A draft bill to further modernize Taiwan's primary competition law statute, the Fair Trade Act ("FTA"), last amended in 2011, has been sent to the Legislature for consideration. The proposed amendments in the draft bill seek to modify qualification standards, reporting thresholds and exemptions, the FTC review period, and search and seizure powers, to strengthen investigations of anticompetitive conduct.
The proposed amendments in the draft bill primarily aim to:
- authorize the Fair Trade Commission to adjust the monopolistic enterprises qualification standards;
- modify the thresholds and create exemptions for combination (mergers) from reporting;
- amend exemption clauses and extend the effective period of FTC's approval for concerted actions; and
- provide FTC with search and seizure powers to strengthen investigations of anti-competitive conduct.
As of the end of 2013 the draft bill had yet to pass the first
reading at the Legislature.
Enforcement in the concerted action area has significantly intensified in the recent years. In the first half of 2013, the FTC imposed a record breaking fine of NT$6.32 billion against nine independent power producers for cartel activity. This set a new record following the fines in late 2011 of NT$20 million against the big four convenient chain stores' concerted action over prices of brewed coffee, and NT$30 million against the three largest milk suppliers' cartel activities in raising milk prices.
In Q4 2013, after administrative appeal, the penalties imposed on the power producers were slightly lowered to NT$6.05 billion. In addition to the dispute over existence of cartel activities, one of the disputes is also over whether the new penalty regime (which removes the old cap of NT$25 million and provides for penalty of up to 10% of annual revenues) was correctly imposed on the producers. Further administrative appeal is expected and to be monitored in 2014.
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