THE SUBSTANTIVE PROHIBITIONS IN YOUR COMPETITION LAWS

General prohibitions

3.

Most competition statutes have general prohibitions against anti-competitive behaviour(eg "Combinations in restraint of trade", "agreements to substantially lessen competition"). Are there any general prohibitions in your competition law? And what are they? A: Yes. Article 10, 14, 19, and 24 of FTL.

Horizontal Agreements

4.	Horizontal agreements are agreements between firms directly in competition with one another.
4A.	Price fixing [agreements between competitors to raise or fix prices] Does your law have special provisions relating to price fixing? Please specify the law and the provision of that law. A: Price Fixing -- Yes. Article 7, 14, and 41 of FTL. the nature of provision -- Unless the practice is under the prior approval of FTC, it is prohibited. (Article 14 provides 7 gateways for the exceptional approval.) The general prohibition to treat the practice without prior approval, please see Article 35 of FTL.
4B.	Bid rigging [agreements on which firm will make the low bid for contracts, and what that bid will be] Does your law have special provisions relating to bid rigging? Please specify the law and the provision of that law. A: Bid rigging -- Yes. Article 7, 14, and 19(1)-4 of FTL the nature of provision -- The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable (For Article 19). For Article 14, please refer to question 4(A) The general prohibition to treat the practice without prior approval, please see Article 35, 36 and 41 of FTL.
4C.	Market sharing [agreements to allocate specific customers or sales territories to particular firms and not to compete over the territory or customers of other firms] Does your law have special provisions relating to market sharing? Please specify the law and the provision of that law. A: Market sharing -- Yes. Article 7 and 14 of FTL. the nature of provision -- Please refer to question 4(A). Please see Article 35 and 41 of FTL for treatment of the practice covered by general prohibition.
4D.	Output limitation [agreements not to supply more than a specified quantity of goods or services] Does your law have special provisions relating to output limitation? Please specify the law and the provision of that law. A: Output limitation -- Yes. Please refer to Article 7 and 14 of FTL. the nature of provision -- Please refer to question 4(A) for other nature of provision. Please see Article 35 and 41 of FTL for treatment of the practice covered by general prohibition.
4E.	Collective boycotts [agreements between competitors not to deal with firms that supply other firms in their market] Does your law have special provisions relating to collective boycotts? Please specify the law and the provision of that law. A: Collective boycotts -- Yes. Please see Article 7 and 14 of FTL. the nature of provision -- Please refer to question 4 (A) for other nature of the provision. Please see Article 35 and 41 of FTL for treatment of the practice covered by general prohibition.
4F.	Trade association activities [agreements between members of a trade association] Does your law have special provisions relating to trade association activities? Please specify the law and the provision of that law. What is the nature of the provision? A: Trade association activities -- Yes. Please see Article 2(1)-3, 7, and 14 of FTL. the nature of provision -- Please refer to question 4(A).
4G.	Other horizontal agreements Does your law have special provisions relating to other horizontal agreements which we have not mentioned above? Please specify the law and the provision of that law. A: Other horizontal agreement -- Yes. Please see Article 7 of FTL. According to Article 14 of FTL, the practice is prohibited, unless it is under the approval of FTC.

