Q1: What the competent authority is in charge of the leniency policy? What law and regulations is the leniency policy subject to?
1. The Fair Trade Commission (hereinafter referred to as the "FTC") is the competent authority responsible for implementation of the "leniency policy".
2. The main legislation concerning the leniency policy include:
(1) Article 35 (leniency clause) of the Fair Trade Act (hereinafter referred to as the "FTA").
(2) "Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases" (hereinafter referred to as the "Leniency Regulations").
Q2: What is the nature of the leniency policy? Can it be applied to any violations of competition law other than concerted actions?
1. The sanction regime of concerted actions under the FTA suggests that "an administrative penalty is imposed at first, but a subsequent criminal prosecution may apply in certain circumstances". The leniency policy in Taiwan is subject to an administrative legal regime and only immunity from or reduction of administrative penalties is available.
2. The leniency policy is only applied to horizontal concerted actions.
Q3: Can the leader in a concerted action apply for leniency? Are there any conditions on a leniency applicant?
1. Yes. The leader in a concerted action can apply for leniency.
2. The leniency policy is not applied to any enterprise who has coerced other enterprises to participate in the alleged concerted action or has restricted others from exiting the concerted action (Paragraph 1, Article 2 of the Leniency Regulations).
Q4: What requirements does a leniency application have to meet? When a leniency application is filed, what extent of information and evidence is the applicant required to provide?
1. The requirements for a leniency application vary depending on whether the application is filed before the FTC is aware of the alleged concerted action in which the applicant has participated, or is filed during the investigation period of a concerted action case. The requirements for an application are as follows:
(1) An enterprise files a complaint in writing or informs the FTC of the concrete content of the concerted action in which it has partaken and submits evidence and assists the investigation before the FTC is aware of the alleged illegal conduct or initiated an investigation in accordance with the FTA (Subparagraph 1, Paragraph 1, Article 35 of the FTA, and Subparagraph 1, Paragraph 1, Article 3 of the Leniency Regulations); or
(2) An enterprise reveals the concrete illegal conduct as well as submits evidence and assists the investigation during the period in which the FTC is investigating the alleged illegal conduct in accordance with the FTA (Subparagraph 2, Paragraph 1, Article 35 of the FTA, and Subparagraph 2, Paragraph 1, Article 3 of the Leniency Regulations).
2. In the above circumstances, the extent of information and evidence, which the applicants are required to provide are as follows:
(1) In the first circumstance, the applicant's complaint, or the concrete content of the violation and evidence submitted by the applicant must be able to assist the FTC in initiating an investigation (Subparagraph 1, Paragraph 1, Article 3 of the Leniency Regulations). The concrete content of the violation and the evidence refers to concrete details of the concerted action, in which the applicant has been involved, along with related evidence, which the FTC is not aware of or does not possess. The evidence should provide the FTC with an outline of the concerted action in question as well as the time and location where the mutual understanding has been established and the content of the mutual understanding or other related matters to initiate an investigation. (Paragraph 2, Article 4 of the Leniency Regulations).
(2) In the second circumstance, the concrete content of the violation and evidence submitted by the applicant must be able to assist the FTC in establishing a violation of Paragraph 1, Article 15 of the FTA. (Subparagraph 2, Paragraph 1, Article 3 of the Leniency Regulations). For an application for full immunity from fines, the applicant shall provide evidence, which the applicant has obtained and is capable of proving the violation of the concerted action in question. Regarding an application for reduction of fines, the applicant shall provide evidence, which is able to assist the FTC in its investigation of the concerted action in question, or enhance the probative value of evidence the FTC has obtained. (Paragraph 1 and Paragraph 2, Article 5 of the Leniency Regulations).
Q5: What requirements should a leniency applicant meet to be granted immunity from or reduction of fines?
1. Requirements of an application for full immunity from fines (Article 7 of the Leniency Regulations):
(1) The applicant must be the first enterprise to apply for leniency. However, the applicant, who files an application during an investigation period, may qualify for full immunity if there is no other enterprise meeting the immunity requirements.
(2) A conditional approval is granted under Article 6 of the Leniency Regulations.
(3) The applicant needs to fulfill all obligations listed on the above conditional approval.
2. Requirements of an application for reduction of fines (Article 8 of the Leniency Regulations):
(1) Applications made during an investigation period, or a change request for reduction of fines when an application for full immunity is rejected.
(2) A conditional approval is granted under Article 6 of the Leniency Regulations.
(3) The applicant needs to fulfill all obligations listed in the above conditional approval.
3. In addition to the above conditions, any application for immunity from or reduction of fines is prohibited from falling into any of the following circumstances (negative conditions):
(1) Any enterprise applying for leniency cannot destroy, forge, alter or conceal any evidence in relation to the concerted action in question (Subparagraph 1, Paragraph 2, Article 2 of the Leniency Regulations).
