1. Background of the Study
As the regulatory authority of Taiwan's competition policy and the Fair Trade Law, the Fair Trade Commission (hereinafter referred to as the FTC) is the guardian of economic market competition order in the country. To achieve the administrative goal of promoting fair trade, reinforce market competition function, and create economic stability and prosperity, the FTC, on the one hand, maintains market competition mechanisms and trading order through active enforcement of the Fair Trade Law by investigating and sanctioning violations and correcting illegal business practices. On the other hand, through developing the "competition culture," the FTC hopes to achieve the three following goals: First of all, make related government agencies understand the significance to incorporate competition factors in the policies they make and that such incorporation ought to become a regular practice; secondly, encourage businesses to abide by fair trade regulations to reduce the risk of getting punished for their illegal actions, prevent cost increase resulted from tainted business reputation, and increase the benefit from the image of being law-abiding businesses; thirdly, educate consumers on the significance of "competition" to make them understand they are entitled to demand decision-makers to bring in more competition factors into the market to enliven market competition and thus make consumers "wise" money spenders.
However, the development of the "competition culture" relies on effective "competition advocacy," while effective competition advocacy requires conveyance of clear and consistent information as well as empirical evidences that "competition benefits economic development" to be the foundation.
Furthermore, the regulatory authority of competition policy also has to sustain trustful relations with decision-makers and actively participate in the legislation of policies that have the potential to affect market competition and provide profession advices to deter or reduce likely negative effects of policies on market competition. Since its creation, the FTC has undertaken competition advocacy in Taiwan for nearly 19 years. The concept of competition may have gradually been accepted by industries and other government agencies, yet there remains room for enhancement in extent and depth. In this study, therefore, the results of the FTC's competition advocacy efforts will be reexamined. The effectiveness of the strategies applied to promote competition advocacy with government agencies, the industrial sector, and the general public will be analyzed from the angle of performance. Hopefully, by assessing the results and comparing them with the advocacy measures international organizations and the US and Canada have adopted, suggestions with regard to future administrative approaches can be formulated and proposed.
2. Methods and Process of the Study
In this study, literature analysis is first applied to sort out and analyze related reports from international competition law organizations and different countries, related researches, books and journal papers, as well as the FTC's publications to establish a clear overall understanding of the meaning and purposes of competition advocacy. The comparative experiences in competition advocacy in foreign countries are also examined. Second, the FTC's competition advocacy efforts and results over the past 19 years are reviewed and sorted out and the comments of the Executive Yuan and the outcomes of surveys on the FTC's performance are inspected to assess the effectiveness of the FTC's competition advocacy measures. Third and lastly, theoretic models for performance management and assessment are applied. Comparison with the empirical experiences overseas is made and domestic competition advocacy measures and formulation of corresponding strategies are scrutinized from the angle of performance. Based on the findings, areas requiring further research as well as directions and approaches of improvement are established to be references for the FTC in future administration.
3. Major Suggestions
According to the findings of this study, two suggestions with regard to assessment of the FTC's competition advocacy and formulation of strategies are proposed:
- Assessment of the results of the FTC's competition advocacy:
- Establishment of an external mechanism to assess the results of competition advocacy
Performance means the efficiency and effectiveness in accomplishing established targets, implying the invested resources should be efficiently turned into output and the output must meet the expected criteria. The performance of competition advocacy is the degree of influence on consumers, businesses, and the market. In other words, it is the influence on the framework of government public policy and regulatory measures to bring them closer to the competition mechanism on the free market or the influence on enterprises or the general public to make them recognize and comply with the competition mechanism on the free market and thus help shape the "competition culture." Hence, it is important that the performance evaluation indicators the FTC sets up can truly provide guidance to achieve the aforesaid competition advocacy objectives. It is therefore suggested that the criteria of the evaluation indicators shall be reexamined employing the practices in the UK and the US, under which influence is taken as the main axle, as references. Qualitative indexes should be added, the base periods of performance evaluation stipulated, and the effects on specific advocacy objects, targets, and interest parties evaluated on a regular basis. The feedback is then included in performance management to be referred to when making adjustments or formulating advocacy strategies for the following stage of advocacy.- Introduction of a mechanism for empirical evaluation of individual market study cases
The amount of resources invested in competition advocacy is usually proportional to the degree of importance of the issue to be advocated, the reason being that most competition issues are related to the development of important industries of a country and therefore often attract public concerns. Take telecommunications industries employing digital convergence for example, the choice of policy tools and the outcome of decisions are not the responsibility of the competent authority of competition law.
Once the competition tools are decided, the impact on the development of the industry in concern is bound to be significant. If the results after implementation appear uncertain, the related policy consolidation agency or the competent authority for the industry will most probably exclude the competition tools from the priority list. Therefore, it is a prerequisite to make sure the argument behind competition advocacy is the best for the concerned industry and will therefore be adopted by the policy consolidation agency or the competent authority for the industry. To achieve this, it is recommended that a mechanism for empirical evaluation of individual market study cases is set up to perform follow-up assessment, or even preliminary evaluation, in order to strengthen the confidence of external organizations in the FTC's advocacy argument.- The FTC's formulation of competition advocacy strategies
- Establishment of the core advocacy targets, the priority order and allocation of resources in line with the development of the nation's important industries and the key areas of the FTC's administration
The ultimate maturity model for performance management is when the organization is able to choose the approach with the most far-reaching influence to achieve, and even surpass, the objectives. Therefore, the most ideal advocacy strategies are the ones that have the largest effect and bring maximum industrial benefits with limited resources. Based upon this concept, it is suggested that when formulating competition advocacy strategies, the development of the important industries and the key areas of the FTC's administration must be taken into account, the priorities of the competition advocacy targets must be established, and division of labor and allocation of resources must be appropriately planned and executed to prevent misplacement of objectives, resources and manpower.- Adjustment of competition advocacy strategies in accordance with the results of internal performance evaluation and external effect assessment
The results of the FTC's competition advocacy efforts over the years may have been inspected on an annual basis or when a special project is completed. However, work items whose targets have not been achieved are not traced and their importance or whether they should be continued is not reviewed. This has resulted in gaps in certain advocacy strategies adopted for the year or in special projects. In addition, there are no external groups, in other words targets of advocacy, to provide feedback for reference. As a consequence, this makes it impossible to precisely identify the best advocacy approach. Therefore, it is suggested that when formulating competition advocacy strategies for the year or special projects, results of internal performance evaluation and effect assessment by external organizations must be taken into consideration.- Benchmark competition advocacy learning
There have long been certain complexity and difficulty in cross-ministry/council cooperation in Taiwan, especially in areas involving no overlapping of legal regulations. As the power of decision-making in policy formulation lies in the hands of the policy consolidation agency or the competent authority for the industry in concern, a large part of the results of the competition advocacy efforts made by the competent authority of competition law rely on the communication and degree of consensus between agencies participating in cross-ministry/council cooperation. Since the ministries and councils hold different views toward the competition policy, such communication and consensus may not be easy to achieve at times. Therefore, it is recommended that the FTC shall act in line with the priorities of the advocacy targets and choose the ministries and councils with higher identification with the competition policy for benchmark cooperation, provide them with technological assistance, exchange professional know-how with them, and set the role models for other ministries and councils.