TAIWAN Law and Practice Contributed by: Lihuei Mao, Dennis Yu and David Tien, Lee and Li Attorneys-at-Law
In June 2023, the TFTC also passed amendments to Combination Types to Which Paragraph 1, Article 11 of the Fair Trade Act Does Not Apply, which include an additional non-notifiable type of combination involving foreign enterprises that jointly establish or operate a joint venture outside Taiwan, which does not engage in economic activities within Taiwan. Nevertheless, the TFTC notes that “[the joint venture] not engaging in economic activities within Taiwan” means that it is not engaging in any economic activities that involve sup - ply and demand of goods or services in Taiwan – for example, the products produced by the joint venture are sold only outside Taiwan or sold exclusively to its foreign parent company, without affecting the supply and demand in Taiwan. The so-called economic activi - ties include the sale of goods or services, provision of quotations, bargaining and conclusion of sales, and contracts or engagement with counterparties in con - nection with the sale. 6.2 Criteria for Antitrust/Competition Review Substantive Test If the TFTC concludes – after considering all relevant factors – that the overall economic benefits of the merger outweigh the disadvantages resulting from competition restraint, clearance will be granted. Competition Concerns The competition concerns that the TFTC will investi - gate vary depending on the type of combination. By way of example, if the combining enterprises engage in a horizontal combination, the TFTC will take the following factors into consideration: • unilateral effects; • co-ordinated effects; • market entry; • countervailing power; and • other factors that may impede competition. Different factors will be considered if the combining enterprises engage in a vertical combination or a con - glomerate combination. Review Timeline After the initial filing is submitted, the TFTC will issue a request for information whenever it requires any sup - plemental information from the parties. The 30-busi -
ness-day waiting period starts to run only after the TFTC deems that all the required documents and information have been submitted. The parties may proceed with the proposed transaction if the TFTC does not make any objection to this within said 30-day period. If it is deemed necessary, the TFTC may short - en the 30-day waiting period or extend it up to 90 business days. 6.3 Remedies and Commitments According to the Merger Guidelines, the TFTC may impose the following remedies as conditions for clear - ance. • From a structural aspect – the parties may be ordered to take measures to dispose of the shares or assets in their holding, transfer part of their operations, or remove personnel from certain posi - tions. • From a behavioural aspect – the parties may be: (a) ordered to continue to supply critical facilities or essential elements to businesses outside the merger or to license such businesses to use their rights; and (b) prohibited from engaging in exclusive dealing, discriminatory treatment and tie-in sales. The TFTC has the right to impose other types of rem - edies 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. 6.4 Antitrust/Competition Enforcement Ability of TFTC to Prohibit or Interfere With Transactions The TFTC exercises this power by issuing a binding decision at the end of the regulatory process. Such decision will generally fall under one of the following three categories:
• clearance without condition; • clearance with conditions; or • a prohibition on the combination.
If the TFTC prohibits a combination, it will state its reasons in its decision regarding the anti-competition
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