policy authorities worldwide strengthen cooperation on issues such as cross-border mergers & acquisitions, international cartels, and regional monopolies in order to harmonize the diverse body of regulations in place. How best to prevent anti-competitive practices and promote global market liberalization are pressing questions being asked in many multilateral trade blocs and bilateral trade discussions. With the Chinese Taipei's accession into the WTO drawing near, Chinese Taipei needs to strengthen efforts to get a firm grip on the overall situation and to make clear its positions and principles with respect to discussions of international economics and trade organizations vis-a-vis competition law and the positions of nations on such discussions. To accommodate these developments in the global landscape, and to uphold and protect the interests of industries and citizens, the FTC will build on the foundation of cooperation with international organizations and law enforcement authorities to expand all channels of dialogue and to participate in the activities of international trade organizations, and in contribution to the international community, it will continue to expand competition law system technical assistance.
Chinese Taipei's Approach to Competition Policy in 2001
General Policy Framework
Improvements Implemented Since Last IAP
1. Chinese Taipei has been enforcing competition policies/laws and maintaining the fair-trading orders in the domestic economy. By the end of 2000, Chinese Taipei processed 19,949 cases related to Competition Law. This included: 13,005 complaints filed by private parties; 1,965 requests for interpretation of the law and 4,979 applications for merger or acquisition approval and cartel exemption. The numbers reflect and demonstrate Chinese Taipei's determination to maintain the domestic fair trading order.
2. Chinese Taipei has been opening markets and build a free competitive environment. Chinese Taipei set up the Deregulation Task Force to review and lift improper controls and obstacles to market access across the board. Through ongoing consultation with the relevant authorities, many tangible successes have been achieved. For instance:
  (1) The petroleum market
  - Taiwan's petroleum import market has been partially deregulated as of year 2000. During the deregulation process, the FTC vigorously advocated eliminating obstacles to market entry and stressed a policy of excluding subsidization, segregating competition, and setting new market rules. All of these concepts have been incorporated into the drafted Petroleum Management Law.
  (2) The telecommunication and electric power markets
  - the FTC has proactively shared its opinions and work experience in competition policy and law with the Ministry of Transportation and Communications and the Ministry of Economic Affairs for reference in liberalizing the telecommunication and electric power markets. As a result, provisions governing anti-competitive acts were added to the Telecommunications Law draft amendment, and the FTC's proposal to deregulate the power generation, transmission, and distribution industries was adopted in the amendment to the Power Industry Law.
3. Chinese Taipei has enhanced public understanding by conducting public compliance education activities through various channels to ensure broad coverage. It
  (1) provides information to the mass media;
  (2) administers external liaison programs;
  (3) convenes workshops in conjunction with trade associations and other bodies. Over 1200 workshops covering all kind of business activities have been held by the end of 2000 throughout Chinese Taipei.
  (4) conducts a series of lecture-programs on a regular basis for management-level employees of firms. The lecture-program conducted by members of the Commission provides 72 hours of focal discussions on various aspects of the Fair Trade Law.
4. Chinese Taipei has been maintaining the APEC Competition Law and Policy Database. Chinese Taipei proposed to take charge of the establishment of an APEC competition policy database during an APEC Workshop on Competition Policy and Deregulation in August 1996. In January 1997, after a demonstration of a prototype of this database, we received full endorsement from member economies to continue with the establishment and maintenance of the database. The database contributes to and strengthens "policy/law" transparency among APEC members.
5. Chinese Taipei established the Competition Policy Information and Research Center on January 27,1997, to promote enforcement capabilities of competition law. This information center is approached from various levels. First, a database provides a source of internationally collected material, inclusive of market structures and competition profiles, as well as related laws and regulations. Second, through networks, it strengthens communications and exchange with other government agencies and serves those in the industrial and academic sectors. Third, it serves as a focal point in the region for studies and queries regarding competition laws and policies.
6. Chinese Taipei has been striving to enhance international cooperation in this area:
  (1) Chinese Taipei has already signed separate cooperation agreements in competition policies /laws with Australia and New Zealand in 1996 and 1997, respectively. In addition, Chinese Taipei also held separate bi-lateral consultation meetings with competition agencies in New Zealand, Australia, Canada and the U.S.A. in 1999 and 2000.
  (2) To have government officials of competition-related agencies sitting together to share experiences of enacting and enforcing competition policies and laws, Chinese Taipei's Fair Trade Commission and the OECD have been co-hosting an annual "International Cooperation Program on the Competition Policy" beginning in 1999. This seminar benefits those regions or member economies that have just enacted competition laws or are contemplating doing so.
  (3) To strengthen cooperation and interaction with Australia, Chinese Taipei has been conducting a staff exchange program every year since 1999. Through this exchange process, staff have learned about the simulations and differences in their respective economies' policy-making and law enforcement.
Current Competition Policies/Arrangements