(2) Any enterprise cannot directly or indirectly disclose its intention to apply for leniency or any content of the application which it intends to provide to the FTC (Subparagraph 2, Paragraph 2, Article 2 of the Leniency Regulations).
Q6: What is the content of a conditional approval? Is it a final decision?
1. The content of a conditional approval includes the following matters (Article 6 of the Leniency Regulations):
(1) The applicant shall withdraw from the concerted action in question immediately upon filing the application or at a time specified by the FTC.
(2) The applicant shall follow the FTC's instructions and provide honest, full and continuous assistance during the investigation (obligations to assist the FTC with its investigation).
(3) Other matters specified by the FTC.
2. The conditional approval is not a final decision, but an interim decision in the investigation process. By obtaining it the applicant can be aware of his/her priority status in terms of immunity from, or reduction of fines. The final decision on immunity from or reduction of fines will not be made until the applicant fulfills all obligations, which are listed in the conditional approval, and where the conditional approval has not been revoked throughout the investigation (Article 16 of the Leniency Regulations).
Q7: What are an applicant's obligations to assist the FTC in its investigation?
1. The obligation to provide the FTC at the earliest time with all the information and evidence regarding the concerted action in question (including those that are currently in the applicant's possession or will be obtained by the applicant in the future).
2. The obligation to provide prompt description or cooperate during the investigation.
3. The obligation to be interviewed by the FTC (including the applicant's staff members or representatives).
4. The obligation of truthfulness in statements without any falsehood, destruction, forgery, alternation or concealment.
5. The obligation of confidentiality: no disclosure is allowed without the FTC's consent.
Q8: Is there a marker system applicable? How can an enterprise apply to preserve its priority status? Why does the maker applicant lose the preserved priority status?
1. Yes, there is a marker system used in the current leniency policy in Taiwan (Article 11 of the Leniency Regulations). The marker system is only applied to an initial application for full immunity. It is not available for subsequent applicants.
2. When an applicant does not have sufficient information to file a formal application for full immunity, the applicant can file a marker application to the FTC to preserve the priority status in a written or oral statement containing the following information:
(1) the name of the enterprise, the uniform invoice number, the paid-in capital, the annual revenue, the name of the representative or person in charge, the company address, and the date of company registration;
(2) the product or service involved, the form of the concerted action, the geographic areas affected, and the duration of the action;
(3) the names, company addresses, and representatives or persons in charge of the other involved enterprises;
3. If the marker applicant does not provide information and evidence meeting the requirements within a period specified by the FTC, the marker applicant will lose the preserved priority status.
Q9: How many applicants can be granted immunity from or reduction of fines under the Leniency Regulations?
1. Only the first applicant can be granted full immunity from fines.
2. The second and the subsequent applicants (up to four successful applicants) can be granted reduction of fines. The fine reductions range between: 30%~50% reduction for the first applicant for reduction of fines; 20%~30% reduction for the second applicant; 10%~20% reduction for the third applicant, and up to 10% reduction for the forth applicant.
Q10: When leniency is granted to an enterprise, what is its impact on the inpidual in this enterprise?
The board directors, representatives, or managers of an involved enterprise or others with the authority to represent the enterprise, who are jointly penalized with the enterprise under Paragraphs 1 and 2 of Article 15 or Article 16 of the Administrative Penalty Act, may be granted immunity from, or reduction of fines when meeting the following requirements(Article 9 of the Leniency Regulations):
1. The involved enterprise meets requirements for immunity from or reduction of fines;
2. The said inpiduals provide honest and full statements with regard to the unlawful conduct;
3. The said inpiduals have followed the FTC's instructions and provided honest, full and continuous assistance during the investigation until the case is concluded.
Q11: What is the format of an application required by the Leniency Regulations? Is it necessary to file a leniency application in writing? What is the format when filling a written application?
When applying to preserve the priority status, or applying for immunity from or reduction of fines, an enterprise can file its application either in writing or orally, and can commission an agent to apply on its behalf. A written application should be compliant with the format established by the FTC (more information is available on the leniency application form). It should be submitted by registered mail or in person. In terms of an oral application, an applicant's representative must appear at the FTC's office to make a statement. The FTC will record the statement and the applicant shall sign a record as confirmation (Article 10 of the Leniency Regulations).
Q12：Is the identity of a leniency applicant kept confidential?
Unless otherwise agreed by the parties, or stipulated by law, the identity of a leniency applicant is kept confidential. Confidentiality is maintained during an administrative litigation process (Article 20 of the Leniency Regulations)
Q13: How does a foreign enterprise apply for leniency?
Any foreign enterprise filing a leniency application should prepare relevant documents in accordance with the Leniency Regulations. Its application must be written in Chinese. If any documents attached to its application are written in a language other than Chinese, the FTC will request for Chinese translations.