Fair Trade Law Q&A - Damage to Business Reputation

Article 24 of the Fair Trade Act provides that "No enterprise shall, for the purpose of competition, make or disseminate any false statement that is capable of damaging the business reputation of another.” The elements required to establish a violation of Article 24 are as follows: (1) the enterprise acts for the purpose of competition; (2) it makes or disseminates false statements or information; and (3) its conduct is capable of damaging the business reputation of another enterprise.

With respect to enforcement, the Fair Trade Commission may order an enterprise that violates Article 24 to cease the unlawful conduct, rectify its conduct, or take necessary corrective measures within the time prescribed in the order. The Commission may also impose an administrative fine ranging from NT$50,000 to NT$25 million. If the enterprise fails to comply with the order within the prescribed period, the Commission may continue to issue orders requiring cessation, rectification, or corrective measures and may impose successive administrative fines ranging from NT$100,000 to NT$50 million for each instance of non-compliance until the violation is remedied.

In addition, a violation of Article 24 may give rise to criminal liability pursuant to Article 37 of the Fair Trade Act. Because the offense is prosecutable only upon complaint, a party seeking to pursue criminal liability against an enterprise for an alleged violation of Article 24 may file a criminal complaint directly with the public prosecutorial authorities within the applicable statutory period.

Relevant Provisions: Articles 24, 37, and 42 of the Fair Trade Act