Chinese Taipei's Fair Trade Commission is:
1. Reviewing and revising relevant laws and regulations to establish a transparent standard for law enforcement;
2. Assisting industries to establish compliance programs to create an environment of fair market competition;
3. Creating of a competition framework for public utilities in line with changes in the overall environment;
4. Coordinating with other relevant authorities to ensure a fair trade environment;
5. Participating in international trade and economic activities; promoting international exchanges and cooperation;
6. Improving competition policy and competition law databases and promoting law enforcement awareness and efficiency;
7. Programming through different media to advocate fair trade ideas.
Further Improvements Planned
1. Chinese Taipei will continually uphold the order of competition and business transactions in domestic industry by:
  (1) Actively investigating unfair or restrictive competitive behaviors.
  (2) Encouraging and assisting domestic industries to establish and follow their own norms.
2. Chinese Taipei will improve the enforcement efficiency of competition policies and laws by revising competition policies and laws continuously and to harmonize them with the Administrative Procedure Law.
3. Chinese Taipei will further open up the domestic market and ensure that it becomes fully competitive by establishing a fair competitive norm system in harmony with the opening of the energy industries.
4. Chinese Taipei will strengthen the information system of the competition policies/laws and to strengthen the transparency of competition policy/law among APEC members by:
  (1) Gathering and compiling the statistics on market structures and industrial activities.
  (2) Continuing to revise and update government's information systems in harmony with the e-government program.
  (3) Enriching and maintaining the APEC Competition Law and Policy Database.
  (4) Studying the feasibility of establishing a discussion system on the Internet for competition policy/law.
5. Chinese Taipei will develop the function of Competition Policy Information and Research Center by:
  (1) Strengthening the Center's service.
  (2) Establishing on-line searchable databases.
6. Chinese Taipei will continue to promote. international cooperation and interaction in competition policies/ laws by:
  (1) Improving bilateral cooperation and interaction and consultation.
  (2) Promoting the signing of agreements of international cooperation and interaction in competition policy/law with APEC member economies.
  (3) Offering technical services and personnel training in competition policy/law for developing member economies.
  (4) Participating in the relevant international organizations and conferences.
Reviews of Competition Policies and/or Laws

Improvements Implemented Since Last IAP

In line with the implementation of the Administrative Procedures Law, Chinese Taipei revised relevant laws and regulations, the salient points of which are as follows:
1. Certain provisions of the "Enforcement Rules of the Fair Trade Law" and the "Supervisory Regulations of Multi-level Sales" were elevated to the stature of principal law.
2. Revised the relevant procedures and guidelines pertaining to the review of applications for mergers and concerted actions.
3. Revised the relevant procedures and guidelines pertaining to the perusal of relevant information by the principal.
4. Reviewed and amended the "Simplified Procedures for Review of Merger of Enterprises" and formulated the "Guidelines for Handling Cross-border Merger Applications."
Current Competition Policies and Arrangements
1. 1. Additions and revisions to the Commission's relevant case handling guidelines were made in conjunction with the formulation and revision of relevant laws in the energy sector.
2. 2. To ensure fair market competition, the "Guidelines to the Liberalization of the Power Industry Market and Fair Competition" was formulated in conjunction with the revision of the Power Industry Law.
Further Improvements Planned

Chinese Taipei will:
1. 1. Carry out feasibility studies to determine whether to adopt a "complaints system" in relation to mergers.
2. 2. Carry out feasibility studies to determine whether to add to or revise the types of exceptions allowed in relation to concerted actions.
Competition Institutions including Enforcement Agencies
Improvements Implemented Since Last IAP

Chinese Taipei completed the "Draft Revision of Organic Statute of the Fair Trade Commission" which expressly requires confidentiality from the competition law competent authority to safeguard fair trade administrative procedures.

