Article 1

These Enforcement Rules are adopted pursuant to Article 48 of the Fair Trade Act (hereinafter referred to as the "Law").

Article 2

The term "concerted action" as mentioned in Article 7 of the Law refers to an act among enterprises at the same level of production or distribution that is sufficient to influence production or the function of supply and demand in a market for goods or services.

The term "other forms of mutual understanding" as mentioned in Article 7 of the Law refers to the communications other than a contract or agreement, which, regardless of their legal enforceability, will actually result in parallel actions.

Article 3

In determining whether an enterprise constitutes a monopolistic enterprise as prescribed in Paragraph 2, Article 10 of the Law, the central competent authority shall consider the following factors:

1. market share enjoyed by the enterprise in a particular market;
2. possibility of substitution of the goods or services in the market, giving regard to time and geographical considerations;
3. ability of the enterprise to influence prices in the particular market;
4. difficulty for other enterprises to enter into the particular market; and
5. import and export conditions of the goods or services.

Article 4

Any enterprise not satisfying the following requirements will not be considered a monopolistic enterprise according to the preceding article:

1. a single enterprise holding a market share of one-half (1/2) or more;
2. two (2) enterprises together enjoying a market share of two-thirds (2/3) or more; and
3. three (3) enterprises together enjoying a market share of three-fourths (3/4) or more.

Although and enterprise(s) meets all of the requirements mentioned above, such an enterprise(s) shall not be considered a monopolistic enterprise if each of the enterprises individually enjoys a market share which is less than one tenth (1/10) or if each such enterprise''s total sales in the preceding fiscal year was less than on (1) billion New Taiwan dollars.

The central competent authority may still determine an enterprise which, under the preceding two paragraphs should not be included, to be a monopolistic enterprise if the establishment of such enterprise of the entry into the particular goods or service market by such enterprise is restricted by laws and regulations, technology or other conditions that may impede competition.

Article 5

When calculating the market share of an enterprise, information concerning the productions, sales, inventory, import and export value (volume) of each enterprise and the relevant market shall be taken into account.

Information necessary for the calculation of the market share may be based on such information as obtained upon investigation by the central competent authority or that recorded in other government agencies.

Article 6

The sales amount as mentioned in Subparagraph 3, Paragraph 1, Article 11 of the Law refers to the total sales amount of an enterprise.

The "total sales amount" as used in the preceding paragraph shall be based on the information obtained upon investigation by the central competent authority or that recorded in other government agencies.

Article 7

Application for an approval of a combination of enterprises according to Paragraph 1, Article 11 of the Law shall be filed:

1. by all enterprises participating in the combination, where an enterprise is merging with, acquiring or leasing the business or properties of, or frequently operating with other enterprises;
2. by the holding or acquiring enterprise, where an enterprise holds or acquires shares or the capital contribution of another enterprise; or
3. by the controlling enterprise, where an enterprise controls the business operation or personnel employment and termination of another enterprise.

Article 8

Enterprises applying for an approval of a combination according to Paragraph 1, Article 11 of the Law shall submit the following documents to the central competent authority:

1. application form stating the following information:
   1. type and substance of the combination;
   2. name, location, residence or domicile of each participating enterprise, companies, firms and organizations;
   3. target date of combination;
   4. name of the attorney and power of attorney, if any; and
   5. other required information;
2. basic information describing each participating enterprise, including:
   1. name and address of the representative or administrator of each participating enterprise, if any;
   2. capital amount and business items of each participating enterprise;
   3. revenues in the preceding fiscal year of each participating enterprise and any enterprise having a controlling or subordinate relationship with it; and
   4. number of employees of each participating enterprise;
3. financial statement and business report for the preceding fiscal year of each participating enterprise;
4. information such as production or operation cost, sale price, value or amount of production and sales of related goods or services of each participating enterprise;
5. explanation of benefits to the overall economy that the combination will bring; and
6. other documents or information required by the central competent authority. The form application mentioned in the preceding paragraph shall be stipulated by the central competent authority.

Article 9

If the information submitted by enterprises applying for approval of combination is incomplete or inaccurate, the central competent authority may state reasons therefor and require supplement or correction of such information within a prescribed time limit and may dismiss the application in case the required supplement or correction is not made in time.

The supplement or correction mentioned in the preceding paragraph may be submitted only once for each application.

The two-month time limit prescribed in Paragraph 3, Article 11 of the Law shall commence from the date of receipt of the application by the central competent authority, or from the date of receipt of the supplement or correction, if any information is incorrect or incomplete and supplement or correction of such information is required by the central competent authority.

