Cartel law and enforcement regime –

The governing law for competition enforcement activity in Taiwan is the Taiwan Fair Trade Act (“TFTA”). The TFTA was enacted in February 1991 and has been amended several times, most recently in 2011. The stated purpose of the law is “maintaining trading order, protecting consumers’ interests, ensuring fair competition, and promoting economic stability and prosperity”.

Article 14 is the key provision of the TFTA regarding cartel activity, and states that no enterprise shall engage in “concerted action” unless that action is beneficial to the economy as a whole and has been approved by the Taiwan Fair Trade Commission (“TFTC”). Article 7 of the TFTA defines “concerted action” as “the conduct of any enterprise, by means of contract, agreement or any other form of mutual understanding, with any other competing enterprise, to jointly determine the price of goods or services, or to limit the terms of quantity, technology, products, facilities, trading counterparts, or trading territory with respect to such goods and services, etc., and thereby to restrict each other’s business activities”. The TFTA expressly includes in this definition “a meeting of minds whether legally binding or not which would in effect lead to joint actions”. However, the TFTA excludes vertical agreements and limits the definition of “concerted action” to “horizontal concerted action at the same production and/or marketing stage which would affect the market function of production, trade in goods, or supply and demand of services”.

Originally published by Global Legal Group Ltd – February 2015.