Current Competition Policies and Arrangements

No further action required.

Further Improvements Planned

No further action planned

Measures to deal with Horizontal Restraints
Improvements Implemented Since Last IAP

Chinese Taipei completed the "Draft Revision of the Fair Trade Law," in which additions and amendments were made concerning the period for reviewing applications for concerted action, the conditions for such approvals, and the revocation thereof.

Current Competition Policies and Arrangements

Chinese Taipei is :
1. Investigating and handling cases pertaining to horizontal restraints that impede competition.
2. Reviewing applications for concerted action and determining whether to approve such applications.
3. Assisting industries to establish compliance programs.
4. Reviewing the necessity of adding to or revising the types of exceptions allowed in relation to concerted actions.
Further Improvements Planned

Chinese Taipei will:
1. Investigate and handle cases pertaining to horizontal restraints that impeded competition.
2. Continue assisting industries to establish compliance programs.
3. Review the necessity of adding to or revising the types of exceptions allowed in relation to concerted actions.
Measures to deal with Vertical Restraints
Improvements Implemented Since Last IAP

No action taken since last IAP report.

Current Competition Policies and Arrangements

Chinese Taipei is:
1. Investigating and handling cases pertaining to resale prices maintenance by enterprises; acts that impede fair competition; damage to the business reputation of others; false or misleading representations, symbols, and advertising ; and other deceptive or obviously unfair conducts that affect order in trade.
2. Assisting industries to establish compliance programs
Further Improvements Planned

Chinese Taipei will:
1. Investigate and handle cases pertaining to resale price maintenance by enterprises; acts that impede fair competition; damage to the business reputation of others; false or misleading representations, symbols, and advertising ; and other deceptive or obviously unfair conducts that affect order in trade.
2. Assist industries to establish compliance programs.
Measures to deal with Abuse of Dominant Position
Improvements Implemented Since Last IAP

In line with the liberalization of the domestic telecommunications market and to promote competition of the relevant industries, the "Fair Trade Law Guidelines for Telecommunications Enterprises" was formulated to regulate the possible abuse of dominant position by the relevant enterprises.

Current Competition Policies and Arrangements

Chinese Taipei is:
1. Investigating and handling cases pertaining to abuse of dominant position by monopolistic enterprises to impede competition.
2. Assisting industries to establish compliance programs.
3. The following measures were taken in line with the liberalization of the power industry market and to ensure fair market competition: establishment of a fair competition mechanism; additions and revisions to the Commission's relevant case handling guidelines; compilation of distribution information on the energy market and relevant literature from other economies; and the formulation of "Guidelines to the Liberalization of the Power Industry Market and Fair Competition."
Further Improvements Planned

Chinese Taipei will:
1. Investigate and handle cases pertaining to abuse of market dominant position by monopolistic enterprises to impede competition.
2. Assist industries to establish compliance programs.
Measures to Deal with Mergers and Acquisitions
Improvements Implemented Since Last IAP

In line with the trend of international enterprises toward mergers and acquisitions, and to promote competition within the relevant industries, amendments were made to the "Guidelines for Application for Merger of Enterprises" and "Simplified Procedures for Review of Merger of Enterprises," together with the formulation of the "Guidelines for Handling Cross-border Merger Applications." The efforts not only shortened the time required for reviewing applications for mergers, but also provided fair, just, standardized, and transparent review processes for cross-border mergers.

