1. Foreword

With the advent of globalization, domestic enterprises find it's increasingly necessary to run transnational operations of businesses. As a result, besides being subject to the regulations in the Fair Trade Act of ROC, such enterprises will also face investigations by the competition law regulatory authorities of other countries when their business conducts have any implications of antitrust violation. To help prevent and avoid violations of antitrust law (or "competition law" in some countries, the "Fair Trade Act" in the ROC; the same hereinafter) and corresponding penalties, the FTC has collected, categorized and analyzed related patterns of behavior and established this Code of Conduct for domestic enterprises to follow so that the violation risk could be reduced while engaging in businesses activities.

2. General Provisions

1. Each enterprise is required to establish antitrust compliance program in accordance with its operation scale and corporate culture.
2. Each enterprise is required to educate its employees with  antitrust compliance training courses. In addition, the personnel of executive positions must also participate and clearly express their support for the antitrust compliance program.
3. Each enterprise must be aware of the antitrust law of the country in which  it conducts business and adjusts its antitrust compliance program accordingly.
4. An enterprise finding its business conduct in violation of antitrust law must notify the regulatory authority immediately, seek professional legal counseling, and evaluate the condition according to the regulations of the country in concern or apply for leniency at the earliest time to alleviate its liabilities.
5. Each enterprise must understand business measures customarily practiced in one  country may not be considered legal in another country.

3. Concerted Action

1. Before contacting or establishing any agreement with competitors or attending any trade union conferences, enterprises must request the organizer for the agenda and seek assistance from antitrust law specialists to evaluate whether the conduct in question is in any violation of competition regulations.
2. All personnel approached by competitors expressing the intention to discuss market competition-related issues (such as prices, quantities, capacity utilization rates, trading counterparts, etc.) must refuse and leave the venue immediately and report it to their superiors or the antitrust compliance department.
3. All personnel must remain highly alert toward letters, emails and text messages between businesses and also keep written records of the time, location and content of all meetings, phone calls and encounters with their competitors and make explicit their standpoint  of not to discuss any sensitive information.
4. Acquisition of price information of market competitors must come from public information platforms or data compiled by the trade union only.
5. All personnel must be careful while they answer questions from industrial analysts or market survey institutions, as replies involving future company pricing decisions may be interpreted as leading to illegal agreement.
6. All personnel must avoid discussing business-related issues with friends working for competitors and must refrain from making any business contacts by personal email or telephone.
7. All personnel shall never discuss competition-related issues, such as (past, current or future) prices or information likely to affect prices, trading terms, production capacities, inventories, trading counterparts, business strategies, or allocation of market share  through email, telephone, text messaging or during meetings.
8. All enterprises shall never provide information by making public announcements, press releases or convening meetings in the name of the trade union, as such behavior could create opportunities for competitors to discuss competition-related issues or adjust price.

4. Resale Price Restriction

1. Enterprises may provide distributors with advised resale prices through non-compulsory measures and without reward or penalty conditions attached.
2. Enterprises may not impose any restriction on distributors' resale prices or set any minimum resale prices.
3. Enterprises shall never offer discounts, feedbacks or cost sharings to make distributors adhere to fixed resale prices.
4. Enterprises shall never connect resale prices of their own distributors with those of competitors' distributors.
5. Enterprises shall never force their distributors to maintain resale prices at certain levels through coercion, enticement or threat to delay or cancel supplies.

