Criteria for Applying the Fair Trade Act to Private Law Acts by the Executive Government Entities

Prescribed by the 182nd Commissioners' Meeting of April 6, 1995

The legislative purpose of the Fair Trade Act is to maintain trading orders and to ensure fair competition. Private economic acts by enterprises that violate this purpose will be sanctioned by the Fair Trade Act. The public law acts taken by the executive branch of government while exercising its authorities are, by definition, not acts under private law, and are therefore not governed by the Fair Trade Act. However, it is open to question whether the Fair Trade Act is applicable to the private law economic acts exercised by the executive government entities.

Therefore, a special task force was formed by this Commission in 1993 to research the applicability of Fair Trade Act to private law acts conducted by the executive government entities. After many symposiums where opinions from experts and scholars were solicited, the matter was decided upon on April 14, 1993, during the 80th Meeting of the Commissioners, and was reported to the Executive Yuan for approval. On October 14, 1993, the Executive Yuan approved the decision as its official reference after discussion with the entities concerned.

According to conclusions from the above-mentioned meetings, the following two factors shall be considered in deciding whether or not the Fair Trade Act is applicable to private law acts conducted by the executive government entities:

1. The demand behaviors/acts in response to the provision, by the executive government entities, of products or services that have market value shall be governed by the Fair Trade Act, whether or not the behaviors/acts arise prior to the provision of such products or services. The demand behaviors/acts in response to the provision, by the executive government entities, of products or services that charge fees shall be governed by the Fair Trade Act, whether or not the behaviors/acts arise prior to the provision of such products or services.

2. The above paragraph shall also apply to the events where private or other non-government entities are commissioned by [the executive government entities].

Annex

Study of Whether Private Law Acts by Government Entities Should Be Subject to Broader Application [of the Fair Trade Act]

Resolution of the 182nd Commissioners' Meeting:
1. The "Criteria for Applying the Fair Trade Act to Private Law Acts by the Executive Government Entities" provided in the Commission's Interpretation Ref. Kung Yen Shih No. 090 remain unchanged.

2. The criteria of "charge of fees" is limited the "user's fees" and does not include "administrative fees" such as fees for handling/material costs. Fees subject to applicability are not defined by itemized listing but rather determined based on the principle of general inclusion of all fees involving a relationship of compensation/consideration.

3. Schools, with the exception of elementary and junior high schools in the compulsory public education system, are considered "enterprises" under the Fair Trade Act.