Current Competition Policy and Arrangements

Chinese Taipei is:
1. Reviewing applications for mergers and determining whether to approve such applications.
2. Investigating and handle cases involving illegal mergers.
3. Using simplified review process, based on existing criteria, to review and approve mergers. The simplified process will reduce impact on market mechanisms.
4. The outcome of cross-border mergers is controlled so that the principle of equality and mutual benefit shall be applied to regulate cross-border mergers that will have larger impact on domestic competition.
Further Improvements Planned

Chinese Taipei will:
1. Review applications for mergers and determine whether to approve such applications.
2. Investigate and handle cases involving illegal mergers.
3. Promote the simplification of the merger application and review process.
4. Carry out feasibility studies to determine whether to adopt a "complaints system" in relation to mergers.
Other Issues Addressed by Competition Policy
Improvements Implemented Since Last IAP

Chinese Taipei has:
1. Added provisions stipulating the scope of authorization for multi-level sales.
2. Added the guidelines for perusal of information by the principal, its restrictions, and basis for authorization.

Current Competition Policy and Arrangements

Chinese Taipei is:
1. Strengthening regulations on multi-level sales.
2. Assisting industries to establish compliance programs.

Further Improvements Planned

Chinese Taipei will:
1. Strengthen regulations on multi-level sales.
2. Assist industries to establish compliance programs.

Co-operation Arrangements with other Member Economies
Improvements Implemented Since Last IAP

Relevant member economies proposed that bilateral cooperation agreements be expanded into multi-lateral cooperation agreements.

Current Competition Policy and Arrangements

Chinese Taipei is promoting the development of tangible action plans under the framework of the current cooperation agreement, increase cooperation and exchanges, and discuss with the relevant economies the feasibility of entering into multi-lateral cooperation agreements.

Further Improvements Planned

Chinese Taipei will sign multi-lateral agreements with relevant member economies to improve mutual cooperation in the area of competition law, and work toward the liberalization of regional trade.

Activities with other APEC Economies and in other International Fora
Improvements Implemented Since Last IAP
1. Carried out bilateral meetings with competition law competent authorities of two member economies and four non-members during the year 2000.
2. Continued staff exchange program with the Australian competent authority on competition in the year 2000. Due to the success of the program, both parties agreed to extend the exchange period starting from the year 2001 to further cooperation efforts.
3. Together with the OECD, jointly organized the International Conference on Competition Policies in Kuala Lumpur, Malaysia in December 2000.
4. Actively participated in the different international conferences / activities organized by APEC and WTO in relation to competition policy.
5. Organized the International Conference on Competition Policies / Laws in Taipei in June 2000.
Current Competition Policy and Arrangements

Chinese Taipei is:
1. Carrying out dialogs with other member economies and competition law competent authorities of international organizations, exchange ideas on relevant issues, and cooperate to fight trans-border anti-competition practices.
2. Jointly organizing the Conference on Competition Policies / Laws in 2001 to assist Southeast Asian member economies in promoting and implementing competition policy and laws together with the OECD.
3. Continuing staff exchanges with Australia and seek opportunities to promote relevant projects with other member economies so as to develop the necessary talents.
4. Taking part in the different international conferences to understand the positions of different member economies on competition issues under the framework of global multi-lateral trade, and use such understanding as reference for the Commission in policy formulation and law enforcement.
Further Improvements Planned

Chinese Taipei will:
1. Carry out dialogs with other member economies and competition law competent authorities of international organizations, exchange ideas on relevant issues, and cooperate to fight trans-border anti-competition practices.
2. Jointly organize the Conference on Competition Policies / Laws in 2001 to assist Southeast Asian member economies in promoting and implementing competition policy and laws together with the OECD
3. Continue staff exchanges with Australia and seek opportunities to promote relevant projects with other member economies so as to develop the necessary talents.
4. Take part in the different international conferences so as to understand the positions of different member economies on competition issues under the framework of global multi-lateral trade, and use such understanding as reference for the Commission in policy formulation and law enforcement.
Collective Actions
Improvements Implemented Since Last IAP
1. Carried out regular coordination meetings and workshops with local competent authorities, as well as with judicial and investigation agencies, to foster awareness and communication.
2. Organized regional promotion and training seminars for the industry, academic, government, and consumer organizations.
3. Promoted the Fair Trade law through radio stations, cable TV, buses, fixed-point billboards, newspapers and magazines, to afford the general public a better understanding of the Law.
4. Established a service center and e-mail account to offer legal consultation services.
5. Established a Competition Policy Information and Research Center to provide a forum for consultation services, information inquiries, as well as research and discussions. The "Academic Conference on Competition Policy and Fair Trade Law" and symposiums by foreign academics and experts were also scheduled regularly.
Current Competition Policy and Arrangements