5. Monopolization or Abuse of Dominance (applying to enterprises with certain market power the level of which is defined differently in each country)

1. Pricing may be conducted in reference to those of the alternative products in the proximate geographical area.
2. Enterprises must never set excessively high prices because of their monopolistic market status.
3. All enterprises shall never set prices at below-cost levels to drive competitors out of market. In other words, predatory pricing shall never be adopted in any case.
4. Exclusive distribution may be adopted only with business justification.
5. If market share of an enterprise is high, it is suggested to limited duration of exclusive distribution agreement (the level of market share is defined differently in different countries.)
6. Never restrict distributors to operate in specified areas without justifiable reasons. In other words, restricting distributors from operating outside their sales areas is not allowed.
7. Never refuse transactions without business justification.
8. Never impose differentiated treatments on trading counterparts without business justification.
9. Never adopt tie-in sale practices without business justification.. When adopting tie-in sale practices, trading counterparts must be allowed to purchase products separately.
10. Never request other businesses to boycott certain enterprises by refusing to supply, purchase or make other type of transactions.

Updated at：2017-03-20 16:20:07

Fair Trade Commissions Guidance for Enterprises drafting of Antitrust Compliance Programmes 

APEC Competition Policy & Law Database

Application form for immunity from or reduction of fines in an illegal concerted action case

Application form for preservation of the priority status for fine immunity in an illegal concerted action case

Full Text composed of 11 Articles hereof were promulgated
by Order Kung Fa Tzu No. 10415608631 on October 7, 2015
Part of the provisions hereof were amended by Order Kung Fa Tzu No.
1051560602191 on April 19, 2016
Full Text composed of 11 Articles hereof were amended by
Order Kung Fa Tzu No. 1101560525 on November 26, 2021

Article 1

These regulations herein ("the Regulations") are enacted in accordance with Paragraph 4 of Article 47-1 of the Fair Trade Act (hereinafter referred to as "the Act").

Article 2

Any informer providing the competent authority with evidence of an illegal concerted action, not known yet by the competent authority, shall be given a reporting reward in accordance with the Regulations once the competent authority has confirmed the enterprise’s violating the Paragraph 1 of the Article 15 of the Act after investigation by the competent authority.

Article 3

Informers referred in the preceding article include natural persons, juristic persons, or unincorporated associations with representatives or administrators. Informers may report to the competent authority by written or verbal statements, emails, or other means stating clearly the following items: 1.informers'names, contact information, and addresses; 2.content of the reported illegal concerted actions and specific descriptions of violating conducts, relevant data, or clues qualified for investigation etc. which fulfill the criteria set forth in Paragraph 1 of Article 5. Where a report is made verbally, the competent authority shall produce a written record for the reporting.

Article 4

The Regulations shall not apply to any informer under any one of the following circumstances:

1. The informer reports anonymously or conceals the real name, contact information, or address;
2. The informer is the enterprise involved in the concerted action;
3. The informer is the enterprise granted immunity or reduction of the fine in accordance with “Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases”, or the director, representative, or other authorized person of such enterprise;
4. The informer coerces other enterprises into participating in or restricts their withdrawal from the concerted action;
5. The informer belongs to the staff of the competent authority, or is their spouse or relative within the third degree of kinship; or
6. The informer is the agency that acquires evidence of the illegal concerted action due to exercise of its authority, the staff thereof, or their spouse or relative within the third degree of kinship.

Article 5

After an imposition of a fine on an illegal concerted action, the competent authority’s criteria for granting any reporting reward based on the value of evidence provided by the informer are as follows:

1. In case that the informer provides evidence and data helpful to initiation of the investigation proceeding, the reporting reward will be 5% of the sum of the fine with a minimum of one hundred thousand (100,000) New Taiwan Dollars and a maximum of one million (1,000,000) New Taiwan Dollars;
2. In case that the informer provides evidence and data indirectly proving the agreement of the concerted action, the reporting reward will be 10% of the sum of the fine with a minimum of one hundred thousand (100,000) New Taiwan Dollars and a maximum of ten million (10,000,000) New Taiwan Dollars; and
3. In case that the informer provides evidence and data directly proving the agreement of the concerted action without any need for further investigation, the reporting reward will be 20% of the sum of the fine with a minimum of one hundred thousand (100,000) New Taiwan Dollars and a maximum of twenty million (20,000,000) New Taiwan Dollars.