Article 10

If it deems necessary, the central competent authority may publish its approval or disapproval of applications for a combination of enterprises in the government gazette.

Article 11

Applications for an approval of concerted actions pursuant to the proviso of Article 14 of the Law shall be made jointly by the enterprises participating in the concerted actions or through their association or agent with a power of attorney.

Article 12

The following documents shall be submitted by the participating enterprises for an approval of a concerted action in accordance with the proviso of Article 14 of the Law:

1. application form stating the following information:
   1. goods or services to which the concerted action is applicable;
   2. type of concerted action;
   3. proposed implementation period and geographical area of the concerted action; and
   4. other required information;
2. a copy of draft contracts, agreements, or other documents relative to the concerted actions;
3. concrete substance of and implementation methods for the proposed concerted action;
4. basic information of the enterprises participating in the concerted action, including:
   1. name, location, residence or domicile of each participating enterprise, companies, firms, trade associations or organizations;
   2. name and address of the representative or administrator, if and; and year of each participating enterprise;
   3. business items, capital amount, and the revenues in the preceding fiscal year of each participating enterprise;
5. prices, and production/sales volume/amount of the goods or service of the two (2) most recent years of each participating enterprise stated by season;
6. financial statement and business report for the preceding fiscal year of each participating enterprise;
7. impact evaluation report of the concerted action; and
8. other documents or information required by the central competent authority. The application form mentioned in the preceding paragraph shall be stipulated by the central competent authority.

Article 13

The impact evaluation report of the concerted action as referred to in paragraph 7 of the preceding article shall state:

1. analytical data concerning cost structure and cost changes before and after the implementation of the concerted action;
2. effects of the implementation of such concerted action on enterprises not participating in the concerted action;
3. effects on structure, supply and demand, and price of the relevant market by the implementation of the concerted action;
4. effects on the upstream and downstream enterprises and their respective market after the implementation of the concerted action;
5. concrete efficiency and disadvantages to the overall economy and public interest created by the implementation of the concerted action; and
6. other required information.

Article 14

Enterprises applying for an approval pursuant to Subparagraph 1 or 3, Article 14 of the Law shall provide in the impact evaluation report concrete expected effects in cost reduction, quality improvement, efficiency gains or promotion of reasonable operation to be attained by the implementation of the concerted actions.

Article 15

Enterprises applying for an approval pursuant to Subparagraph 2, Article 14 of the Law shall provide the following information in the impact evaluation report:

1. comparison between funds required in the research and development programs by the individual enterprises versus those required in a joint research and development program; and
2. concrete expected effects in technology upgrading, cost reduction, quality improvement or efficiency gains to be attained by the implemen- tation of the concerted action.

Article 16

Enterprises applying for an approval pursuant to Subparagraph 4, Article 14 of the Law shall provide the following information in the impact evaluation report:

1. quantities and values of concerned goods exported by each participating enterprise in the most recent year and the percentage of such quantities and values to the total export quantities and values as well as the ratio between export and domestic sales of the concerned commodities; and
2. concrete expected effects in ensuring or promoting exports as a result of the implementation of the concerted action.

Article 17

Enterprises applying for an approval pursuant to Subparagraph 5, Article 14 of the Law shall provide the following information in the impact evaluation report:

1. quantities and values of the concerned goods imported by each participating enterprise in the three (3) most recent years;
2. comparison between costs required for import by the individual enterprises versus those required for joint import; and
3. concrete expected effects in strengthening trading capability resulting from the implementation of the concerted action.

Article 18

Enterprises applying for an approval pursuant to Subparagraph 6, Article 14 of the Law shall provide the following information in the impact evaluation report:

1. comparative information of average production costs and prices of the specific goods that the concerted action is applicable to;
2. data relating to the yearly capacity, equipment utilization rate, production/sales quantities (values), export/import quantities (values), inventory in respect of the concerned goods of each participating enterprise in the three (3) most recent years, as well as a monthly breakdown of such information in the most recent year; and
3. change of number of operators in the trade during the three (3) most recent years;
4. prospect of the market for the particular industry; and
5. self-help measures taken by participating enterprises in overcoming economic recession.

Article 19

Enterprises applying for an approval pursuant to Subparagraph 7, Article 14 of the Law shall provide the following information in the impact evaluation report:

1. documents showing eligibility to be considered as small and medium-sized enterprises; and
2. concrete expected effects to enhance operation efficiency or competitiveness as a result of the concerted action.

