The Regulations and Measures to Deal with Cartel Behavior at the Era of Globalization

【Abstract】

  1. Research purpose
    A look at the past history of competition law reveals that the said law often changes with economic and environmental development. Nowadays, in the environment that all countries are confronting challenges of economic globalization, the competition law enforcement authorities have encountered the new challenge of implementing competition laws to cope with such changes and thus the revision of regulations to cope with the changes and the manners of law enforcement have become new topics of discussion for the enforcement agencies of competition laws. The competition law is enacted mainly to regulate any cartel behaviors (the concerted action as referred to in the Fair Trade Law). As cartel behavior has great impact on economic development, this study focuses on how the law enforcement agency of the domestic should revise its regulations for concerted action in the wave of economic globalization.
    In order to discuss this topic, this study was organized as the evaluation and role of cartel behavior in history were first explored in order to understand the evolution of regulations for cartel behavior. Beginning with the past development, this study has further sorted and introduced the current regulations for cartel in the leading countries as the background of exploring the regulations in domestic. After that, the main purpose of this study is presented; that is, the regulations and enforcement of the Fair Trade Law in Domestic. This section is divided into two parts for discussions; one part looked back on the experiences of law enforcement, the other part discussed about the trend of future development. This paper is organized in such manner so that suggestions to improve the deficiency can be made after an in-depth study of the law enforcement condition in Domestic.

  2. Research Method
    This research mainly adopted literature reviews and descriptive statistical analysis to explore the topic of this study. These two methods are separately explained as follows:
    1. Literature review: This research method is mainly used in the chapters and sections of cartel development, comparisons of competition laws for each country and measures used by each country in dealing with cartels. This study sorted and analyzed the presently available literatures for further investigation of the topic of this research.
    2. Descriptive statistical analysis: This research method is mainly used to analyze the past cases of the Domestic. Each case is examined subsequently and the important factors for the cases are then quantified and presented in charts. Such presentations helped readers to understand the cases of concerted actions during the past ten years and more of the Fair Trade Commission’s law enforcement.

  1. Major findings, conclusions and suggestions
    This study found the following conclusions and suggestions after using the aforementioned methods to analyze and discuss this research topic:
    1. The descriptive statistical analysis can be used to describe the characteristics of cases handled by the Fair Trade Commission during the years of enforcing the Fair Trade Law in the Domestic. With regard to the concerted action cases that have been punished, such cases in general possess the following characteristics: (1) The majority of the principal subjects in the punished cases are trade associations or other organizations, accounted for about 60 percent of the punished cases; (2) In most cases, with regards to the geographical region, only a single county or city has been affected by concerted actions, the percentage is approximately 57 percent of the punished cases; (3) Most concerted actions are carried out in the means of price restrictions, accounted for approximately 60 percent of all punished cases; the collusive bidding in single tender comes next, accounted for approximately 14 percent of all punished cases; (4) approximately 47 percent of the consensus of concerted actions were not written down, indicating that it is not easy to investigate and ascertain concerted actions. In addition, with regards to the approval of concerted actions, if the cases are compiled according to the exception clauses stipulated in the Subparagraphs of the proviso of the Paragraph 1, Article 14, it is found that most cases are approval of concerted actions to import that stipulated by Paragraph 5, accounted for approximately 48 percent of the total. Such finding can be attributed to the reason that many daily necessities must be imported and concerted actions of importing goods jointly are beneficial to the economy as a whole, but the concerted actions of exporting goods in Subparagraph 4 and the concerted actions during the time of depression in Subparagraph 7 were never seen.
    2. Confronting with the challenges in economic globalization era, the trading of enterprises is no longer bound by the respective national boundaries; instead the enterprises have targeted the global market for their products. Moreover, along with the flourishing of knowledge-based economy, research and development investments are regarded as the impetus of economic growth. The competent authorities of competition laws are confronting the new topic of how to cope with the aforementioned trend in the development of globalization. After studying law enforcement experience of the competent authorities of competition laws in many countries, this study found that every country based on its past experience in law enforcement, has clearly separated the cartel behaviors of enterprises into hard core cartel that would harm competition and thus is restricted, and good joint acts that do not interfere competition and even may promote competition. In the future, the law enforcement of Domestic should endeavor toward the direction of establishing ways to effectively stop the former and to relax controls on the latter so as to promote positive development in economy.
    3. After reviewing the course of law enforcement in Domestic and comparing the law enforcement experiences of every country, the enforcement of the Fair Trade Law in Domestic at least should include the following thinking directions and development tendencies:
      (i) With regards to the cases of trade associations’ concerted actions, in order to effectively stop the concerted action, the entity that have given their “consensus”, that is the trade associations, shall be punished together with the entities that “carry out” the said consensus; that is the individual enterprise. The Fair Trade Commission has adopted this view in its most recent commissioners’ meeting;
      (ii) With regard to concealment problem of concerted actions, the experiences of law enforcements in every country are referred to and the regulation of leniency policy is added into the Fair Trade Law when it is revised. However, it should be pointed out that the Fair Trade Commission should place emphasis on the clear-cut and fairness of law enforcement standards at the time prescribing the relevant regulations so that the said system can be implemented smoothly.
      (iii) In regard to the relaxation of regulations for the exception of concerted actions, the draft of the Fair Trade Law’s revision has added exemption clauses for the general items that can be approved with exception and no punishment for minor cases. The future development should more explicitly define each manner and form of concerted action so that there is a clear-cut standard to distinguish between good cooperation and illegal concerted actions.
      (iv) In the environment of globalizing economy, the international cartel nevertheless does not vanish as a result of competition in global market. The law enforcement agencies from all countries have shown their concerns on this issue. At present, the competent authority of Domestic has maintained friendly relations with several competent authorities of competition law and actively participated in activities of international organizations. In the future, the competent authority should continue to closely exchange and interact with the competent authorities of competition law from other countries in order to enhance the experience exchanges in competition law enforcement and the investigations of international cartel cases.

Researcher: Shin, Chih-Chung, Hung, Shui-Hsing, Chung, Chun-Ting, Liang, Ya-Chin, Cheng, Shih-Yu