1. Background of the Study
In light of the serious impact of hard core cartels on trading order, countries around the world have listed them as illegal operations. However, as the operations of hard core cartel are usually difficult to detect, the greatest challenge in uncovering and stopping such actions lies in the capability to see through the concealed operations to obtain evidence of illegal conduct. A study on the leniency policy adopted in various countries to fight hard core cartels can help crack the code of silence between cartelists. This is why the member states of the Organization for Economic Cooperation and Development (OECD) have adopted the leniency policy one after another.
According to the experiences of foreign governments, implementation of leniency policy not only reduces the cost of investigation conducted by the competent authority, enables early detection of illegal conduct, and contains the spread of damage but also has the effect of prevention and deterrence, indicating that the use of this policy has achieved remarkable results.
However, due to the dissimilarities in the definition and sanctioning of hard core cartels among the competition laws of different countries, the leniency policy of every country also carries different contents. If Taiwan intends to adopt leniency policy, it is absolutely necessary to understand beforehand the corresponding legislation and latest developments in these countries.
2. Methods and Process of the Study
The focus of this study is set on the leniency policy and related regulations in different countries, including the content of the policy, the application conditions, and the latest tendency. At the same time, some suggestions with regard to addition of leniency policy to the Fair Trade Law in Taiwan and the corresponding enforcement regulations will be proposed. Hopefully, through collection and thorough analysis of available information, Taiwan will be able to introduce the leniency policy most appropriate for the legal system and the general circumstances of the country.
The methods employed in this study are literature analysis and empirical analysis that are commonly used in social science researches. The former is applied to the collection and examination of information related the legal background of leniency policy and pertaining literature from OECD member states and other developed countries, while the latter is adopted to analyze precedents in relation to leniency policy in comparative laws. Meanwhile, concrete suggestions concerning implementation of leniency policy will also be presented in this study as useful references for formulation of regulations with respect to leniency policy and related regulations.
3. Major Suggestions
To ensure that leniency policy can be effectively enforced, it will be necessary to establish a complete framework of regulations under the authority of the Fair Trade Law to perfect the procedural details. Under the Fair Trade Law and the current practice of "administrative procedure before judicial procedure"when penalties against concerted actions are ruled, the "administrative leniency"prescribed in Article 44 of the Draft revised version of the Fair Trade Law practically has the same legal effect of exempting or reducing the administrative fines for offenders in leniency policy. Therefore, as the competent authority, the FTC should study precedents of administrative fine sanctions handed out in EU countries and formulate a "Draft of Regulations Governing Implementation of Exemption or Reduction of Administrative Fines against Illegal Concerted Actions."In addition to the precedents from EU countries, the FTC should also analyze the revision developments of leniency policy in other parts of the world, where leniency policy has also been practiced for quite a long while, to identify the common principles and adopt them as references for the details of the draft:
- The smaller the quota of confessing offenders to be granted administrative fine reduction or the larger the degree of fine reduction for earlier confessing offenders, the stronger the incentive for concerned parties to apply for leniency treatment and the better the legal effects of the leniency policy.
- According to the experiences of different countries, when the application conditions are unspecific and vague or the competent authority is given too much discretion, most businesses will not be interested in applying for leniency treatment. On the contrary, if the regulations and application conditions are objective and precise and leniency is automatically granted as long as the statutory requirements are met, concerned parties are bound to be more interested in applying for leniency treatment.
- After leniency applications are accepted, to ensure that applicants will fulfill their obligations, such as providing cartel operation information and offering assistance to concerned agencies in investigations and evidences collections so that the purpose of leniency policy can be achieved, most countries have also adopted "conditional agreement"clauses in which applicants' obligations and punitive revocation of the agreement against applicants failing to cooperate in investigation or fulfill their obligations are clearly stipulated.
As the adoption of leniency policy will be a brand new segment of the Fair Trade Law in Taiwan, how the FTC, the competent authority to process applications for leniency treatments, should run its internal operating procedure once the corresponding regulations are implemented shall require consultations through commission meetings and cross-division/office meetings to reach consensus and work out concrete and feasible process rules that comply with protection of legal rights.