Article 5(3) of this Law provides that “The term ‘relevant market’ as used in the first paragraph means a geographic area or a coverage wherein enterprises compete in respect of particular goods or services.” The term “compete” in this provision refers to acts by which enterprises vie for trading opportunities in the market through relatively favorable conditions of price, quantity, quality, service, and so forth. Viewed from this perspective, the definition of a market should include the entire extent of a geographic area or coverage that is reachable through competition, including the full special and temporal scope of all relevant markets and potential trading areas of all potential suppliers and demanders of the goods and services concerned. Given the rapid transportation facilities and ease of goods distribution in Taiwan, the area as a whole is typically considered a single market in itself. Service industries tend to be more local by their nature and therefore their market scope must be considered in light of actual circumstances. In defining the temporal duration of a market, consideration is given to using annual data rather than quarterly data, to rule out the effects of temporary fluctuations.
In economic theory, determination of relevant markets is often based on an evaluation of the cross elasticity of a particular product, including the elasticities of demand and supply of the product. However, since there is no definite standard of reasonable elasticity, and since elasticity often varies with price fluctuations, seasonal changes, and regional differences, in practice it is necessary to take objective facts into account and to examine industry-specific statistical data and solicit input from experts and scholars in determining the elasticity

Relevant articles of law: Fair Trade Law, Article 5

“Market share” refers to the percentage of the total amount of goods sold or services provided in a particular market accounted for by a certain enterprise. Market share may be determined by calculating an enterprise’s sales volume, monetary sales value, and other similar variables (exports shall be excluded from the calculation) as a percentage of the total sales volume and so forth, of all suppliers in a particular market.
The following factors, at least, must be considered in calculating the market share occupied by a particular enterprise:

1. Scope of the relevant market: determination of closely substitutable goods and services and of the geographic area and the duration of the market.
2. International trade factors: export and import data.
3. Market share measurement variables: in addition to sales volume and monetary sales value, other variables that may be taken into account for supplementary reference in determining market share include production volume, production value, production capacity, number of employees, operating revenue, and capitalization.

1. According to Article 3 of the Enforcement Rules of the Fair Trade Law (hereinafter referred to as the Enforcement Rules), the Fair Trade Commission shall take into account the following when determining whether an enterprise constitutes a monopoly as referred to in Article 5 of this Law:
   1. the market share of the enterprise in a particular market;
   2. the possibility of substitution of the goods or services in a particular market, giving regard to considerations of time and place;
   3. the ability of the enterprise to influence prices in a particular market;
   4. whether formidable difficulties exist restricting other enterprises in entering a particular market;
   5. the import and export status of the goods or services.
2. In addition, taking into account domestic economic development, and to prevent imposing excessive restrictions on new industries that have minimal influence on market competition or on the business operations of small and medium-sized enterprises, as well as considering the current domestic industrial structure, Article 5-1 of the Fair Trade Law sets further minimum requirements, stipulating that an enterprise may not be considered as a monopoly in the absence of any of the following circumstances:
   1. the market share of an enterprise reaches one-half (1/2) of a particular market;
   2. the combined market share of two enterprises reaches two-thirds (2/3) of a particular market;
   3. the combined market share of three enterprises reaches three-fourths (3/4) of a particular market.
   Even where one of the above circumstances exists, if the market share of an individual enterprise does not reach one-tenth (1/10) of the particular market or if its total sales in the preceding fiscal year are less than one billion New Taiwan Dollars, such an enterprise shall not be considered as a monopoly.
3. Furthermore, the Commission may still determine an enterprise, which under the preceding two paragraphs should not be included, to be a monopoly if the establishment of such enterprise, or the entry into the particular goods or service market by such enterprise is restricted by laws and regulations, technology, or other conditions that would affect market supply and demand and might impede competition.
   Relevant article of law: Fair Trade Law, Article 5-1; Enforcement Rules to the Fair Trade Law, Article 3

Although relevant law provides patentees with rights such as the exclusive right of manufacture, the Fair Trade Law does not presume patentees have monopolistic market power. Whether an enterprise engaging in the manufacture of patented products will be considered as involving in monopolistic practice shall be determined by the following two considerations:

1. The market scope of the patented products: In the event that there are no substitute products for the patented products and the patented products are able to satisfy the requirements of specific users, the product itself constitutes a singular product market. On the other hand, if there are substitute products that are similar to the patented goods, and the substitute products are also able to satisfy users’ requirements, then the patented products are deemed to belong to a larger market.
   Duration and geographic area should also be considered when determining the scope of the market.
   After the scope of the market is determined, the Commission will take into account the market share of the product, the ability of the enterprise to influence the price of the market, the degree of difficulty encountered by other enterprises when trying to enter the particular market, and the export and import status of the goods or services, to strictly determine whether an enterprise is a monopoly.
2. Article 45 of the Fair Trade Law provides that ¡§no provisions of this Law shall apply to any proper conduct in connection with the exercise of rights pursuant to the provisions of the Copyright Law, Trademark Law, or Patent Law¡§.”Consequently, even if an enterprise is monopolistic in its nature, it is free from relevant restrictions in the Fair Trade Law as long as its business conduct comports with the provisions of the Patent Law. However, even if an enterprise not monopolistic in its nature is still governed by the relevant provisions of the Fair Trade Law with respect to any acts beyond the scope of authority of the Patent Law. The exclusion clause in Article 45 of the Fair Trade Law furthermore does not apply to any improper exercise of the patent rights, even where within the scope of the Patent Law.
   
   Relevant article of law: Fair Trade Law, Article 5, 5-1, 45; Enforcement Rules to the Fair Trade Law, Article 3

Whether an agent is a ¡§monopolistic enterprise¡¨ under the Law is determined on a case-by-case basis after considering the criteria and exclusions set forth in Articles 5 and 5-1 of the Fair Trade Law and Article 3 of the Enforcement Rules to the Fair Trade Law. If an agent that is a monopolistic enterprise, in order to compete with its (independent) distributors in a given market, takes measures such as improperly setting prices or reducing the supply of parts in a certain geographic area without justifiable reasons, so as to exclude competition by such distributors or to threaten their survival and drive them out of the market, such actions are analogous to price squeezing or supply squeezing and shall be governed by the provisions of Article 10(1) of this law prohibiting monopolistic enterprises from ¡§directly or indirectly preventing any other enterprises from competing by unfair means.¡¨
In determining whether the above provisions have been violated in a particular case, however, it is necessary to weigh factors such as the monopolistic enterprise's intent in taking the measures, its capital structure, and the actual anti-competitive effect on its competitors. As to the judgement on whether an enterprise has violated Article 19 of this Law by adopting such actions, it is necessary to make a formal and substantive examination on a case-by-case basis to determine whether the actions constitute ¡§discriminatory treatment¡¨ under Article 19(ii) or ¡§causing the trading counterpart(s) of its competitors to do business with itself by coercion, inducement with interest, or other improper means¡¨ under Article 19(iii).

Relevant articles of law: Fair Trade Law, Articles 5, 5-1, 10, 19; Enforcement Rules of the Fair Trade Law , Article 3