Fair Trade Law Q&A - General Provisions

What amendments have been made to the Fair Trade Act over time?

1. First Amendment (1999)
   The "Draft Amendments to the Fair Trade Act" was passed on third reading by the Legislative Yuan on January 15, 1999, promulgated by the President on February 3, 1999, and entered into force on February 5, 1999. A total of 20 provisions were added or amended. The principal revisions are as follows:
   1. Deletion of the provisions requiring public designation of monopolistic enterprises and enterprises holding one-fifth of market share (former Article 10, paragraph 2, and Article 11, paragraph 2);
   2. Imposition of administrative fines directly for violations, and revising both the maximum and minimum amounts of such fines (former Articles 40 and 41);
   3. Adoption of the principle of "administrative enforcement preceding judicial proceedings", and increasing criminal fines (former Articles 35, 36, and 37);
   4. Strengthening of the regulation of multi-level marketing, and introducing appropriate sanctions for violations (former Articles 23, 23-1, 23-2, 23-3, 23-4, and 42);
   5. Confirmation of the Act's status as a fundamental economic law, and emphasizing the coordination between competition policy and industrial policy (former Article 46);
   6. Elimination of the exemption provisions allowing daily commodities to be excluded from resale price maintenance restrictions (former proviso to Article 18, paragraph 1, and paragraph 2).
2. Second Amendment (2000)
   Article 9 was amended and promulgated on April 26, 2000. Provisions concerning provincial-level competent authorities were deleted to conform with the "Provisional Statute for the Reorganization of Taiwan Provincial Government and the Local Government Act."
3. Third Amendment (2002)
   In order to align with the Administrative Procedure Act implemented on January 1, 2001, the Fair Trade Commission drafted the "Amendments to Provisions of the Fair Trade Act" and submitted it to the Executive Yuan on May 1, 2000, for review and forwarding to the Legislative Yuan. The Executive Yuan completed its review on August 2, 2000, and subsequently submitted it to the Legislative Yuan for deliberation. In 2001, the Fair Trade Commission, in light of the fact that domestic enterprises were facing the competitive pressures of economic globalization in the 21st century, and considering the competitive advantages of large multinational corporations as well as the structures of the domestic economic environment, recognized that mergers and acquisitions had become a significant competitive trend. To respond to this industrial restructuring and the needs of the economy development, while also safeguarding the market competition mechanism, and in accordance with the consensus reached in the industrial group meeting of the Economic Development Advisory Committee-that the government should simplify procedures, remove barriers, and provide incentives for mergers and acquisitions. The Commission further referred to foreign legislation on merger control in competition law and drafted the "Amendments to Provisions of the Fair Trade Act". This draft was submitted to the Executive Yuan on August 31, 2001, and was reviewed and submitted to the Legislative Yuan for joint review on October 17 of the same year.
   The Legislative Yuan completed the third reading of the bill on January 15, 2002. It was promulgated by the President on February 6 of the same year and came into force on February 8. A total of 15 articles were added or amended in this revision. The key revisions are as follows:
   1. The merger control regime was changed from a "prior approval system" to a "pre-merger notification system". Filing thresholds were revised from a single threshold to differentiated thresholds for financial and non-financial enterprises, to be determined and announced as necessary by the Commission. The proposed merger may legally take effect if the Commission does not put forward any objection within 30 days after filing of the merger notification (former Article 11).
   2. Certain categories of mergers that are unlikely to lessen do not lessen market competition were exempted from filing requirements (former Article 11-1).
   3. The competent authority was expressly authorized to impose conditions or undertakings on merger decisions and to specify the legal consequences of non-compliance (former Article 12).
   4. Certain provisions in subordinate regulations that affect rights and interests of the public were elevated into the Act (former Articles 5-1, 7, 8, and 42-1).
