2. Article 23 of the Fair Trade Act states that, “No enterprise shall compete for trading opportunities by means of improper offerings of gifts or prizes.’ What are the definition and range of applications with regard to the scope of gifts or prizes, amount of improper offering?

A2:

1. The gifts and prizes are defined as follows:
   1. Gifts: Attached and free-of-charge products or services of market value provided by businesses to compete for trading opportunities.
   2. Prizes: monetary prizes or other products or services of market value given by businesses through raffles or other aleatory approaches to compete for trading opportunities.
2. Range of application of gifts and prizes

There are too many types of gifts and prizes offered by businesses to compete for trading opportunities; hence, a negative list is provided to rule out those not belonging to gifts and prizes, including:

1. Free tasting, free trials and other promotional practices not intended to create trading opportunities--promotional giveaways that do not have much influence on market order and interests of competitors.
2. Price discounts for the same types of products or services--when businesses offer low prices to compete, it is basically not contradictory to the spirit of performance competition.
3. Special offers of quantities of the same types of products or services--when quantities are increased without price raises, it is considered to be lowering of prices by businesses.
4. Promotional special offers of packages including different products or services--these are lowering of prices by businesses. Besides packages of different products and services as special offers, this type of promotional practice also includes the collection of additional charges for consumers to obtain two or more products of services at special prices.

3. The value of gifts given away by business promoting sale of a product or service is limited as follows:
   1. For products or services priced over NT $ 100, the maximum value of the gift shall be 1/2 of the selling price of the product.
   2. For products or services priced less than NT $ 100, the maximum value of the gift shall be NT $ 50.
4. The total annual amount of prizes given at prize-giving activities held by a business is limited as follows:
   1. For a business whose annual sales for the previous fiscal year exceeded NT$3 billion, the maximum shall be NT$600 million.
   2. For business whose annual sales for the previous fiscal year exceeded NT$750 million but was less than NT$3 billion, the maximum shall be 1/5 of such sales amount.
   3. For business whose annual sales for the previous fiscal year was less than NT$750 million, the maximum shall be NT$150 million.
5. When a business conducts a prize-giving activity, the value of the highest prize shall not exceed NT$ 5 million.
6. The prices of products or services, value of gifts and total amount of prizes in this Guidelines are determined according to the following standards:
   1. Prices of products or services: The reasonable market prices that are given to trading counterparts at the time a business promotes sales with gift-giving activity.
   2. Value of gifts: The value may be determined in order according to the following standards:
      1. Directly from the business that promotes sales with gift-giving activity.
      2. In the case that the gifts is produced by the business itself or acquired by the business from the market at reasonable price, the value for the said gifts is determined by its costs of production or acquisition.
      3. In the case that the business has acquired the gifts based on the trading terms other than price, or the aforementioned cost of acquisition is not available, then the value of gifts is determined by its retail price.
      4. Other reasonable and approved standards.
   3. Total amount of prizes: The value may be determined in order according to the following standards:
      1. Directly from the business that promotes sales with prize-giving activity.
      2. In the case that the prizes (either product or service) are produced by the business itself or acquired by the business from the market at reasonable price, the total amount for the said prize (either product or service) is determined by its costs of production or acquisition.
      3. In the case that the business has acquired the prizes (either product or service) based on the trading terms other than price, or the aforementioned cost of acquisition for the prizes (either product or service) is not available, then the value of prizes is determined by the retail price of the said prizes (either product or service).
      4. Other reasonable and approved standards.

Relevant article(s) of law: Fair Trade Act, Article 23