Article 20

If the information submitted by enterprises applying for the approval of a concerted action is incomplete or inaccurate, the central competent authority may state reasons therefor and request the said enterprise to supplement or correct all of the information within a prescribed time limit or may otherwise dismiss the application if the required supplement or correction is not made in time.

The supplement or correction in the preceding paragraph may be submitted only once for each application.

Article 21

The small and medium-sized enterprises mentioned in Subparagraph 7, Article 14 of the Law shall be determined in accordance with the Statute for Development of Small and Medium-sized Enterprises.

Article 22

Any enterprise applying for an extension pursuant to Paragraph 2, Article 15 of the Law shall submit the following documents:

1. form application;
2. copy of the original approval;
3. reasons for such extension; and
4. other documents or information required by the central competent authority.

When the application for extension is approved, the central competent authority shall state in its approval the reference number of the original approval and the effective period for registration and public announcement.

Article 23

The following factors shall be taken into consideration when determining whether there is due cause as referred to in Subparagraph 2, Article 19 of the Law:

1. supply/demand situation of the relevant market;
2. difference in costs;
3. amount of the respective sales;
4. credit risks; and
5. other reasonable or justifiable causes.

Article 24

The "restrictions" as used in Subparagraph 6, Article 19 of the Law refer to tie-in, exclusive dealing, territory, customer or utilization restrictions, and other restrictions restraining trading counterparts'' business operations.

In order to determine whether the restrictions mentioned in the preceding paragraph are reasonable, the totality of such factors as intent, aim, market power of the parties, structure of the relevant market, nature of the goods and the effect on competition in market resulting from implementation of such restrictions shall be considered.

Article 25

In case of any violation by an enterprise of Paragraph 1 or 3, Article 21 of the Law, the central competent authority may order the enterprise to publish advertisements showing the correction notice in accordance with Article 41 of the Law.

Weighing the level of effect of the original advertisements, the central competent authority shall decide the methods, frequency and period of the advertisements mentioned in the preceding paragraph.

Article 26

To make the notification prescribed in Subparagraph 1, Paragraph 1, Article 27 of the Law, a written notice shall be used. The above written notice shall contain the following information:

1. name, location, residence or domicile of the notified party, and the name and location of the responsible person if the notified party is a company, firm, trade association or organization;
2. subject of the matter;
3. date, time and place of required presence; and
4. punishment for failure to make presence without proper reasons.

Except in cases of urgency, service of a written notice shall be make at least forty-eight (48) hours prior to the date of required presence.

Article 27

The notified party referred to in the preceding Article may designate an agent to make statements. If it is deemed necessary, however, the central competent authority may order him to appear in person.

Article 28

After the notified party has appeared and made his statements pursuant to Article 26, the central government authority shall have the statements transcribed and order him to sign on the transcripts thereof; provided that if he cannot sign, the statements may be affixed with a seal or be fingerprinted by the notified party after the reason therefore has been recorded. If the notified party refuses to sign, affix a seal or fingerprint the transcript, such facts shall be stated in the transcript.

Article 29

Notification by the central government authority pursuant to Subparagraph 2, Paragraph 1, Article 27 of the Law shall be make in writing and contain the following information:

1. name, location, residence or domicile of the notified party, and the name and location of the responsible person if the notified party is a company, firm, trade association or organization;
2. subject of the matter;
3. account books, documents and other necessary information or evidence to be submitted;
4. time limit for the submission; and
5. punishment for failure to submit without proper reasons.

Article 30

The central competent authority, upon receipt of account books, documents and other necessary information or evidence submitted by relevant agencies, organizations, enterprises or individuals, shall issue a receipt therefor.

Article 31

In seeking approval for exemption of acts from being subject to the Law according to Paragraph 2, Article 46 of the Law, the governmental enterprise, public utility or communication and transportation enterprise shall submit, in writing, to the authority with jurisdiction over the business of respective enterprises at the central government level, for reviewing and transferring to Chinese Taipei, the substance of such acts, the article(s) of the Law to be exempted and rationale therefor with relevant information and documents.

When transferring the application made pursuant to the preceding paragraph, the authority with jurisdiction over the business of respective enterprises at the central government level shall provide its preliminary opinion thereto.

If the application made in accordance with Paragraph 1 above is approved by Chinese Taipei, the authority with jurisdiction over the business of respective enterprises at the central government shall notify the central competent authority under the Law with a copy of notification to the applicant enterprise.

Article 32

These Rules shall come into force on the date of promulgation.