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Code of Conduct for Antitrust Compliance of Enterprises

Code of Conduct for Antitrust Compliance of Enterprises

1. Foreword

With the advent of globalization, domestic enterprises find it's increasingly necessary to run transnational operations of businesses. As a result, besides being subject to the regulations in the Fair Trade Act of ROC, such enterprises will also face investigations by the competition law regulatory authorities of other countries when their business conducts have any implications of antitrust violation. To help prevent and avoid violations of antitrust law (or "competition law" in some countries, the "Fair Trade Act" in the ROC; the same hereinafter) and corresponding penalties, the FTC has collected, categorized and analyzed related patterns of behavior and established this Code of Conduct for domestic enterprises to follow so that the violation risk could be reduced while engaging in businesses activities. 

2. General Provisions

  1. Each enterprise is required to establish antitrust compliance program in accordance with its operation scale and corporate culture.
  2. Each enterprise is required to educate its employees with  antitrust compliance training courses. In addition, the personnel of executive positions must also participate and clearly express their support for the antitrust compliance program.  
  3. Each enterprise must be aware of the antitrust law of the country in which  it conducts business and adjusts its antitrust compliance program accordingly. 
  4. An enterprise finding its business conduct in violation of antitrust law must notify the regulatory authority immediately, seek professional legal counseling, and evaluate the condition according to the regulations of the country in concern or apply for leniency at the earliest time to alleviate its liabilities.  
  5. Each enterprise must understand business measures customarily practiced in one  country may not be considered legal in another country.

3. Concerted Action

  1. Before contacting or establishing any agreement with competitors or attending any trade union conferences, enterprises must request the organizer for the agenda and seek assistance from antitrust law specialists to evaluate whether the conduct in question is in any violation of competition regulations.
  2. All personnel approached by competitors expressing the intention to discuss market competition-related issues (such as prices, quantities, capacity utilization rates, trading counterparts, etc.) must refuse and leave the venue immediately and report it to their superiors or the antitrust compliance department.
  3. All personnel must remain highly alert toward letters, emails and text messages between businesses and also keep written records of the time, location and content of all meetings, phone calls and encounters with their competitors and make explicit their standpoint  of not to discuss any sensitive information.
  4. Acquisition of price information of market competitors must come from public information platforms or data compiled by the trade union only.  
  5. All personnel must be careful while they answer questions from industrial analysts or market survey institutions, as replies involving future company pricing decisions may be interpreted as leading to illegal agreement. 
  6. All personnel must avoid discussing business-related issues with friends working for competitors and must refrain from making any business contacts by personal email or telephone. 
  7. All personnel shall never discuss competition-related issues, such as (past, current or future) prices or information likely to affect prices, trading terms, production capacities, inventories, trading counterparts, business strategies, or allocation of market share  through email, telephone, text messaging or during meetings.     
  8. All enterprises shall never provide information by making public announcements, press releases or convening meetings in the name of the trade union, as such behavior could create opportunities for competitors to discuss competition-related issues or adjust price.

4. Resale Price Restriction

  1. Enterprises may provide distributors with advised resale prices through non-compulsory measures and without reward or penalty conditions attached.
  2. Enterprises may not impose any restriction on distributors' resale prices or set any minimum resale prices. 
  3. Enterprises shall never offer discounts, feedbacks or cost sharings to make distributors adhere to fixed resale prices.
  4. Enterprises shall never connect resale prices of their own distributors with those of competitors' distributors.
  5. Enterprises shall never force their distributors to maintain resale prices at certain levels through coercion, enticement or threat to delay or cancel supplies.

5. Monopolization or Abuse of Dominance (applying to enterprises with certain market power the level of which is defined differently in each country)

  1. Pricing may be conducted in reference to those of the alternative products in the proximate geographical area.
  2. Enterprises must never set excessively high prices because of their monopolistic market status.
  3. All enterprises shall never set prices at below-cost levels to drive competitors out of market. In other words, predatory pricing shall never be adopted in any case.
  4. Exclusive distribution may be adopted only with business justification.
  5. If market share of an enterprise is high, it is suggested to limited duration of exclusive distribution agreement (the level of market share is defined differently in different countries.)
  6. Never restrict distributors to operate in specified areas without justifiable reasons. In other words, restricting distributors from operating outside their sales areas is not allowed.
  7. Never refuse transactions without business justification.
  8. Never impose differentiated treatments on trading counterparts without business justification.
  9. Never adopt tie-in sale practices without business justification.. When adopting tie-in sale practices, trading counterparts must be allowed to purchase products separately.  
  10. Never request other businesses to boycott certain enterprises by refusing to supply, purchase or make other type of transactions.
     
Updated at:2017-03-20 16:20:07
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