TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
The ruling for foreign direct investments in Taiwan is separate from the merger control regime. In princi - ple, an investment into Taiwan is subject to the prior approval of the Department of Investment Review of the Ministry of Economic Affairs. In Taiwan, there are no rules for foreign subsidies; please refer to 9.1 Leg- islation and Filing Requirements for details. 4.7 Special Consideration for Joint Ventures There are no special considerations in the substan - tive review of joint ventures; however, possible co- ordination issues between joint venture parents will be examined by the TFTC. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions The TFTC has the ability to prohibit or otherwise inter - fere with a transaction; it exercises this power by issu - ing a binding decision at the end of the regulatory process. Such decision will generally come under one In a decision to prohibit a combination, the TFTC will state its reasons regarding the anti-competition dis - advantages to the Taiwan market caused by the pro - posed transaction. 5.2 Parties’ Ability to Negotiate Remedies Although the TFTA provides no remedy mechanism, experience suggests that the parties are able to pro - pose remedies to the TFTC for its consideration when it has concerns about a transaction. If the proposed remedies would constitute a material change to the notification, and thereby lead to the TFTC requiring additional information for its evaluation, the TFTC may stop the clock, and the waiting period will be reset only after the supplemental information is submitted. If the proposed remedies would not constitute a mate - rial change to the notification, the TFTC will take into account such remedies when rendering its decision on the merger notification before the waiting period of the following categories: • clearance without condition; • clearance with conditions; and • a prohibition on the combination.
expires. The TFTC will assess whether it would grant its clearance with conditions referring to such rem - edies. Typical Remedies In terms of the particular kinds of remedies that are typically used in practice, since the primary purpose of the remedies is to eliminate the anti-competition concerns, most competition authorities in differ - ent jurisdictions recognise that divestitures (a type of structural remedy) are the best way to achieve such a goal. In line with these international practices, the TFTC appears to accept structural remedies for divestitures (disposal of shares held by the party) and impose such remedies as conditions to clearance. In fact, the public records indicate that the TFTC has indeed adopted the divestment approach in a transac - tion involving a cable television business. The TFTC amended the Merger Guidelines in Septem - ber 2012 to include its official standards for remedies. According to the Merger Guidelines, the TFTC can impose the following remedies as conditions. • Measures impacting the structural aspect – the TFTC can order the parties to take measures to: (a) dispose of the shares or assets in their holding; (b) transfer part of their operations; or (c) remove personnel from certain positions. • Measures impacting the behavioural aspect – the TFTC can: (a) order the parties to continue to supply critical facilities or essential elements to businesses outside the merger; (b) order the parties to license such businesses to use their intellectual property rights; and (c) prohibit the parties from engaging in exclusive dealing, discriminatory treatment and tie-in sales. Despite this, the TFTC still reserves the right to impose other types of remedies on a case-by-case basis. The Merger Guidelines also point out that the TFTC may seek the parties’ opinions on the possible remedy before making a final decision.
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