2. What changes have been made in the amendments to the Fair Trade Act conducted over the years?

A2:

1.The first amendment

The “Draft Partial Amendment to the Fair Trade Act” was passed by the Legislative Yuan on its third reading on Jan. 15, 1999 and was promulgated by the president on Feb. 3 of the same year to take effect on Feb. 5. A total of 20 articles were added/ amended and the key revisions are as follows:

(1).The regulations regarding the announcement of monopolistic businesses and businesses accounting for one fifth of the relevant market shares (Paragraph 2 of Article 10 and Paragraph 2 of Article 11 of the original version) were deleted.

(2).Administrative fines could be imposed for illegal practices whereas the maximum fines were raised and minimum fines were specified (Articles 40 and 41).

(3).The principle of “application of administrative measures before judicial measures” was adopted for illegal practices and the fines were increased (Articles 35, 36 and 37).

(4).The regulation of multi-level marketing was tightened and illegal practices were to be given appropriate sanctions (Articles 23, 23-1, 23-2, 23-3, 23-4 and 42).

(5).The status of the Fair Trade Act as a basic economic law was confirmed, with competition policy and industrial policy both being taken into account (Article 46).

(6).Exemption of daily commodities from the regulation against restrictions on resale prices was deleted (proviso in Paragraph 1 and Paragraph 2 of Article 18).

2.The second amendment

The amendment to Article 9 was promulgated on Apr. 26, 2000. The regulation with regard to the competent authority at the provincial level in Article 9 was deleted to accommodate the Provisional Statute for the Reorganization of Taiwan Provincial Government and the Local Government Act.

3.The third amendment

In line with the Administrative Procedure Act to be implemented on Jan. 1, 2001, the Fair Trade Commission drew up the “Draft Partial Amendment to the Fair Trade Act” and presented it to the Executive Yuan for approval before forwarding it to be reviewed by the Legislative Yuan. On Aug. 2, 2001, the Executive Yuan completed the review and turned it over to the Legislative Yuan. However, seeing that domestic businesses were facing competition pressure resulting from economic globalization in the 21st century and corporate acquisitions were becoming a tendency in order to cope with the competitive edge of multinational corporations and the biological structure in the domestic economic environment, the Fair Trade Commission therefore came up with the “Second Draft Partial Amendment to the Fair Trade Act” in 2001 as a response to the industrial structure adjustment as well as the demand in the domestic economic environment at the time by taking into consideration the protection of market competition mechanisms, the conclusion achieved in the Industrial Group meeting of the Economic Development Advisory Committee was that the procedure for the review of corporate acquisition applications had to be simplified, obstacles had to be removed and proper incentives had to be given, as well as stipulations in the competition laws of other countries regarding merger regulation examined. On Aug. 31, 2001, the second draft amendment was presented to the Executive Yuan, which gave its approval and forwarded the draft on Oct. 17 in the same year to be reviewed by the Legislative Yuan. After reviewing both drafts, the Legislative Yuan passed the amendment on its third reading on Jan. 15, 2002 and the president promulgated it on Feb. 6 in the same year to take effect on Feb. 8. Fifteen articles were added/amended and the key revisions are as follows:

(1).Control of business mergers was changed from “filing applications for approval” to “filing merger notifications for permission unless there is any objection.” In addition, the regulation on the announcement of the singular business sales threshold for merger filing was revised to become that where the Fair Trade Commission could separately announce the thresholds for financial institutions and non-financial businesses depending on the situation. In addition, if the Fair Trade Commission did not put forward any objection within 30 days after a merger notification was filed, the merger could be conducted (Article 11).

(2).It was stipulated that business mergers unlikely to weaken market competition did not have to be filed with the Fair Trade Commission (Article 11-1).

(3).It was added that the central competent authority could attach conditions to its approvals for business mergers and the consequences of failures to comply with the conditions were also specified (Article 12).

(4).A number of regulations concerning interests of the public in secondary laws were included in the Fair Trade Act (Articles 501, 7, 8 and 42-1).

