Fair Trade Law Q&A - Enforcement and Penalties

A1:

According to Article 27, the Commission, when conducting investigations in accordance with this Law, shall follow the procedures stated below:

1. to notify the parties and any related third party to appear to make statements
2. to notify the parties and any related third party to submit books and records, documents, and any other necessary materials or exhibits and
3. to dispatch personnel for any necessary onsite inspection of the office, place of business, or other locations of the parties and any related third party.

The competent authority may seize articles obtained from the investigation that may serve as evidence. The scope, and duration of holding the seized articles are limited to the need of investigation, inspection, verification, or any other purpose of preserving evidence.

Shall any person subject to any investigation the provisions of Article 27, the FTC may impose an administrative penalty of not less than fifty thousand and not more than five hundred thousand New Taiwan Dollars on violate the provisions. Shall such person continue to evade, interfere or refuse to cooperate without justification upon another notice, the competent authority may continue to issue notices of investigations, and may impose consecutively thereupon an administrative penalty of not less than one hundred thousand and not more than one million New Taiwan Dollars each time until such member accepts the investigation, appears to respond, or renders relevant materials like books and records, documents, or exhibits.

Relevant article(s) of law: Fair Trade Law, Article 27

A2:

To allow concerned parties or stakeholders to assert their rights or protect their legal interests, they may act according to the Fair Trade Commission's file access regulations and fill out the "Fair Trade Commission File Access Application Form" to apply for approval to access, transcribe, photocopy or photograph related information or files.

A3:

1. Monopolistic enterprises abusing their market status (Article 9), businesses engaging in concerted actions (Article 15):
   1. The Fair Trade Commission may order businesses in violation of Article 9 and Article 15 to cease therefrom, rectify their conduct or take necessary corrective measures within a given period and at the same time impose administrative fines ranging between NT$100,000 and NT$50 million. The Fair Trade Commission may continue to impose an administrative fine of between NT$200,000 to NT$100 million on a business failing to cease from continuing its conduct, correct the conduct or take necessary corrective measures within the given period each time until the business ceases therefrom, rectifies its conduct or takes necessary corrective measures.
   2. The responsible person(s) of a business ordered by the Fair Trade Commission in accordance with Paragraph 1 of Article 40 of the Fair Trade Law to cease from continuing its conduct, rectify the conduct or take necessary corrective measures within a given period but failing to comply or engaging in the same conduct again may be sentenced to three years in prison, detained or fined up to NT$100 million or sentenced or detained and fined up to N$100 million at the same time.
2. Businesses imposing restrictions on the resale prices of trading counterparts (Article 19) or engaging in conduct leading to competition restrictions (Article 20)
   1. The Fair Trade Commission may order businesses in violation of Article 19 to cease from continuing their conduct, rectify the conduct or take necessary corrective measures within a given period and at the same time impose administrative fines ranging between NT$100,000 and NT$50 million. The Fair Trade Commission may continue to impose an administrative fine of between NT$200,000 to NT$100 million on a business failing to cease from continuing its conduct, rectify the conduct or take necessary corrective measures within the given period each time until the business ceases therefrom, rectifies its conduct or takes necessary corrective measures.
   2. An offender ordered by the Fair Trade Commission in accordance with Paragraph 1 of Article 40 of the Fair Trade Law to cease from continuing the conduct, rectify the conduct or take necessary corrective measures within a given period but failing to comply or engaging in the same conduct again may be sentenced to three years in prison, detained or fined up to NT$100 million or sentenced or detained and fined up to N$100 million at the same time. If a juristic person is involved, an administrative fine will also be imposed.
3. Business in violation of merger filing regulations or providing false information in merger notifications
   1. Besides forbidding the mergers of businesses merging without applying for approval or merging after intended mergers are prohibited and ordering them to divide their operations, dispose of all or part of the companies' shares, assign part of their operations and dismiss personnel from certain positions within a given period according to Article 39, the Fair Trade Commission may also impose on them administrative fines ranging from NT$200,000 to NT$50 million.
   2. In addition to forbidding the mergers of businesses receiving merger approvals by providing false information in their merger notifications, ordering them to divide their operations, dispose of all or part of the companies' shares, assign part of their operations and dismiss personnel from certain positions within a given period, the Fair Trade Commission may also impose on them administrative fines ranging from NT$100,000 to NT$1 million.
   3. As for businesses failing to comply with the sanction decisions stated in the two preceding paragraphs, the Fair Trade Commission may order them to dissolve, suspend operation or close down.
4. Unfair competition (Articles 21, 23 and 25)

   The Fair Trade Commission may order businesses posting false advertisements (Article 21), giving inappropriate gifts and prizes (Article 23) and engaging in other deceptive or obviously unfair conduct (Article 25) to cease, rectify their conduct or take necessary corrective measures within a given period and also impose on them administrative fines ranging from NT$50,000 to NT$25 million. The Fair Trade Commission may continue to order businesses failing to comply to cease from continuing their conduct, rectify the conduct or take necessary corrective measures within a given period and also impose on them administrative fines ranging between NT$100,000 and NT$50 million each time until they cease therefrom, rectify their conduct or take necessary corrective measures.

5. Responsible persons of businesses making or spreading untruthful statements able to damage the business reputation of others (Article 24) will be sentenced to prison terms of no more than two years, detained or fined NT$50 million or given prison sentences and fines at the same time.

A4:

Article 29 of this Law states that if any enterprise violates any of the provisions of this Law and thereby infringes upon the rights and interests of another, the injured may demand the removal of such infringement, or if there is a likelihood of infringement, prevention may also be claimed. In addition, Article 30 states that any enterprise that violates any of the provisions of this Law and thereby infringes upon the rights and interests of another shall be liable for resulting damages.

If the infringement was intentional, at the time of filing a claim for damages, the injured party may request that the court take into consideration the nature of the infringement and award damages greater than the actual damages incurred but not exceeding three times the amount of proven damages. Where the infringing party gains from its act of infringement, the injured may request assessment of the damages based exclusively on the monetary gain to such infringing party. No claim for damages will be allowed unless the right is exercised within two years after the claimant becomes aware of the act and the person liable for the damages; nor will a claim be allowed after a lapse of ten years from the time of the infringing conduct. In filing a suit with a court in accordance with this Law, the injured may request the content of the judgment to be published in a newspaper at the expense of the infringing party.

Relevant article(s) of law: Fair Trade Law, Articles 29 and 30