In the event that the sum of the fine on an illegal concerted action amounts to 200 million New Taiwan Dollars or more but less than 500 million New Taiwan Dollars, the maximum of the reward referred in the preceding paragraph shall be doubled; and if the sum of the fine on an illegal concerted action amounts to 500 million New Taiwan Dollars or more, the maximum of the reward referred in the preceding paragraph shall be five times the original maximum.

If evidence provided by an informer for the same case meets the conditions set forth in two or more subparagraphs of Paragraph 1 simultaneously, the reporting reward shall be decided according to the subparagraph prescribing a greater amount of the reward. An informer is entitled to receive a reward only once for one case.

The reporting reward shall be distributed evenly among several informers if evidence described in Paragraph 1 is under any one of the following circumstances:

1. Several informers jointly provide evidence described in same subparagraph or separately provide identical evidence at the same time without discernible sequence; or
2. Several informers provide evidence described in the same subparagraph and unknown to the competent authority.

Article 6

In the event that no fine is imposed on the reported illegal concerted action, the competent authority may, at its discretion, grant each informant a reporting reward not less than fifty thousand (50,000) New Taiwan Dollars but not more than one million (1,000,000) New Taiwan Dollars based on the value of evidence provided by each informer.

Article 7

After imposing an administrative disposition for an illegal concerted action, the competent authority shall grant the reporting reward within thirty (30) days in accordance with the following methods:

1. For each informer, the portion of the reward below one million (1,000,000) New Taiwan Dollars shall be paid in a lump sum.
2. For each informer, a quarter of the portion of the reward exceeding one million (1,000,000) New Taiwan Dollars shall be paid in the first installment.

As for the reward descried in Subparagraph 2 of Paragraph 1, the remainder thereof shall be paid after the disposition of the administrative fine is affirmed and becomes final. If a part of the disposition is revoked, or the competent authority remakes the administrative disposition to impose a lesser fine, the remainder of the reward shall be recalculated according to the revised amount of the fine. No additional reward will be paid in the event of no balance after the recalculation.

A right to claim a reward for reporting is extinguished by prescription if it is not exercised within ten years.

Article 8

Except as otherwise provided in Article 9 of the Regulations, the payment of a reporting reward shall not be revoked.

Article 9

The competent authority shall grant no reporting reward or revoke the payment thereof in case there is any one of the following events for an informer:

1. There is any circumstance specified in Article 4;
2. The informer directly or indirectly discloses any reported facts or content before the competent authority imposes any administrative disposition;
3. The informer uses counterfeited or altered evidence, which the informer has been convicted in a final and binding judgment.

Article 10

The identity of an informer and other relevant information shall be kept confidential.

Any conversation records or original documents containing an informer's real identity information shall be kept in a separate sealed file. Other documents sufficient to reveal an informer's identity shall be kept in the same way.

Except otherwise provided in laws, the conversation records and documents stated in the preceding paragraph shall not be provided for review or to any agencies, groups, or individuals other than the criminal investigation authorities or the judicial organs.

Article 11

The Regulations shall enter into force on the day of promulgation.

An Overview of the Leniency Policy

The Fair Trade Commission's  (FTC) competition law and policy was the subject of a peer review by the Organisation for Economic Co-operation and Development (OECD) and competition agencies from more than 70 countries at the OECD's Global Forum on Competition on 9 February 2006. The peer review report recommended that the FTC should implement a leniency policy to assist to combat illegal concerted actions.

Due to increasing difficulties associated with gathering evidence of concerted actions, empirical enforcement experiences of foreign competition agencies showed that a leniency policy can serve as an effective tool to help prevent and detect concerted actions. Therefore, amendments to the Fair Trade Act (hereinafter referred to as the "FTA") passed on 23 November 2011 contained a new provision, Article 35 (leniency clause) with the aim of the effective deterrence and detection of illegal concerted actions.

