Taiwan: New antitrust rules

This month Taiwan has announced that they have implemented stricter antitrust regulations. Despite the additions the TFTC has not been granted ‘dawn raid powers’ which would have enabled it to investigate suspected anti-competitive conduct by launching surprise inspections of business premises.

Here are the new additions at a glance:

• Doubling of the maximum fine for anti-competitive conduct (up to NTD 50 million/approximately US$ 1.58 million) and a further fine of up to NTD100 million (approximately US$ 3.17 million) for failing to comply with the order made by the Taiwan Fair Trade Commission (TFTC) to end the infringement.

• A legal presumption that, in certain circumstances, parallel market conduct by competitors is the result of coordination. This would shift the burden of proof to companies who would then need to rebut the presumption by showing that they had not colluded and had in fact acted independently (albeit in parallel). This presumption will be applied from February 6, 2015.

  Under the principle of non-retroactivity, if the conduct in question had ended prior to this date, then the presumption will not be applied (even if the TFTC’s decision comes after this date).

• More severe penalty for the providing false data in merger filings. Under the new rules, if a merger filing contains false information, then the merger could be prohibited; or the parties could be ordered to dispose of shares, to transfer part of the operations, or remove certain persons from positions. The TFTC could also impose a fine of up to NTD1 million (approximately US$31,700) on the companies that supplied the information.
• Extended ‘Statute of Limitation’: the period during which the antitrust agency must bring an action has been extended from three to five years. This applies to investigations of anticompetitive conduct and unauthorized mergers, as well as to enforcement against the supply of false information in the merger control context.
• A softening of the TFTC’s approach to resale price maintenance. Technically, these types of restrictions remain prohibited by the law but the TFTC will now undertake a “rule of reason” type analysis. This could well resemble the approach adopted at a federal level in the US where, instead of being automatically illegal, it is possible to argue that such restrictions are legal because they generate certain countervailing benefits for consumers. It will be interesting to see how this develops in Taiwan. As in the US, RPM arrangements will need to be considered very carefully in advance.
• New power to suspend an investigation: the TFTC can suspend an investigation if the investigated company promises to take specific measures to discontinue and remedy the investigated conduct (under supervision and during a period specified by the TFTC). If the investigated company fulfills its promise, the TFTC may even terminate the investigation and close the case.

Full Content: Global Compliance News

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.