The Taiwan Fair Trade Commission (TFTC) continued to maximise its available resources and optimise its legal tools to enforce the Fair Trade Act (FTA) in 2017. As of 30 November 2017, the TFTC had opened investigations into 2,066 cases, which included 313
self-initiated cases and 1,753 reported cases. Among the reported cases, there were 1,480 complaints, five applications for concerted actions, 41 merger notifications and 227 requests for explanations.
Replenishing fair trade regulations
The FTA has been amended eight times since it took effect in 1992. The sixth amendment enacted on 4 February 2015 was considered to be the widest in scope, the largest in terms of scale and the most influential in terms of legal reforms. Following the sweeping reforms in 2015, the TFTC has continued to review related regulations in response to the changes in industrial structure and the competition landscape, as well as the needs of case handling in practice.
To make merger reviews more discreet and comprehensive, the amendment to article 11 of the FTA on 14 June 2017 revised the merger review period from 30 calendar days to 30 working days. The TFTC may extend the period to up to 60 working days as it deems necessary. In addition, the TFTC may ask for external opinions in regard to mergers filed. If one of the enterprises in the merger does not agree to the merger, the TFTC shall provide it with the reason for the merger and ask for its opinion. This amendment allows the TFTC to have more time to review complicated and high-profile merger cases and also provides the target company with an opportunity in hostile takeovers to defend itself and make a statement.
Apart from the above amendment to the FTA, in 2017 the TFTC stipulated and amended six guidelines, including some significant amendments related to merger control, telecommunications enterprises, cross-ownership in digital convergence-related industries, testimonial and endorsement advertising, and the application of article 25 of the FTA.
Action against anticompetitive practices
In 2017, the TFTC continued to actively investigate and punish several violations of the FTA – such as Qualcomm for its abuse of dominance in the baseband chip market; three TV channel agents for failing to rectify their illegal conduct that offered different transaction terms when licensing broadcasting rights to incumbents and newcomers; six cable TV operators for preventing competitors from engaging in competition by inducement with low prices, or other improper means; 10 franchisers for not fully disclosing to trading counterparts important franchise information during franchisee recruitment; and a large pharmaceutical company for implementing resale price maintenance. Among the cases in 2017, the TFTC imposed an administrative fine on Qualcomm of NT$23.4 billion, which is the largest fine since the TFTC’s establishment.
In addition, the purpose of the FTA enforcement is not punishment, but rather to promote knowledge and awareness of and compliance with the law. In this regard, one of the priorities of antitrust enforcement is to promote fair trade principles and a compliance programme to ensure that businesses are aware of and abide by the law. In 2017, the TFTC held 81 advocacy events mainly aimed at cable TV operators, TV channel agents, export-oriented manufacturers, textbook publishers, liquefied petroleum gas enterprises and trade associations. The TFTC also uploaded a mobile app to the App Store and Google Play on 27 December 2017 to increase the channels for the public to refer to the fair trade regulations and report illegal actions at any time and in any place.
Monitoring the development of the digital economy
In response to the developments of new business models in the era of digital economy, the TFTC set up the Task Force on the Digital Economy and Competition Policy in 2017. The Task Force seeks to collect related reports issued by international organisations and competition authorities in other countries, as well as monitor industry developments and market changes, so as to adopt responsive measures for potential competition issues in this area. The TFTC also organised several symposia to consult external opinions and provided internal staff training to keep pace with the developments. At the end of 2017, the TFTC compiled a report based on the results of studies by the Task Force that focused on the sharing economy, e-commerce and big data. The report will serve as valuable reference to the TFTC as it investigates and analyses related cases.
In-depth international interaction and collaboration
The TFTC has worked hard to promote various aspects of international relations. In 2017, the TFTC continued to participate in international conferences hosted by the Organisation for Economic Co-operation and Development (OECD), International Competition Network (ICN) and Asia-Pacific Economic Cooperation (APEC), as well as regional forums and workshops organised by the Japan Fair Trade Commission (JFTC), Korea Fair Trade Commission (KFTC) and Commission for the Supervision of Business Competition (KPPU). In view of the increasing number of cross-border antitrust cases under the trend of economic globalisation, the TFTC has maintained close partnerships with the competition authorities in other countries to cooperate in combating international anticompetitive practices and reviewing cross-border mergers effectively. In addition to holding discussions with the competition authorities in other countries involved in the Qualcomm case, the TFTC also assisted the Australian Competition and Consumer Commission in its investigation into Taiwan-based companies in 2017.
Going ahead in 2018
To promote fair competition among domestic industries, the TFTC selects key industries that are closely intertwined with Taiwan’s economic development and its people’s daily lives to reinforce the supervision and administration. In 2018, the TFTC will pay more attention to the cable TV market structure, the business practices of franchisers, the natural gas market and internet advertising. The TFTC will also further enrich its industry research databases for economic analysis to satisfy the need to more deeply understand the industrial changes taking place.
Elsewhere, the TFTC will continue to refine the legal tools of the FTA. As concerted actions are becoming more organised, secretive and international, the TFTC has made great efforts to persuade the Executive Yuan and the Legislative Yuan to add provisions for granting the authority to search and seize, thereby allowing the TFTC to directly obtain key evidence of illegal actions. The TFTC hopes that this will further improve its performance in investigating serious violations.