   5. Provisions were added governing the review period, types of conditions or undertakings, and revocation of approvals for concerted actions, as well as the scope of authorization for regulations and the rules governing access to files and records by concerned parties in the Multi-level Marketing Supervision Act (former Articles 14, 15, 16, 17, 23-4, and 27-1).
4. Fourth Amendment (2010)
   Article 21 was amended and promulgated on June 9, 2010 by the President. The amendment was proposed by Legislator Zhao Li-yun and others. It had introduced joint and several civil liability for endorsers of false advertising and provided a statutory definition of "endorser."
5. Fifth Amendment (2011)
   Article 35-1 was added, and Articles 21 and 41 were amended and promulgated on November 23, 2011. The addition and amendments were proposed by Legislators Ding Shou-zhong, Zhao Li-yun and Luo Ming-cai. The principal changes included: introduction of the leniency program; limitation of joint and several liability for non-celebrity endorsers; and increases in the maximum administrative fines for certain violations.
6. Sixth Amendment (2015)
   In 2003, the Commission initiated a comprehensive review and amendment of the Fair Trade Act, extensively soliciting opinions from the industrial, governmental, and academic sectors. After deliberations and studies, a draft amendment was formulated and submitted to the Executive Yuan for review in 2012 and subsequently forwarded it to the Legislative Yuan for deliberation. The draft was reviewed together with related proposals introduced by Legislators Huang Zhao-shun, Ding Shou-zhong, Su, Chen-Ching and Pan Meng-an. It was subsequently passed on the third reading by the Legislative Yuan on January 22, 2015, and promulgated by the President on February 4 of the same year. The key aspects of this amendment included: aligning with the Executive Yuan's organizational restructuring, structuring the framework of the Act and updating the provisions governing types of violations, strengthening the enforcement powers of the competent authority, and enhancing the effectiveness of administrative penalties. The main points are as follows:
   1. Revision of the definition of "enterprise" (Article 2).
   2. Renaming the title of the Commission and deletion of provisions concerning local competent authorities (Article 6 and others).
   3. Revision of the criteria for determining monopolistic enterprises (Article 8).
   4. Amendments to merger control provisions (Articles 10-12).
   5. Amendments to concerted action provisions (Articles 14-18).
   6. Explicit prohibition of resale price maintenance, with a proviso and application mutatis mutandis to services (Article 19).
   7. Clarification that enterprises shall not engage in unjustifiable low pricing or other conduct that impedes competition; provisions concerning promotional practices involving improper gifts or prizes were relocated to the unfair competition chapter (Article 20, subparagraph 3, and Article 23).
   8. Revision of provisions against enterprises causing other enterprises to engage in practices that are likely to restrain competition (Article 20, subparagraph 4).
   9. Deletion of former Article 19, subparagraph 5, with relevant matters governed instead by the Trade Secrets Act.
   10. Revision of provisions governing false advertising (Article 21).
   11. Revision of provisions governing counterfeiting (Article 22).
   12. Introduction of a suspension of investigation mechanism (Article 28).
   13. Categorization of penalty provisions (Articles 39, 40, and 42).
   14. Establishment of a five-year statute limitations on power to impose sanction for enforcement actions (Article 41).
   15. Clarification that members of trade associations or other organizations may be subject to joint penalties (Article 43).
   16. Elimination of the administrative appeal (petition) requirement (Article 48).
7. Seventh Amendment (2015)
   Article 47-1 was added and promulgated on June 24, 2015 by the President. This amendment was proposed by Legislators Ding Shou-zhong and Jiang Nai-xin, and etc. The provisions governing the set-up of an antitrust fund, it's sources and uses.
8. Eighth Amendment (2017)
   Article 11 was amended and promulgated on June 14, 2017. This amendment was proposed by Legislators Sufin Siluko and Su, Chen-Ching, and etc. The amendment included two parts: first, conversion of merger review periods from calendar days to business days; second, addressing the provision of information, consultation of opinions, and decision-making procedures in cases of non-consensual (hostile)acquisition s. These measures help enhance the comprehensiveness of merger reviews.