TAIWAN'S FAIR TRADE COMMISSION TO REVISE FAIR

UNCLAS SECTION 01 OF 02 TAIPEI 002172 SIPDIS SIPDIS STATE FOR EAP/RSP/TC, EB/TPP/IPE, STATE PASS USTR FOR ALTBACH, USDOJ FOR CHEMTOB, USDOC FOR DUTTON E.O. 12958: N/A TAGS: ECON KIPR ETRD TW SUBJECT: TAIWAN'S FAIR TRADE COMMISSION TO REVISE FAIR TRADE LAW ¶1. Summary: Representatives from the U.S. Department of Justice and the U.S. Federal Trade Commission met with Taiwan's Fair Trade Commission (TFTC) on the margins of a larger international competition seminar to discuss Taiwan's plans to reform its Fair Trade Law and the benefits of adopting a leniency system for those who report illegal anti-competitive conspiracies. Taiwan officials praised previous bilateral consultations between the USDOJ and TFCT and urged that another meeting be scheduled in the near future. AIT fully supports continuing this valuable competition policy dialogue. End Summary. ============================================= === Taiwan FTC Proposes Amendments to Fair Trade Law ============================================= === ¶2. U.S. Deputy Assistant Attorney General (DAAG) Gerald Massoudi, Alden Abbott, Association Director for Policy and Coordination from the U.S. Federal Trade Commission (USFTC) and AIT Econ officers met June 19 with Hwang Tzong-leh, Chairman of Taiwan's Fair Trade Commission (TFTC) to discuss the U.S. Leniency Program for anti-competitive behavior and Taiwan's proposed amendments to its Fair Trade Law. Chairman Hwang was accompanied by Commissioners Wang Wen-yue, Chang Li-chang and Hwang Mei-ying as well as senior staff from the TFTC. This meeting took place on the margins of the TFTC-organized International Conference on Competition Law and Policy. ==================================== TFTC an Active Competition Authority ==================================== ¶3. Taiwan's FTC was established in 1992, reviewing over 25,000 cases and imposing penalties in 2520 cases, including fines of NT$1.73 billion (US$ 54 million). The TFTC has recently pursued cases against Microsoft (2003) that resulted in a negotiated settlement lowering software prices for Taiwan consumers; Taiwan gasoline suppliers, including state-owned China Petroleum, for illegal price fixing; Taiwan sand and gravel suppliers for hoarding and anti-competitive behavior; and 21 cement suppliers, including international suppliers, for collusion and price fixing. The TFTC team investigating this case was named Team of the Year for 2005 by the U.K. "Global Competition Review" magazine. ¶4. The TFTC is proposing amendments to the Fair Trade Law to ease controls on mergers, adopt a leniency policy to discourage collusion, provide exemptions to antitrust regulations for some types of innovation promoting strategic alliances, improve regulation of multilevel marketing, and revise fines and penalties to better reflect economic damages. DAAG Massoudi provided information on the U.S. leniency program and recommended the TFTC consider similar provisions in Taiwan. ¶5. Commissioner Wang noted that the TFTC scope for leniency is limited because it currently cannot initiate criminal prosecutions and must rely on administrative sanctions that are not as effective a deterrent. Other TFTC senior staff raised concerns about threats of violence against those requesting leniency by other members of the conspiracy. DAAG Massoudi replied that while threats of violence of this sort were rare in the U.S., the U.S. RICO Act provides the basis for criminal prosecution in those cases. ====================================== Asking for Continued Official Dialogue ====================================== ¶6. Chairman Hwang closed the discussion by noting the regular dialogue between the U.S. and Taiwan on competition policy, first established in 2004 with the visit of U.S. Deputy Attorney General Delrahim. Since that visit, there have been annual dialogues hosted by each side, including a digital video conference in March 2005. Hwang praised these meetings as extremely useful for both sides and asked DAAG Massoudi to help facilitate additional exchanges of this nature. ¶7. The bilateral dialogue was a precursor to a larger two-day international seminar on "The Role of Competition Law/Policy in Socioeconomic Development", attended by experts in competition policy and antitrust law, including representatives of competition authorities from Germany, the U.S., France, South Africa, New Zealand, Australia, Italy, TAIPEI 00002172 002 OF 002 Japan, Korea, Malaysia, Mongolia, Indonesia, Vietnam and Taiwan, as well as experts representing the WTO and OECD. ¶8. Comment: Taiwan is an observer of the OECD Committee on Competition and is eager to demonstrate its ability to participate in a productive and meaningful way in this international forum. Conference delegates commented that the event was extremely well organized and productive. Previous bilateral dialogues between USDOJ and TFTC focused on a discussion of the competitive effects of patent pooling (specifically the Philips/Sony patent pool on CD-Rs) and private sector responses to enforcement of competition laws. The most recent meeting was a digital video conference in March 2005. AIT believes such ongoing discussions are a useful way to inform Taiwan competition authorities about U.S. concerns and practices and supports continued dialogue on this topic. End Comment. KEEGAN