An Overview of the Leniency Policy
The Fair Trade Commission's (FTC) competition law and policy was the subject of a peer review by the Organisation for Economic Co-operation and Development (OECD) and competition agencies from more than 70 countries at the OECD's Global Forum on Competition on 9 February 2006. The peer review report recommended that the FTC should implement a leniency policy to assist to combat illegal concerted actions.
Due to increasing difficulties associated with gathering evidence of concerted actions, empirical enforcement experiences of foreign competition agencies showed that a leniency policy can serve as an effective tool to help prevent and detect concerted actions. Therefore, amendments to the Fair Trade Act (hereinafter referred to as the "FTA") passed on 23 November 2011 contained a new provision, Article 35 (leniency clause) with the aim of the effective deterrence and detection of illegal concerted actions.
Following the amendments in 2011, in order to increase transparency and clarity of implementation of the leniency policy, the FTC was empowered to issue "Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases" under Paragraph 2, Article 35 of the FTA. The Leniency Regulations are the main guidance on the leniency policy in Taiwan, including, but not limited to the following aspects:
- Requirements for a leniency application;
- A leniency applicant's eligibility and the number of eligible applicants (immunity from and reduction of fines can be granted to up to five applicants) as well as exclusions (an enterprise can not apply for leniency when it has coerced other enterprises to participate in the alleged concerted action or has restricted others from exiting the concerted action);
- The timing, procedure and method of a leniency application (the application can be filed in writing or orally, submitted with required evidence before or after the FTC's investigation);
- Obligations of a leniency applicants (confidentiality obligations and assistance with the FTC's investigation)
- Full immunity or reduction of fines may be granted (it may vary from 10% reduction of fines to full immunity).