Chinese Taipei is:
1. Establishing channels for promotion and communication to ensure full awareness and compliance with the law.
  (1) Chinese Taipei is continuing to organize regular promotion and training seminars and workshops for the industry, academic, government, and consumer organizations to promote awareness of the Fair Trade Law.
  (2) Chinese Taipei is intensity promoting efforts through radio stations, cable TV, buses, fixed point billboards, newspapers and magazines, to afford the general public a better understanding of the Law.
  (3) Chinese Taipei is expanding the service center and e-mail account functions to cover legal consultation services.
  (4) Chinese Taipei is providing a forum for consultation services, information inquiries, as well as research and discussions through the establishment of the Competition Policy Information and Research Center, and to schedule the "Academic Conference on Competition Policy and Fair Trade Law" regularly.
2. Continuing to carry out regular coordination meetings or workshops with local competent authorities, as well as with judicial and investigation agencies, to promote awareness and communication.
Further Improvements Planned

Chinese Taipei will:
1. Continue to expand the current channels for competition policy and competition law promotion to foster the transparency of the relevant laws and regulations.
2. Continue to expand the international competition policy database.
  (1) To compile literature on competition policy and competition laws;
  (2) To maintain and update the competition policy electronic database;
  (3) To publish Competition Policy Newsletter (Chinese-language and English-language versions) regularly.
Improvements in Chinese Taipei's Approach to Competition Policy Since 1996
General Policy Position
Position at base year (1996)

The Fair Trade Commission under the Executive Yuan (hereafter referred to as the Commission) is the Fair Trade Law competent authority at the central government level. The Commission's main responsibilities are to draft fair trade policies and laws, as well as to establish, based on its authority or complaints received, a set of fair and just guidelines to protect order in trade, ensure free competition among the enterprises on an equal basis, improve business operations efficiency, and promote fair allocation of economic resources through the implementation of the Fair Trade Law. The consumers will thus be able to enjoy quality goods and services at reasonable prices.

Cumulative Improvements Implemented to Date
1. Establish of a fair trade system to foster free competition.
  (1) Removal of unnecessary restrictions. A Deregulation Task Force was established in December 1996 to review market regulations, laws, and other regulations that might impede fair competition, and to review laws that were inconsistent with the spirit of the Fair Trade Law. The Deregulation Task Force was able to achieve several tangible results.
  (2) Revision of the Fair Trade Law and its subordinate regulations. (Refer to Reviews of Competition Policies and/or Laws.)
  (3) Formulation of guidelines for the handling of cases pertaining to fair trade. (Refer to Reviews of Competition Policies and/or Laws.)
  (4) Formulation of fair trade administrative procedures.
2. Investigate of alleged violations of the Fair Trade Law and maintaining market competition and order. Since the implementation of the Fair Trade Law, the Commission has handled 1,414 cases of violation of the Law, and has imposed fines totaling more than NT$247 million. In addition, 4,932 different types of applications were approved, while 1,310 interpretations of the Law were issued. A comprehensive structure for the development of domestic market competition is thus established.
3. Establish of promotion and communications channels to foster awareness and strict adherence to the Law. Over the years, the Commission has carried out strict implementation of the Law to promote competition policy and competition law transparency and foster the general public's better understanding of the Law. In addition, the Commission has utilized the different media to disseminate the spirit and contents of the competition law to the industry, government, and academic sectors, both domestic and abroad. It is hoped that the efforts will help create a sound competitive environment and enhance fairness in trade.
4. Establish of a Competition Policy Information and Research Center in 1997, dedicated to compiling information on local and foreign competition law and policies and promoting academic exchanges.
5. Promote of international cooperation and exchanges to foster the internationalization of the Fair Trade Law and refer to Co-operation Arrangements with other Member Economies Activities with other APEC Economies and in other International Forums.
Reviews of Competition Policies and/or Laws
Position at base year (1996)