Following the amendments in 2011, in order to increase transparency and clarity of implementation of the leniency policy, the FTC was empowered to issue "Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases" under Paragraph 2, Article 35 of the FTA. The Leniency Regulations are the main guidance on the leniency policy in Taiwan, including, but not limited to the following aspects:

1. Requirements for a leniency application;
2. A leniency applicant's eligibility and the number of eligible applicants (immunity from and reduction of fines can be granted to up to five applicants) as well as exclusions (an enterprise can not apply for leniency when it has coerced other enterprises to participate in the alleged concerted action or has restricted others from exiting the concerted action);
3. The timing, procedure and method of a leniency application (the application can be filed in writing or orally, submitted with required evidence before or after the FTC's investigation);
4. Obligations of a leniency applicants (confidentiality obligations and assistance with the FTC's investigation)
5. Full immunity or reduction of fines may be granted (it may vary from 10% reduction of fines to full immunity).

Q1: What the competent authority is in charge of the leniency policy? What law and regulations is the leniency policy subject to?

A1:

1. The Fair Trade Commission (hereinafter referred to as the "FTC") is the competent authority responsible for implementation of the "leniency policy".

2. The main legislation concerning the leniency policy include:

(1) Article 35 (leniency clause) of the Fair Trade Act (hereinafter referred to as the "FTA").

(2) "Regulations on Immunity and Reduction of Fines in Illegal Concerted Action Cases" (hereinafter referred to as the "Leniency Regulations").

Q2: What is the nature of the leniency policy? Can it be applied to any violations of competition law other than concerted actions?

A2:

1. The sanction regime of concerted actions under the FTA suggests that "an administrative penalty is imposed at first, but a subsequent criminal prosecution may apply in certain circumstances". The leniency policy in Taiwan is subject to an administrative legal regime and only immunity from or reduction of administrative penalties is available.

2. The leniency policy is only applied to horizontal concerted actions.

Q3: Can the leader in a concerted action apply for leniency? Are there any conditions on a leniency applicant?

A3:

1. Yes. The leader in a concerted action can apply for leniency.

2. The leniency policy is not applied to any enterprise who has coerced other enterprises to participate in the alleged concerted action or has restricted others from exiting the concerted action (Paragraph 1, Article 2 of the Leniency Regulations).

Q4: What requirements does a leniency application have to meet? When a leniency application is filed, what extent of information and evidence is the applicant required to provide?

A4:

1. The requirements for a leniency application vary depending on whether the application is filed before the FTC is aware of the alleged concerted action in which the applicant has participated, or is filed during the investigation period of a concerted action case. The requirements for an application are as follows:

(1) An enterprise files a complaint in writing or informs the FTC of the concrete content of the concerted action in which it has partaken and submits evidence and assists the investigation before the FTC is aware of the alleged illegal conduct or initiated an investigation in accordance with the FTA (Subparagraph 1, Paragraph 1, Article 35 of the FTA, and Subparagraph 1, Paragraph 1, Article 3 of the Leniency Regulations); or

(2) An enterprise reveals the concrete illegal conduct as well as submits evidence and assists the investigation during the period in which the FTC is investigating the alleged illegal conduct in accordance with the FTA (Subparagraph 2, Paragraph 1, Article 35 of the FTA, and Subparagraph 2, Paragraph 1, Article 3 of the Leniency Regulations).

2. In the above circumstances, the extent of information and evidence, which the applicants are required to provide are as follows:

(1) In the first circumstance, the applicant's complaint, or the concrete content of the violation and evidence submitted by the applicant must be able to assist the FTC in initiating an investigation (Subparagraph 1, Paragraph 1, Article 3 of the Leniency Regulations). The concrete content of the violation and the evidence refers to concrete details of the concerted action, in which the applicant has been involved, along with related evidence, which the FTC is not aware of or does not possess. The evidence should provide the FTC with an outline of the concerted action in question as well as the time and location where the mutual understanding has been established and the content of the mutual understanding or other related matters to initiate an investigation. (Paragraph 2, Article 4 of the Leniency Regulations).

