Abstract

This research focuses on the definition of cartels and the statutory exemptions of cartels from the general prohibition of cartels according to the Taiwan Fair Trade Law (FTL). It starts with a comparative study of the regimes of European Union, Germany and the United States of America, which all show a clear tendency towards the recognition of the positive effects of horizontal cooperation between competitors that merit a differential treatment of such cartels and of the needs of undertakings to have greater certainty in complying with law on cartels.

This research comes to the following conclusions and suggestions for the reform of FTL with regard to the regulation of cartels:

1. Differential treatment of cartels in terms of constituting components and legal consequences is necessary.
2. Only those cartels that constrain, distort or hinder competition shall be prohibited.
3. In general, small and medium-sized undertakings need to cooperate in order to counter-balance the market power of big competitors. Therefore cartels made by small and medium-sized undertakings shall be light-handed regulated than the other cartels, such as notification and opposition.
4. If it is to be presumed that a cartel exists in light of the concerted acts, it shall take place via revision of the FTL.
5. A general clause that exempts cartels from the prohibition is also needed.
6. Import and export cartels shall be outlawed.
7. The enforcement of the FTL with regard to cartels that are of local importance shall lie in the hands of local governments.
8. Members of the Boards of Directors of unions of undertakings shall be held liable for the cartels made by such unions.
9. The Fair Trade Commission shall simply its control over cartels by setting up block exemptions and safety zones for undertakings to cooperate.