Chinese Taipei started to implement the Fair Trade Law in February 1991. The Law expressly prohibits the following anti-competitive acts:
1. Abuse of one's monopolistic position;
2. Acqusitions or mergers that restricts competition;
3. Concerted actions without prior approval;
4. Resale price maintaince;
5. Actions that restrict or impede fair competition;
6. Misleading representation;
7. False or misleading advertisement;
8. Damage to business reputation of others;
9. Illegal multi-level sales;
10.Other deceptive or obviously unfair practices.

Cumulative Improvements Implemented to Date
1. Since 1996, no significant changes were made on Chinese Taipei's competition policy and competition law (the Fair Trade Law) in relation to the subjects and behaviors under their jurisdiction, as well as the enforcement thereof. However, taking into account transparency, standardization, and enforcement fairness, relevant laws and regulations were revised in 1999 and 2000 as follows:
  (1) Enforcement procedures:
  To ensure transparency, standardization, and fairness of the enforcement procedures, eight guidelines were formulated in relation to the principal's peruse of data and information, actions and statements, and cases involving foreign nationals or entities.
  (2) Actual implementation:
  a. Abolished the requirement to announce via public notice the names of monopolistic enterprises holding a market share reaching one fifth (1/5);
  b. Administrative fines may be imposed on violations. The amount of maximum fines was increased and a lower limit for the fines was set.
  c. For violations of the Law, administrative penalties will be imposed on the first offense, while criminal penalties will be imposed for subsequent violations. The amount of maximum fines was likewise increased.
  d. Tightened regulations on multi-level sales and impose appropriate penalties for violations.
  e. Established the Fair Trade Law as the fundamental economic law that serves as the basis for harmonizing competition and industrial policies.
  f. For the prohibitions on resale price restrictions, exemption for "consumer goods for daily use" was removed.
  g. Formulated 53 additional (revised) corrective measures and 70 guidelines based on the characteristics of different industries to help substantiate the abstract legal concepts of the Fair Trade Law, and to serve as references for the competent authority and industries in the implementation of the Law.
2. As of end of the year 2000, there were a total of 19,787 cases received, 12,443 cases of which were handled and closed. A total of NT$247 million in fines was imposed, and fines during the last year reached NT$155 million. With the implementation of the revised Law in February 1999, administrative penalties will be imposed on the violators and subsequent offenses will be punished by imprisonment or fine or both. In addition, the revised Law provides for higher amounts of fine that significantly deters the illegal acts and help restore market order to ensure fair competition.
Competition Institutions Including Enforcement Agencies
Position at base year (1996)
1. Fair Trade Commission (hereafter referred to as the Commission, www.ftc.gov.tw) is the Fair Trade Law competent authority at the central government level. The competent authority at the municipal or provincial level is the municipal or provincial Department of Reconstruction, and the city or county government at the city or county level.
2. Relevant provisions: Article 9 of the Fair Trade Law
Cumulative Improvements Implemented to Date

1. In conjunction with the restructuring of the Taiwan Provincial Government and the passage of the Local Autonomy Law, the stipulation relating to the competent authority in the municipal or provincial level was deleted in April 2000.
2. For the revised articles of the Fair Trade law, please refer to http://www.ftc.gov.tw.
Measures to Deal with Horizontal Restraints
Position at base year (1996)
1. The Fair Trade Law in principle forbids horizontal concerted actions that are likely to impede competition, except in special cases. The Commission ensures free competition by strictly prohibiting and punishing enterprises that disrupt market mechanisms, such as production, trade of goods, or supply and demand of services, through horizontal concerted actions.
2. Relevant provisions: Article 14 of the Fair Trade Law
3. The Commission further formulated "An Explanatory Note on Trade Associations Under the Fair Trade Law," "Principles for the Assessment of Concerted Pricing by Small or Medium-sized Enterprises to be Approved as an Exception," and "Procedures for Handling Applications for Concerted Actions of Enterprises" to tighten its regulation on concerted actions by enterprises.
Cumulative Improvements Implemented to Date