(2) In the second circumstance, the concrete content of the violation and evidence submitted by the applicant must be able to assist the FTC in establishing a violation of Paragraph 1, Article 15 of the FTA. (Subparagraph 2, Paragraph 1, Article 3 of the Leniency Regulations). For an application for full immunity from fines, the applicant shall provide evidence, which the applicant has obtained and is capable of proving the violation of the concerted action in question. Regarding an application for reduction of fines, the applicant shall provide evidence, which is able to assist the FTC in its investigation of the concerted action in question, or enhance the probative value of evidence the FTC has obtained. (Paragraph 1 and Paragraph 2, Article 5 of the Leniency Regulations).

Q5:  What requirements should a leniency applicant meet to be granted immunity from or reduction of fines?

A5：

1. Requirements of an application for full immunity from fines (Article 7 of the Leniency Regulations):

(1) The applicant must be the first enterprise to apply for leniency. However, the applicant, who files an application during an investigation period, may qualify for full immunity if there is no other enterprise meeting the immunity requirements.

(2) A conditional approval is granted under Article 6 of the Leniency Regulations.

(3) The applicant needs to fulfill all obligations listed on the above conditional approval.

2. Requirements of an application for reduction of fines (Article 8 of the Leniency Regulations):

(1) Applications made during an investigation period, or a change request for reduction of fines when an application for full immunity is rejected.

(2) A conditional approval is granted under Article 6 of the Leniency Regulations.

(3) The applicant needs to fulfill all obligations listed in the above conditional approval.

3. In addition to the above conditions, any application for immunity from or reduction of fines is prohibited from falling into any of the following circumstances (negative conditions):

(1) Any enterprise applying for leniency cannot destroy, forge, alter or conceal any evidence in relation to the concerted action in question (Subparagraph 1, Paragraph 2, Article 2 of the Leniency Regulations).

(2) Any enterprise cannot directly or indirectly disclose its intention to apply for leniency or any content of the application which it intends to provide to the FTC (Subparagraph 2, Paragraph 2, Article 2 of the Leniency Regulations).

Q6: What is the content of a conditional approval? Is it a final decision?

A6:

1. The content of a conditional approval includes the following matters (Article 6 of the Leniency Regulations):

(1) The applicant shall withdraw from the concerted action in question immediately upon filing the application or at a time specified by the FTC.

(2) The applicant shall follow the FTC's instructions and provide honest, full and continuous assistance during the investigation (obligations to assist the FTC with its investigation).

(3) Other matters specified by the FTC.

2. The conditional approval is not a final decision, but an interim decision in the investigation process. By obtaining it the applicant can be aware of his/her priority status in terms of immunity from, or reduction of fines. The final decision on immunity from or reduction of fines will not be made until the applicant fulfills all obligations, which are listed in the conditional approval, and where the conditional approval has not been revoked throughout the investigation (Article 16 of the Leniency Regulations).

Q7: What are an applicant's obligations to assist the FTC in its investigation?

A7:

1. The obligation to provide the FTC at the earliest time with all the information and evidence regarding the concerted action in question (including those that are currently in the applicant's possession or will be obtained by the applicant in the future).

2. The obligation to provide prompt description or cooperate during the investigation.

3. The obligation to be interviewed by the FTC (including the applicant's staff members or representatives).

4. The obligation of truthfulness in statements without any falsehood, destruction, forgery, alternation or concealment.

5. The obligation of confidentiality: no disclosure is allowed without the FTC's consent.

Q8: Is there a marker system applicable? How can an enterprise apply to preserve its priority status? Why does the maker applicant lose the preserved priority status?

A8:

1. Yes, there is a marker system used in the current leniency policy in Taiwan (Article 11 of the Leniency Regulations). The marker system is only applied to an initial application for full immunity. It is not available for subsequent applicants.

