The Factor Analysis of Business Concerted Action

Ma Tai-Cherng, Second Department, and Hong Der-Chung, First Department

Abstract:

This report collects 109 representative cases of alleged concerted action that have occurred since the establishment of the Fair Trade Commission, and uses the Probit computational model to analyze factors such as industry structure, product characteristics, entry barriers, cost structure differentials, market segmentation, production methods and consumer habits with respect to their influence on the Commission’s decisions to levy sanctions. This report is provided to the Commission for reference in determining whether concerted actions are in fact unlawful. The results show that the Commission’s administrative measures have had a strong deterrent effect against concerted action. However, along with the accumulation of concerted action cases and the Commission’s thorough explication of the issues, domestic enterprises have come to recognize that the Commission tends to render dispositions against concerted actions only in those cases where a written agreement exists. Thus where concerted action now occurs, it has shifted toward verbal agreements that leave no paper trail or toward tacit understandings never directly communicated between the parties, creating an obstacle to the Commission’s handling of such cases. This kind of difficulty hinders the efforts of the anti-trust enforcement agencies of advanced nations, which are currently engaged in developing countermeasures and establishing enforcement systems for dealing with such concerted actions. Their methods and experiences offer a worthwhile reference for Chinese Taipei.

Written by

Ma Tai-Cherng (Second Department);

Hong Der-Chung (First Department)