1. As of end of the year 2000, the Commission imposed penalties to 66 cases of illegal concerted actions. The Commission's strict enforcement of the Law helps to uphold order in trade. In addition, the Commission granted approvals to 101 applications for concerted actions. Although there are currently 13 valid concerted action cases, the Commission has closely monitored the said concerted actions upon their approval. Violators will be strictly punished.
2. Administrative guidance were given to the textbook publishing, flour, cram school, and gravel industries for their habitual engagement in horizontal concerted actions that impede competition.
Measures to Deal with Vertical Restraints
Position at base year (1996)

1. Formulated guidelines for the major types of cases handled to maintain order in trade; formulated the "Guidelines for Handling Actions That are Likely to Impede Fair Competition" along with two other handling guidelines and administrative guidance for the industries, so as to promote the standardization and transparency of law enforcement.
2. Relevant provisions: Articles 18, 19, 20, and 22 of the Fair Trade Law

Cumulative Improvements Implemented to Date

1. As of end of the year 2000, the Commission handled 25 cases relating to resale price fixing and 76 cases relating to actions that impede fair competition.
2. Administrative guidance were given to the publishers of school textbooks, as well as enterprises engaged in the sale copier machines, elvators, and intercoms, on actions that infringe upon the Fair Trade Law.

Measures to Deal with Abuse of Dominant Position
Position at base year (1996)

1. The Fair Trade Law allows the presence of monopolies but prohibits monopolistic enterprises to abuse their dominant position through unfair actions. The Commission has actively investigated and regulated violations by monopolistic enterprises to promote free market competition.
2. Relevant provisions: Article 10 of the Fair Trade Law

Cumulative Improvements Implemented to Date

1. As of end of the year 2000, the Commission imposed penalties on two cases for violations of the Fair Trade Law.
2. Relevant industry regulations were formulated for the cable TV and telecommunication industries.

Measures to Deal with Mergers and Acquisitions
Position at base year (1996)
1. The Fair Trade Law in principle allows mergers, except in special cases. To prevent mergers of enterprises thus resulting in diminished or restrictive competition, the Commission requires that mergers of enterprises reaching a specified scale shall file a merger application with the Commission prior to the merger.
2. In response to the need of enterprises to transform business operations and expand business scale, the Commission formulated different laws and regulations that would facilitate the handling of merger applications. The Commission formulated the "Guidelines for Application for Merger of Enterprises" and Simplified Procedures for Handling Applications for Merger of Enterprises" to serve as the basis for handling merger cases and ensure transparency and standardization in the regulation of merger of enterprises.
3. Relevant provisions: Articles6, 11 and 40 of the Fair Trade Law
Cumulative Improvements Implemented to Date
1. As of end of the year 2000, 18 cases of illegal mergers were penalized, and another 5,522 applications for mergers were approved.
2. In line with the trend of international enterprises toward merger and acquisitions, and to promote competition within the relevant industries, the criterion for merger application was eased to NT$5 billion in February 1999. (The original provision stipulated that an application for merger should be filed if the amount of sales in the preceding fiscal year of an enterprise participating in the combination exceeded NT$2 billion.) In addition, amendments were made to the "Guidelines for Application for Merger of Enterprises" and "Simplified Procedures for Handling Applications for Merger of Enterprises," together with the formulation of the "Principles for Batch Review of Applications for Merger of Convenience Stores" and "Guidelines for Handling Cross-border Merger Applications." The efforts not only shortened the time required for reviewing applications for mergers, but also provided fair, just, standardized, and transparent review processes for cross-border mergers.
Other Issues Addressed by Competition Policy
Position at base year (1996)

1. The Fair Trade Law also regulates false or misleading advertising, multi-level sales, and other deceptive or obviously unfair acts that are sufficient to affect order in trade.
2. Relevant provisions: Articles 21, 23, and 24 of the Fair Trade Law

