1. What are the standards for the determination of a "monopoly" adopted by the Fair Trade Commission?
According to Article 3 of the Enforcement Rules of Fair Trade Act (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 7 of this Act:
- The market share of the enterprise in a relevant market;
- The possibility of substitution of the goods or services amidst changes in a relevant market, giving regard to considerations of time and place;
- The ability of the enterprise to influence prices in a relevant market;
- Whether formidable difficulties exist to entry to a relevant market by other enterprises;
- Import and export status of the goods or services.
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 8 of the Fair Trade Act sets further minimum requirements, stipulating that an enterprise may not be considered as a monopoly in the absence of any of the following circumstances:
- the market share of the enterprise in the relevant market reaches one half(1/2) of the market
- the combined market share of two enterprises in the relevant market reaches two thirds(2/3) of the market and
- the combined market share of three enterprises in the relevant market reaches three fourths (3/4) of the market.
Even where one of the above circumstances exists, where the market share of any individual enterprise does not reach one tenth (1/10) of the relevant market or where its total sales in the preceding fiscal year are less than the threshold amount ( NT$ 2 billions ) as publicly announced by the competent authority, such enterprise shall not be deemed as a monopolistic enterprise.
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 relevant goods or service market by such enterprise is subject to legal or technological restraints, or there exists any other circumstance under which the supply and demand of the market are affected and the ability of others to compete is impeded.
Relevant article(s) of law: Fair Trade Act, Article 8; Enforcement Rules to the Fair Trade Act, Article 3