2. When an applicant does not have sufficient information to file a formal application for full immunity, the applicant can file a marker application to the FTC to preserve the priority status in a written or oral statement containing the following information:

(1) the name of the enterprise, the uniform invoice number, the paid-in capital, the annual revenue, the name of the representative or person in charge, the company address, and the date of company registration;

(2) the product or service involved, the form of the concerted action, the geographic areas affected, and the duration of the action;

(3) the names, company addresses, and representatives or persons in charge of the other involved enterprises;

3. If the marker applicant does not provide information and evidence meeting the requirements within a period specified by the FTC, the marker applicant will lose the preserved priority status.

Q9: How many applicants can be granted immunity from or reduction of fines under the Leniency Regulations?

A9:

1. Only the first applicant can be granted full immunity from fines.

2. The second and the subsequent applicants (up to four successful applicants) can be granted reduction of fines. The fine reductions range between: 30%~50% reduction for the first applicant for reduction of fines; 20%~30% reduction for the second applicant; 10%~20% reduction for the third applicant, and up to 10% reduction for the forth applicant.

Q10: When leniency is granted to an enterprise, what is its impact on the inpidual in this enterprise?

A10:

The board directors, representatives, or managers of an involved enterprise or others with the authority to represent the enterprise, who are jointly penalized with the enterprise under Paragraphs 1 and 2 of Article 15 or Article 16 of the Administrative Penalty Act, may be granted immunity from, or reduction of fines when meeting the following requirements(Article 9 of the Leniency Regulations):

1. The involved enterprise meets requirements for immunity from or reduction of fines;

2. The said inpiduals provide honest and full statements with regard to the unlawful conduct;

3. The said inpiduals have followed the FTC's instructions and provided honest, full and continuous assistance during the investigation until the case is concluded.

Q11: What is the format of an application required by the Leniency Regulations? Is it necessary to file a leniency application in writing? What is the format when filling a written application?

A11:

When applying to preserve the priority status, or applying for immunity from or reduction of fines, an enterprise can file its application either in writing or orally, and can commission an agent to apply on its behalf. A written application should be compliant with the format established by the FTC (more information is available on the leniency application form). It should be submitted by registered mail or in person. In terms of an oral application, an applicant's representative must appear at the FTC's office to make a statement. The FTC will record the statement and the applicant shall sign a record as confirmation (Article 10 of the Leniency Regulations).

Q12：Is the identity of a leniency applicant kept confidential?

A12：

Unless otherwise agreed by the parties, or stipulated by law, the identity of a leniency applicant is kept confidential. Confidentiality is maintained during an administrative litigation process (Article 20 of the Leniency Regulations)

Q13: How does a foreign enterprise apply for leniency?

A13:

Any foreign enterprise filing a leniency application should prepare relevant documents in accordance with the Leniency Regulations. Its application must be written in Chinese. If any documents attached to its application are written in a language other than Chinese, the FTC will request for Chinese translations.

Fair Trade Act Article 35 (Amendment Promulgated on November 23, 2011)

The competent authority may grant exemption from or reduction of fines to be imposed in accordance with paragraph 1, 2 of Article 40 on enterprises in violation of Article 15 but meeting one of the following conditions:

the enterprise files a complaint or informs the competent authority in writing about the concrete illegal conduct of the concerted action in which it has partaken and also submits the evidence and assists the investigation before the competent authority is aware of the said illegal conduct or initiated an investigation in accordance with this Act;

the enterprise reveals the concrete illegal conduct as well as submits the evidence and assists the investigation during the period in which the competent authority investigates the said illegal conduct in accordance with this Act.

The competent authority shall enact the regulations with regard to the eligibility of the subjects to whom the preceding paragraph applies, the criteria of the said fine reduction and exemption and the number of enterprises to be granted the said fine reduction or exemption, evidence submission, identity confidentiality, and other matters in relation to the enforcement of the said regulations.