Monopolization and Dominant Firm Behaviour

5.	Monopolization and dominant firm provisions are aimed at individual firms with market power. Such firms may be able to use their market power to restrict the competitive process or to charge excessive prices.
5A.	General provisions Does your law have general provisions prohibiting monopolization or dominant firm behaviour? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: General provisions -- Yes. Article 10 of FTL which is the provision governing monopolization. other nature of provision -- A. Please see Article 10 of FTL. B. The practice is prohibited in all cases.
5B.	Excessive prices Are there any provisions prohibiting dominant firms from charging excessive prices? Please specify the law and the provision of that law. What is the nature of the provision? A: Excessive prices -- Yes. Article 10 of FTL. the nature of provision -- A. Please see Article 10 of FTL. B. The practice is prohibited in all cases.
5C.	Presumptions of dominant position Are there any provisions defining a dominant position, or creating a presumption that firms with a particular market share or size are in a dominant position? Please specify the law and the provision of that law. Describe the provision A: Provisions determining dominant position -- Yes. Article 4 of the Enforcement Rules of FTL. Describe the provision -- Please see Article 4 of the Enforcement Rules of FTL.
5D.	Predatory pricing [selling at below cost for the purpose of driving out competitors] Are there any specific provisions relating to predatory pricing? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Predatory pricing -- Yes. Article 10(1)-2 of FTL. the nature of provision -- A. Please see Article 10(1)-2 B. The practice is prohibited in all case.
5E.	Refusals to deal Are there any specific provisions relating to "refusals to deal" by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Refusals to deal -- Yes. Article 10, however, which subparagraph(s) governs the practice is subject to further official interpretation. the nature of provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5F.	Discriminatory behaviour [selling to some customers, particularly associated companies, on different terms to others] Are there any specific provisions relating to discriminatory behaviour by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Discriminatory behavior -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5G.	Exclusive dealing [requiring a retailer or distributor not to sell products competing with the supplier's products] Are there any specific provisions relating to exclusive dealing by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Exclusive dealing -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5H.	Tie-ins [requiring purchasers of one product to purchase other products from the same supplier] Are there any specific provisions relating to tie-ins by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Tie-ins by dominant firms -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5I.	Third line forcing [requiring purchasers of one product to purchase other products from named suppliers] Are there any specific provisions relating to third line forcing by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Third line forcing -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5J.	Territorial restrictions [specifying that the retailer or distributor may not resell outside of a defined territory] Are there any specific provisions relating to territorial restrictions by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Territorial restrictions -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5K.	Customer restrictions [specifying that the retailer or distributor may only deal with specified customers] Are there any specific provisions relating to customer restrictions by dominant firms? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Customer restrictions -- Yes. Article 10, however, which subparagraph(s) govern(s) the practice is subject to further official interpretation. the nature of the provision -- A.Please see Article 10. B. The practice is prohibited in all cases.
5L.	Other specific provisions Are there any other specific provisions relating to monopolization or dominant firm behaviour in your law. Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Other specific provisions -- No.

Vertical Restraints

6.	Vertical restraints are restrictions imposed by supplying firms upon distributors or retailers on matters such as the price at which the good may be sold, what other products the distributor must or must not sell, or the territory in which the good may be sold.
6A.	Resale price maintenance [specification of minimum price at which the product may be resold to customers] Does your law have special provisions relating to resale price maintenance? Please specify the law and the provision of that law. A: Resale price maintenance-minimum prices -- Yes. Article 18 of FTL. the nature of the provisions -- The practice is prohibited in all cases. Please refer to Article 41 of FTL for treatment of the practice covered by general prohibition.
6B.	Maximum resale price maintenance [specification of a maximum price at which the product may be resold to customers] Does your law have special provisions relating to maximum resale price maintenance? Please specify the law and the provision of that law. A: Maximum resale price maintenance -- Yes. Article 18 of FTL. the nature of provision -- The practice is prohibited in all cases. treatment of the practice covered by a general provision -- The practice by itself is void, and FTC has the right to impose the administrative penalty in accordance with Article 41 of FTL.
6C.	Exclusive dealing Does your law have special provisions relating to exclusive dealing? Please specify the law and the provision of that law. A: Exclusive dealing -- Yes. Article 19(1)-6 of FTL. the nature of provision -- The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable. treatment of the practice covered by a general provision -- Please see Article 36 and 41 of FTL.
6D.	Tie-ins Does your law have special provisions relating to tie-ins? Please specify the law and the provision of that law. A: Tie-ins -- Yes. Please see Article 19(1)-6 of FTL. the nature of provision -- The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable. treatment of the practice covered by a general provision -- Please see Article 36 and 41 of FTL.
6E.	Third line forcing Does your law have special provisions relating to third-line forcing? Please specify the law and the provision of that law. A: Third line forcing -- Yes. Article 19(1)-6 of FTL. the nature of provision -- The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable. treatment of the practice covered by a general provision -- Please see Article 36 and 41 of FTL.
6F.	Territorial restrictions Does your law have special provisions relating to territorial restrictions? Please specify the law and the provision of that law. A: Territorial restrictions -- Yes. Article 19(1)-6 of FTL. the nature of provision -- The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable. treatment of the practice covered by a general provision -- Please see Article 36 and 41 of FTL.
6G.	Customer restrictions Does your law have special provisions relating to customer restrictions? Please specify the law and the provision of that law. A: Customer restrictions -- Yes. Article 19(1)-6 of FTL. The practice is subject to review by the competition authorities and may be prohibited by administrative action if unreasonable. treatment of the practice covered by a general provision -- Please see Article 36 and 41 of FTL.
6H.	Other non-price vertical restraints Does your law have special provisions relating to other non-price vertical restraints which we have not mentioned above? Please specify the law and the provision of that law. A: Other non-price vertical restraints -- No.

