The Fair Trade 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 this creation of the FTC is to be responsible for 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 the title in order to stress the FTC's status as an independent agency. By dint of the concerted efforts of all our staff members, as well as the support and encouragement from various communities, since its birth the FTC has laid a solid foundation for establishing fair trade law and system, maintaining market competition mechanisms and trading order, and developing international exchange and collaboration in the past 25 years. In the days to come, the FTC will continue to make improvement and innovation in the management of fair trade and multi-level marketing based on the administrative principles below, hoping to create a free and fair competition environment that will boost the economic stability and prosperity of our country:
I. Stepping up Cross-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, mergers between mass media companies, and false advertisements of products or services. Such cases, however, often involve regulatory matters overseen by other departments of the Executive Yuan, making it necessary to step up cross-departmental coordination and collaboration. Hence, the FTC will actively work with related departments to build a consensus regarding law enforcement and establish a mechanism for division of labor among the departments. The FTC provides related departments with its assistance so that they can take market competition factors into consideration when in their policy formulations and decision makings, hoping that a market with fair competition and maintaining market competition order will be therefore jointly created.
II. Continuous Replenishing Fair Trade Regulations and Effective Investigating Actions that Severely Restrict Competition The Fair Trade Act was amended 7 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 in 2003 and was 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 complete tools for law enforcement upon concerted actions. Yet, as concerted actions are becoming more organized, secretive and international, the FTC hopes that more provisions will be added by the Legislative Yuan so that the FTC will gain the appropriate authority for search and seize in its investigations, allowing the FTC to directly obtain key evidences of illegal actions and to further improve its investigation performance. A Word from the Chairperson Fair Trade Commission 5
III. Monitoring the Developments in the Digital Economy Industry and Formulating Responsible Measures and Regulations for Market Competition Many new business models, such as e-commerce, cloud computing, big data applications, Internet of things, and sharing economy, have emerged with the advent of rapid technological developments and economic globalization trends. Economic and legal issues derived 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 complete database for economic analysis to satisfy the need of understanding industrial changes. From another perspective, the competition law issues arising from the developments of the digital industry also requires economic analysis on competition policy. The result of the above analysis will become the basis for the FTC in its formulation of the related regulations while ensuring free and fair competition in the market.
IV. 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, and 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 activities, and will also utilize diverse channels, including monitoring online developments, following public opinions, and receiving complaints from individual citizens, to investigate illegal multilevel marketing activities. In addition, the FTC will work closely with the prosecutor's office to effectively investigate illegal actions and thereby protect citizens' rights and interests.
V. In-depth Exchanges in International Competition Laws and Participations in Cross- Border Law Enforcements The number of cross-border anti-trust cases has significantly increased under the trend of economic globalization. The scope of international affairs associated with competition laws is no longer limited to attending international conferences, and has in fact expanded to bilateral or multilateral exchanges and collaborations in law enforcements, which are now topics of concern to competent authorities of competition laws around the world. In the future, the FTC will continue to maintain close contacts with these competent authorities and increase interactions and collaborations in its law enforcements. The FTC will also actively participate in international conferences held by the OECD, ICN, and APEC, while increasing the depth and width of collaborations, and striving with the competent authorities of other countries to maintain the competition order in the global market.