The concerted actions subject to regulation by this Law are to prevent competing enterprises from mutually restricting each others business activities. In accordance with Article 2 of this Law, the term enterprise also include trade associations. Therefore, when a trade association sets a uniform price standard for reference only, despite being non-compulsory or merely suggestive, it often becomes an obstacle for other enterprises to adjust their individual pricing structure. Such action is considered as a concerted action.

Relevant article of law: Fair Trade Law, Articles 2, 7

To help trade associations better familiarize themselves with the relevant provisions of this Law, the Commission has studied comparative laws in the United States, Japan, Germany, and Korea, and has held numerous symposia to solicit input from experts and scholars, trade association representatives, and other agencies, and has compiled a list of practices likely to contravene the Law. The practices include the following:

1. Restricting entry by enterprises into particular markets.
2. Restricting competition in particular markets by the following acts where market functioning would be harmed:
1. Placing limitations on kinds, specifications, or models of goods or services, for example:
   (1) Dividing goods manufacturing or service provision among members by kind or specification to cause members to cooperate in setting the specifications of the goods manufactured or services provided.
   (2) By means of denying permission, restricting shipment of new goods or placing time limits on periods during which new goods may be sold.
2. Restricting the expansion of goods production capacity or scale of services: Trade associations may restrict goods production capacity by restricting equipment replacement and expansion or machinery installation by their members. They may also control expansion of goods production capacity and scale of services by restricting advertising, technology transfer, research and development, or operating locations, thereby impeding the functioning of market competition.
3. Restricting goods manufacture, shipment, or sales and restricting provision of services. Such restrictions may be achieved through quantity controls such as quotas, production and sales volume ceilings, inventory ceilings, production time limits, or materials purchasing controls. Quality controls may also be used, for example, controls may be placed on quality levels in goods manufacture and sale or service provision. Trade associations may orchestrate collective decreases in output by their members, or restrict goods deliveries, or establish cooperative associations for unified purchasing.
4. Agreeing on, drawing up, announcing, maintaining, or changing prices charged by members for goods or services.
5. Restricting trading areas or trading counterparts for goods and services.
   (1) Restricting member trading areas or trading counterparts by divvying or agreement.
   (2) Imposing restrictions on members' acceptance of orders or eligibility to participate in bidding.
   (3) Restricting trading counterparts by separating members through a class or grade system not based on concrete or reasonable standards.
6. Jointly setting conditions on sales of goods or services or on trading or payment methods. For example, trade associations that draw up uniform contract clauses or whose members mutually restrain each other in terms of methods of payment accepted, types of service, payment periods, terms and conditions of payment, delivery sites and methods, after-sales service periods, content, and methods may be in violation of the Law.
3. Entering into international agreements or contracts containing improper restraints on trade or unfair means of trade.
4. Causing members to engage in discriminatory treatment or other unfair trading practices.
5. Otherwise restricting business competition in particular markets by improper joint action.

If the self-disciplinary codes signed by trade associations are for the purpose of establishing standards to avoid excessive gifts or prizes, false or misleading advertising, counterfeiting or unfair competitive practices, but may also involve restrictions of competition among members, it is advisable for the associations to seek a prior interpretation by the Commission in order to avoid a possible decision that such a code involves concerted action in violation of this Law.

1. In accordance with the provisions of this Law, when granting special approval to the application of concerted actions, the Commission should take into account the positive contributions to the overall economy and public interest after the concerted action has been taken, as well as the adverse impact on the restriction of market competition. Only when the advantages outweighs the disadvantages, can such concerted actions be approved.
2. The considerations to the overall economy and public interest as mentioned in the preceding paragraph include the following: the degree by which the overall level of industrial technology may be increased after the concerted action has been approved; the amount of change in the prices of goods or services; and the increase in user' convenience, as well as public interests such as safety, sanitation, and environmental protection.
3. The considerations on the impact of the restriction of market competition include the following: obstruction against enterprises that are not part of the concerted action; the effect on market competition or on up-stream and down-stream industries; the risk of relevant enterprises to abuse their market position; and the risk of infringing upon the interests of the consumers and other related enterprises.

Relevant article of law: Fair Trade Law, Article 14

1. Trade associations are composed of homogeneous members among whom there exists a relationship of competition. If trade associations place mutual restrictions on the business activities of members through their charters or resolutions of member meetings or directors' or supervisors' meetings, the result is no different than if individual enterprises were to engage in concerted action. Therefore, although trade associations themselves are not entities obtaining revenues or engaging in economic activity, they have customarily and historically played a leading role in concerted action or as a forum by which enterprises arrive at mutual understandings to engage in concerted actions such as production and sales negotiations, unified pricing, market delineation, or product standardization. To prevent trade associations from leading competing enterprises into concerted actions and to prevent companies, sole proprietorships, and partnerships from using trade associations as a ˇ§loopholeˇ¨ or cover under which to engage in concerted actions, and to avoid resultant restraints on competition and harm to consumer interests, as well as with an eye to correcting the longstanding and unsound customary practice of concerted action by trade associations, the Legislative Yuan specifically defined ˇ§trade associationsˇ¨ as one kind of enterprise in Article 2(1)(iii) of this Law, thereby identifying them as being subject to the provisions of the Law.
2. A concerted action by a trade association can only viewed as a violation where it is actually put into practice by the member enterprises. If a trade association representative sends letters to members asking them to observe mutual restrictions on business activities pursuant to the trade association's charter or a resolution of a board of directors' or supervisors' meetings, then the representative is the person who precipitated the performance of the concerted action. Hence the provision in Article 5 of the Enforcement Rules to the Fair Trade Law, in line with Article 2 of the Law, that a trade association representative may be considered as an actor in a concerted action. This provision is intended to ensure that directors of trade associations pay attention to the restrictions set forth in the Law.
3. Article 35 of the Law adopts the principle that when dealing with enterprises engaging in concerted actions in violation of Article 14 of the Law, administrative measures should be adopted first before turning to judicial measures as the last resort. Cases may only be referred to the judicial authorities for criminal prosecution if the enterprises have first been ordered by the central competent authority under Article 41 to cease or rectify the offending conduct or take necessary corrective action within a certain time limit and have failed to do so or, after ceasing, have committed the same or a similar violation again. In keeping with the principal of legality, the judicial authorities determine the actors in concerted action cases on a case-by-case basis after looking at which persons actually engaged in mutual restraint of business activities.
4. Trade associations are often the mechanism by which members effect unlawful concerted actions. Hence, in corresponding laws in other countries, trade associations are consistently taken as subjects of concerted action provisions. Article 2(1)(iii) of the Law follows the lead of such comparative laws. In practice, it has always been the trade association representative who is referred for prosecution. Article 5(3) of the Enforcement Rules to the Fair Trade Law therefore serves a positive purpose by impelling (reminding) representatives to be alert to and avoid such violations.

Relevant articles of law: Fair Trade Law, Articles 2, 14, 35, 41; Enforcement Rules to the Fair Trade Law, Article 5