Price Discrimination

7.

Price discrimination is a practice whereby a firm charges different customers or classes of customers different prices for the same good for reasons unrelated to costs. Does your law have any specific provisions relating to price discrimination? Please specify the law and the provision of that law. What type of behaviour is this provision aimed at and what is the nature of the provision? A: Yes. the type of behaviors is the provision aim at and the nature of the provision -- A. Please see Article 19(1)-2 of FTL. B. The practice is subject to review by the competition authorities and may be prohibited by administrative decree if unjustified and substantially affecting competition.

Mergers and acquisitions

8.	Mergers are the joining together of two or more firms into an existing firm or to create a new firm. Similar effect can often be achieved by the acquisition of business units or business assets from another firm or the creation of a joint venture. Competition laws often treat all three activities under the same provision.
8A.	Does your law include a prohibition for anti-competitive mergers and acquisitions? Please specify the law and the provision of that law. And what is the prohibition? A: Prohibition for anti-competitive mergers and acquisitions -- Yes. Article 6, 11, and 12 of FTL. the prohibitions -- The central competent authority may approve the application referred to in Article 11 of FTL, if the benefit of the combination to the overall economy outweighs the disadvantages of its restraining competition.
8B.	Does your law contain any provisions presuming certain mergers to be anti- competitive(for example if they exceed a given market share)? Please specify the law and the provision of that law. And what are the presumptions? A: Presumption of certain mergers being anti-competitive -- No.
8C.	Does your law require firms involved in mergers or acquisitions to notify competition agencies? Please specify the law and the provision of that law. And when is the notification required? A: Requirement to notify -- Yes. Article 11 of FTL. notification required -- Notification required before the merger takes place.
8D.	And what are the time limits for notification? A: Time limit for notification -- The notification has to be filed with and approved by the Commission before the merger takes place. According to Article 11(2) of FTL, the central competent authority shall make its decision on approval or disapproval within two months after receipt of an application referred to in paragraph one of this Article. Please see Article 11 of FTL.
8E.	If the law requires firms to notify the competition agency or agencies, what criteria are used to identify which mergers must be notified? A: Criteria for notifiable mergers -- Please see Article 11(1)-1 of FTL and Article 6 of the Enforcement Rules of FTL. In addition, according to a public announcement made on April 1, 1992 by the FTC, enterprises intending to merge with others as prescribed under the FTL, and with annual sales amounts exceeding NT$ 2 billion in the previous fiscal year shall apply for merger approval from the FTC. Please see Attachment E.
8F.	If the law does not require firms to notify the competition agency of mergers, does it allow for voluntary notification? Please specify the law and the provision of that law. A: Voluntary notification -- No.

Deceptive or misleading advertising or representations

9.

Does your competition law contain any provisions prohibiting advertising which is deceptive or misleading, or other misleading representations? Please specify the law and the provision of that law. And What is the provision? A: Yes. Article 20, 21, and 24 of FTL. the provisions -- Please see Article 20, 21, and 24 of FTL.

Unfair use of bargaining position(Unconscionable conduct)

10.

Does your competition law contain any provisions prohibiting firms from making unfair use of their bargaining position? Please specify the law and the provision of that law. How do you define "unfair use of their bargaining position"? What firms does the provision apply to ? And Which customer does the provision apply to ? A: No. definition -- There are no provisions in the FTL expressly prohibiting such conducts. However, in some circumstances such conducts might constitute or be part of a scheme to abuse the market standing or obviously unfair acts that are sufficient to affect trading order.

Coercive behaviour

11.	Does your competition law contain any provisions aimed at preventing firms from taking action to intimidate competitors or the customers of competitors? Please specify the law and the provision of that law. A: Yes. Article 19(1)-1, 19(1)-3, and 19(1)-4 of FTL.

Other substantive prohibitions

12.

Does your competition law have provisions for the protection of competition other than those outlined above? Please specify the law and the provision of that law. And what are the provisions? A: Yes. Article 24 of FTL. the provisions -- In addition to what has otherwise been provided for in this Law (FTL), an enterprise shall not conduct deceptive or obviously unfair acts that are sufficient to affect trading order.