The Liability of Trade Associations' Concrted Action

Abstracts

1. The first part of the article deals with the liability of trade associations' concerted action. The goal of this part is to discuss and determine the issue of the administrative and criminal liability when trade associations commit concerted action. From the analysis of theories and the practices of the Fair Trade Commission, this paper clarifies the definition and framework of trade associations regulated in the Fair Trade Law, and further discusses whether the Fair Trade Law's regulations on concerted action are applicable to trade associations.

Trade association usually, by resolutions, demand their members to enforce the decisions related with the substance of concerted action. Therefore, there are two stages in dealing with trade associations' concerted action: (1) reaching consensus of concerted action, and (2) enforcing concerted action. At the stage of reaching consensus, the administrative and criminal liability is imposed on trade associations, and the criminal liability regulated by Article 35 of the Fair Trade Law is imposed on the representatives of trade associations. At the stage of enforcing concerted action, the administrative and criminal liability is also imposed on the members of trade associations, but the criminal liability regulated by Article 35 of the Fair Trade Law is imposed on the representatives of trade associations' members.

2. The second part of the article relates to one of the most significant phenomena concerning the regulation of concerted action in Chinese Taipei. This phenomenon can be characterized as a cartel-regulation which “flee into the unfair competition law”. It means, in the past 6 years the practices of the Fair Trade Commission show us quiet clearly that in many cases of concerted action the application of Article 14 of the Fair Trade Law (it contains the prohibition of concerted action) was inappropriately replaced by the application of Article 19(iv) in which any act of an enterprise causing, by coercion, inducement with profit or other improper means, another enterprise to refrain from competing in price or to take part in a concerted action is prohibited.

The reason why the Fair Trade Commission avoid applying Article 14 of the Fair Trade Law to the cartel cases is probably that the violation of this rigid Article makes the offender liable to punishment including imprisonment for 3 years and that concerted actions existed rather commonly in many sectors of the economy.

In order to solve the problems discussed above, we suggest to take the following steps:

1. To clarify the functions and the different roles of Article 14 and Article 19(iv) of the Fair Trade Law within the framework of the regulation of cartels.

2. To interpret Article 14 and Article 19(iv) of the Fair Trade Law appropriately and to try to distinguish one precisely from the other.

3. To solve the relating problem about recommendations and abetments.

4. To strengthen the legal mechanism which is able to enhance a more elastic implementation of the Fair Trade Law.