(5).Regulations regarding the processing duration, types of conditions to be attached and repeal of the Fair Trade Commission’s approval for concerted actions under exceptional circumstances were added. At the same time, the range of authorization, the principle for allowing concerned parties to access related information or files and the legal basis of such authorization were also specified in the Multi-level Marketing Supervision Act (Articles 14, 15, 16, 17, 23-4 and 27-1).

4.The fourth amendment

The amendment to Article 21 was promulgated by the president on Jun. 9, 2010. The amendment was proposed by Legislator Zhao Li-yun and others. It was added that endorsers for false advertisements would be jointly and severally liable for compensation and the definition of advertisement endorsers was also specified.

5.The fifth amendment

The addition of Article 35-1 and amendments to Articles 21 and 41 were promulgated by the president on Nov. 23, 2011. The addition and amendments were proposed by Legislators Ding Shou-zhong, Zhao Li-yun and Luo Ming-cai. The main contents included the provisions on leniency policy, limitation of the joint and several liability of non-celebrity advertisement endorsers and increase of maximum fines for certain illegal practices.

6.The sixth amendment

In 2003, the Fair Trade Commission conducted a complete review and revision of the Fair Trade Act. Opinions from the industrial, government and academic sectors were solicited. After repeated inspections and discussions, the Fair Trade Commission worked out a draft amendment and presented it to the Executive Yuan in 2012. It was approved and turned over to be reviewed by the Legislative Yuan. The proposals put forth by Legislator Huang Zhao-shun, Ding Shou-zhong, Su, Chen-Ching and Pan Meng-an were consolidated and the Legislative Yuan eventually passed the draft amendment on its third reading on Jan. 22, 2015 and the full text of the amended provisions was promulgated by the president on Feb. 4 in the same year. The changes were made to accommodate the organizational restructuring of the Executive Yuan. The articles were rearranged, the descriptions of different types of illegal conduct were revised, the power of the competent authority was reinforced and the effects of administrative sanctions were increased. The key contents of the amendment included:

(1).Revision of the definition of “enterprise” (Article 2)

(2).Revision of the title of the Fair Trade Commission and deletion of regulations regarding local competent authorities (Article 6 and others)

(3).Revision of the criteria for recognition of monopolistic businesses (Article 8)

(4).Revision of the merger regulations (Articles 10 to 12)

(5).Revision of the concerted action regulations (Articles 14 to 18)

(6).Addition of the regulation against restrictions on resale prices and the corresponding proviso that the regulation was also applicable mutatis mutandis to services (Article 19)

(7).Revision of the regulations against unjustifiable price undercutting and other practices carried out to impede competition; marketing promotions by giving inappropriate gifts and prizes redefined as unfair competition (Subparagraph 3 of Article 20 and Article 23)

(8).Revision of the provisions against businesses making other businesses engage in market competition restriction practices (Subparagraph 4 of Article 20)

(9).Deletion of Subparagraph 5 of Article 19; related matters to be subject to the Trade Secrets Act

(10).Revision of the provisions against false advertising (Article 21)

(11).Revision of the provisions against counterfeiting (Article 22)

(12).Addition of provisions regarding suspension of investigations (Article 28)

(13).Categorization of penalties (Articles 39, 40 and 42)

(14).Addition of the regulation that the duration for the competent authority to exercise its power to impose sanctions was five years (Article 41)  

(15).Addition of provisions to specify that members of trade associations and other organizations could also be punishable (Article 43)

(16).Removal of the appeal procedure regulation (Article 48)

7.The seventh amendment

The amendment to Article 47-1 was promulgated by the president on Jun. 24, 2015. It was made according to the proposal put forward by Legislators Ding Shou-zhong and Jiang Nai-xin. The provisions regarding the establishment of the Antitrust Fund and the sources and usages of the Fund were added.

8.The eighth amendment

The amended Article 11 was promulgated on June 14th, 2017 by the Presidential Decree. The proposal was put forth by Legislator Sufin Siluko and Su, Chen-Ching. The amendment included two parts: First, revision of the duration of business merger review from calendar days to workdays; Second, enhancement of the thoroughness of merger review procedures with unsolicited bids, the FTC is required to ask the party to be acquired its opinion and make the decision.