Cumulative Improvements Implemented to Date
1. As of end of the year 2000, the number of penalties imposed by the Commission for various violations were as follows: 18 cases involving counterfeiting commodities or trademarks; 730 cases involving false or misleading representation, symbols, and advertising ; 10 cases involving damage to business reputation of others; 461 cases involving deceptive or obviously unfair conducts; 134 cases involving illegal multi-level sales; and 62 other cases.
2. There were 2,063 cases of document filing on multi-level sales, and another 1,422 cases that were revoked. As of end of the year 2000, there were 644 approved cases of multi-level sales that are still in operation.
3. Administrative guidance was carried out on real estate agents, daily commodities industry, liquor industry, weight loss company, travel industry, multi-level sales, housing industry, and cram school industry.
4. Over the past four years, the Commission has continued to investigate and impose penalties on violations that are closely related to the consumers and have major adverse impacts on the interest of the general public, such as those involving real estate transactions, credit card revolving interests, and sale of car insurances.
Co-operation Arrangements with Other Member Economies
Position at base year (1996)

A cooperation and coordination arrangement was entered into between the Taipei Economic and Cultural Office and the Australian Commerce and Industry Office in 1996 regarding the application of the competition and fair trading laws.
http://www.apeccp.org.tw/doc/Taipei/Cooperation/tpeaus.html

Cumulative Improvements Implemented to Date

A cooperation and coordination arrangement was entered into between the Taipei Economic and Cultural Office and the New Zealand Commerce and Industry Office in 1997 regarding the application of the competition and fair trading laws.
http://www.apeccp.org.tw/doc/Taipei/Cooperation/ctcoo01.html

Activities with other APEC Economies and in other International Fora
Position at base year (1996)

1. Chinese Taipei organized international academic symposiums and invited the participation of representatives from Europe, the United States, and the Asia-pacific region.
2. Chinese Taipei participated in international conferences on competition laws.

Cumulative Improvements Implemented to Date
1. Bilateral meetings
  Continue to carry out bilateral meetings with the competition law competent authorities of the United States, Canada, New Zealand, Australia, France, Germany, the U.K., the Netherlands, Sweden, and the European Union, and communicate ideas on issues such as the latest developments in the implementation of competition law, international cooperation, promotion of competition policy, and deregulation.
2. Participation in multi-lateral discussion between the different economies
  Actively participate in the conferences of the Working Group on the Interaction Between Trade and Competition Policy (WGTCP) was established by WTO in 1997. These participation will improve realization in international competition regulations. Promote participation in international economic and trade organizations
  Actively participate in APEC, WTO, and OECD conferences related to competition issues, and disseminate information regarding the status and results of the implementation of competition laws in Chinese Taipei; exchange of legislative and law enforcement experiences other member economies to vie to become an observer to the OECD Competition Law and Policy Committee.
3. Personnel exchanges and visits
  (1) Exchange of visits annually among government officials:
  Exchange of visits with the competition law competent authorities of the United States, the U.K., Germany, Sweden, France, Australia, New Zealand, Japan, and the European Union. The visits are beneficial to improving law enforcement, formulation of competition policy, and policy implementation.
  (2) Staff exchange:
  Since 1999, Chinese Taipei and the Australian Competition and Consumer Commission (ACCC) has arranged for exchange of staff regularly to better understand each other's competition law enforcement and related activities. The arrangement is a manifestation of the successful cooperation between the competition law competent authorities of Chinese Taipei and the Australia.
4. Provision of technical assistance
  Chinese Taipei and OECD jointly organized two international conferences on competition policy in Thailand and Malaysia at the end of 1999 and 2000 respectively. The aim of the conferences was to assist developing member economies in their formulation of competition laws and the training of required personnel.
5. Creation of competition policy database
  In May 1997, Chinese Taipei, upon the approval of APEC CTI, began establishment of the APEC Competition Policy and Law Database (http://www.apeccp.org.tw). The database was completed and open to public perusal in May 1999.
6. Organize international academic conferences
  The Commission holds international conference on competition policies / laws regularly, inviting experts, scholars, and government officials from member and non-member economies, as well as representatives from WTO, OECD, and the European Union. Through brainstorming and pooling of wisdom, the conferences offer consensus to the competition policy in the new century, which will foster the development of a fairer, more efficient global competitive environment .