The Fair Trade Act (or the Act) of the Republic of China (R.O.C.) was enacted and promulgated on Feb. 4, 1991 and took effect on the same date in the following year. The legislative purpose of the Act was to maintain trading order, protect consumer interests, ensure fair competition, and promote economic stability and prosperity. The Fair Trade Commission (FTC) of the Executive Yuan was established on January 27, 1992 in accordance with the Act. The purpose of creating the FTC is to take charge of the formulation of competition policies and enforcement of the Fair Trade Act. On February 6, 2012, the FTC was reorganized in accordance with the government restructuring plan and the term "Executive Yuan" was dropped from its title in order to emphasize its nature and status as an independent agency.
Thanks to the concerted efforts of all our staff members, as well as the support and encouragement from various communities, since its birth 27 years ago the FTC has laid a solid foundation for establishing fair trade law and system, maintaining market competition mechanisms and trade order, and developing international exchange and collaboration. In the days to come, the FTC will continue to make improvement and innovation in the management of fair trade and multi-level marketing under the guidance of the following administrative principles, hoping to create a free and fair competition environment that will boost the economic stability and prosperity of our country:
I. Improvement of Effectiveness of Law Enforcement and Protection of Market Competition Mechanisms
It is the absolute responsibility of the FTC to enforce the Fair Trade Act in order to ensure free and fair competition of the market, to protect consumer interests, as well as to promote economic stability and prosperity. In addition to investigating cases involving monopolization, mergers and concerted actions that bring serious impacts on market competition, the FTC also keeps a close watch on cases associated with important public interest and takes active measures in accordance with its authority to enforce related regulations so that free and fair competition of the market will be maintained and consumer interests will be well guarded. The regulations set forth in the Fair Trade Act apply to all kinds of professions and businesses. To promote healthy market competitions for different industries in the country, the FTC will act according to the needs of the industries and its law enforcement experiences and put more efforts on supervising and regulating key industries that are closely related to daily commodities and public interest in order to keep regulated businesses well informed, and to create a sound environment for market competition, and the development of a good competition culture.
II.Enhance Inter-departmental Coordination and Collaboration to Jointly Maintain Market Competition Order
There have been many high profile cases in recent years, such as price fluctuations impacting people’s daily lives, and false advertisements of products or services. Such cases often involve regulatory matters overseen by other departments of the Executive Yuan, making it necessary to step up inter-departmental coordination and collaboration. Therefore, the FTC will continue to actively work with related departments to build a consensus regarding law enforcement and establish a mechanism for the division of labor among the departments. The FTC will provide related departments with its assistance so that they can take market competition factors into consideration during their policy formulations and decision makings processes and consequently a market with fair competition will be therefore maintained.
III. Continuous Replenishing Fair Trade Regulations and Effective Investigating Actions that Severely Restrict Competition
The Fair Trade Act was amended eight times since it took effect in 1992. The deliberation on its 6th revision, the largest one with the most profound impact for more than two decades, began as early as in 2003 and was finally completed in 2015 after going through several chairpersons that succeeded the efforts of their predecessors. The major key points of the revision are as follows: the addition of a leniency program for concerted action, the increase of the fine to no more than 10% of an enterprise’s sales revenue, and the addition of a deeming provision for mutual understanding in concerted action. The 7th revision further established an anti-trust fund to provide more comprehensive tools for law enforcement upon concerted actions. To perfect the competition law and develop a freer and fairer competition environment, the FTC will continue to push for amendments to the Fair Trade Act by reviewing the systematic, legal and instrumental aspects to improve the regulations.
IV.Monitoring the Developments of the Digital Economy Industry and Formulating Responsible Measures and Regulations for Market Competition
Many new business models, such as e-commerce, big data applications, and sharing economy, have emerged with the advent of rapid technological developments and economic globalization trends. Economic and legal issues arising from these business models have attracted international attentions, and the FTC will continue to monitor the industrial developments and market changes, so as to formulate responsive measures for potential issues in this area. The FTC will also establish a comprehensive database for economic analysis so that the need of understanding industrial changes will be satisfied.
V. Improving Management of Multi-level Marketing and Put a Stop to Illegal Multi-level Marketing
The Multi-Level Marketing Supervision Act, which is overseen by the FTC, mainly provides regulations on multi-level marketing enterprises and marketing activities. It aims to maintain trading order of multi-level marketing, as well as protect the rights and interests of distributors. With regard to future law enforcement, the FTC will continue to step up inspections of multi-level marketing enterprises to prevent illegal activity, and will also utilize diverse channels, including monitoring online developments, following public opinions, and receiving complaints from individual citizens, to investigate illegal multi-level marketing activities. In addition, the FTC will work closely with the prosecutor’s office to effectively investigate illegal actions so that citizens' rights and interests can be protected.
VI. In-depth Exchanges in International Competition Laws and Participations in Cross-Border Law Enforcements
Under economic globalization and internationalization of markets, cross-border transactions have grown more and more frequent. The investigations of recent international antitrust cases show that cross-border law enforcement will become a key operation of regulatory authorities for competition law of different countries. In order to handle increasingly complicated cross-border merger cases and international cartel cases more effectively, the FTC has made efforts to participate in international events of competition law and to strengthen law enforcement cooperation with the regulatory authorities of other countries. In the future, the FTC will continue to attend various competition law meetings and activities to keep track of and take into account of the latest developments of competition law when it makes decisions on fair trade policies or on law enforcement in individual cases. In addition, the FTC will exchange ideas and cooperate with the regulatory authorities for competition law of the major countries to promote dialogues while at the same time setting up liaison windows to facilitate correspondence over matters related to law enforcement and exchange of information.