Fair Trade Law Q&A - Concerted Actions

Under the Fair Trade Act, enterprises are generally prohibited from engaging in concerted actions. However, the prohibition does not apply where the conduct falls within one of the eight categories set forth in Article 15, Paragraph 1, and is beneficial to the overall economy and the public interest, and has been approved by the Fair Trade Commission. The eight categories of concerted actions eligible for exceptional approval are as follows:

1. unifying the specifications or models of goods or services for the purpose of reducing costs, improving quality, or increasing efficiency, generally referred to as "standardization concerted actions";
2. joint research and development on goods, services, or markets for the purpose of upgrading technology, improving quality, reducing costs, or increasing efficiency, generally referred to as referred to as "rationalization concerted actions";
3. each developing a separate and specialized area for the purpose of rationalizing operations, generally referred to as referred to as "specialization concerted actions";
4. entering into agreements concerning solely the competition in foreign markets for the purpose of securing or promoting exports, generally referred to as referred to as "exportation promotion concerted actions";
5. joint acts in regards to the importation of foreign goods, or services for the purpose of strengthening trade, generally referred to as referred to as "import cooperation concerted actions";
6. joint acts limiting the quantity of production and sales, equipment, or prices for the purpose of meeting the demand orderly, because of economic downturn, that the enterprises in the same industry have difficulty to maintain their business or encounter a situation of overproduction, generally referred to as referred to as "economic downturn concerted actions";
7. joint acts for the purpose of improving operational efficiency or strengthening the competitiveness of small and medium enterprises, generally referred to as referred to as "small and medium enterprise efficiency improvement concerted action"; or
8. joint acts required for the purposes of improving industrial development, technological innovation, or operational efficiency.

Relevant Provision: Article 15 of the Fair Trade Act