Abstract:

The "concerted actions" engaged in by businesses will substantially weaken the competition among businesses and thus create an adverse effect on the function of the market. As a result, preventing and investigating unlawful concerted actions has been one of the important subject matters to be regulated by the competent authorities under the Fair Trade Law or Antitrust Law for several leading countries in the world. However, "uniform actions in the monopoly market" remains an unfamiliar term in theory and in actual cases since the implementation of the Fair Trade Law. It is mainly due to the fact that concerted actions can be easily found in a monopoly market but it is very difficult to prove the existence of concerted actions engaged in by businesses. In addition, it is difficult to distinguish between uniform actions and voluntarily parallel actions. The controversy in regulating uniform actions even occurred in the United States where the implementation of the Antitrust Law has been very successful. It has been 10 years since the implementation of the Fair Trade Law in Chinese Taipei. However, the concept of law and discipline has not yet firmly ingrained in the mind of the general public. In order to avoid violating the Fair Trade Law, businesses have used various kinds of concerted actions. In determining whether concerted actions have been engaged in by businesses, the competent authorities should consider some circumstantial evidence such as the relevant market structure, the repeated and circulated actions of businesses and the actual impact on the market competition instead of using written contracts or agreements. This will become an important task for the Fair Trade Commission in enforcing the Fair Trade Law. The purpose of this research is to examine and discuss the aforementioned "uniform action" issue and call for concern and attention from scholars and specialists to contribute their comments and suggestions.

This study initially reviews the wheat and flour market in Chinese Taipei and next analyzes the flour market structure and defines the boundary of the flour market. In addition, the study describes some changes in the importation of wheat since the Fair Trade Commission was established and addresses some possible improvements in operating the current unified wheat importation system after joining the World Trade Organization (WTO) for the purpose of providing a direction for the Fair Trade Commission to enforce the Fair Trade Law in the future. After the application of "two stages game theory" and use of "cut throat competition strategy", a relevant causation between "excess capacity" and "tacit collusion" can be developed among businesses. The model of excess capacity advanced by the economic scholars Osborne and Pitchik supported this conclusion. This study has developed some criteria and procedures for the determination of uniform actions from the legal point of view. The study concludes that in considering the opinions provided by the Fair Trade Commission regarding uniform actions and the cases of quota engaged in by the wheat importers, there is no conflict in the relevant regulations on uniform actions between Chinese Taipei and other leading nations in the world.

There are several criteria to consider in determining a "uniform action" which are:

(1) Economic Point of View
In Osborn and Pitchik's model of "excess capacity", after businesses have applied "two-stage game theory" and have used "cut throat competition strategy", a relevant causation between "excess capacity" and "tacit collusion" can be developed.
(2) Legal Point of View

1. Subjective Element: businesses have agreed on uniform actions and have actually taken action.
2. Objective Element: There is no competition among businesses. This has weakened the market competition and resulted in an adverse effect on resource distribution.
3. Proof: the method of proving uniform actions includes the adoption of
circumstantial evidence and development of reasonable doubts. The most important issue in determining a concerted action is to prove the existence of an agreement among businesses to engage in such a concerted action. The limitation on agreement of a concerted action developed under the Fair Trade Law is to maintain market competition and avoid human control. The "uniform action" theory is also developed to meet the aforementioned demand.

The elements of a concerted action are the foundation for the Fair Trade Law to regulate such an action. The principles in determining a uniform action has become the most important key point in implementing the Fair Trade Law. Therefore, based on the information acquired from the study, several suggestions are provided:
(1) Enhancing the collection of market information and data
The establishment of regulation requires an overall understanding of the facts before taking any legal action. In order to conduct the actual investigation and research on businesses and actions, the most important task for FTC is to extensively collect data of the businesses and take total control of market information such as the long-term average variable costs, margin costs, fixed costs, international market and different quotations in various businesses. In determining a uniform action, the long-term collected statistics and market information will become the basis of circumstantial evidence in presuming an agreement on a uniform action among businesses.

(2) Enhancing research on actual situations and economic analysis
FTC should strongly encourage staff and scholars to conduct actual case study and economic analysis so that a theoretical foundation can be established. Through the case study and research on economic analysis, the history and current status, the characteristics, the format of organization and agreement, the pattern and degree for trade association involvements and conditions of achieving united goal, general enforcement from inside and outside and the impacts on the certain business market caused by concerted action among businesses can be realized. The understanding of concerted action among different businesses can also be established.

(3) Be aware of recent development and relevant research of the Fair Trade Law from other leading nations
The development of competition law in Japan, the United States, Australia and European countries is several years ahead of Chinese Taipei. The competition problem among domestic industries has focused mainly on concerted actions. Therefore, the regulation of concerted actions is an important task for the Fair Trade Commission. If the Fair Trade Commission wants to improve the efficiency in enforcing the Fair Trade Law, the Fair Trade Commission must (1) get familiar with the recent development and relevant research of the Fair Trade Law from other leading nations in order to provide the basis for future modification of the Fair Trade Law; and (2) learn from foreign antitrust bureaus their experience in regulating concerted actions.

(4) Developing principles in regulating concerted actions
It has been 10 years since the implementation of the Fair Trade Law. A considerable amount of cases involving concerted actions have been accumulated and decided by the Fair Trade Commission. In the future, through the analysis of actual cases, the Fair Trade Commission will be able to establish principles and procedures in regulating concerted actions. These principles and procedures in regulating concerted actions will provide guidance for businesses in complying with the Fair Trade Law and will provide a basis for the Fair Trade Commission in deciding concerted action cases.

Written by
Ma Tay-Cheng, Wu Te-Sheng, Hou Vh-Hsien (Second Department)