TAIWAN Law and Practice Contributed by: Derrick Yang, Judy Lo and Yu-Ting Su, Lee and Li Attorneys-at-Law
• Additional factors may also be considered, such as innovation and impacts on digital ecosystems. 4.5 Efficiencies and Failing Firm Defence Parties may present efficiency and failing firm argu - ments in merger filings for the FTC’s consideration. Efficiency claims must demonstrate that the efficien - cies are achievable in the short term, unattainable without the merger, and ultimately benefit consum - ers. Failing firm arguments require evidence that the firm cannot meet its debt obligations in the short term, cannot survive through less anti-competitive alterna - tives, and will exit the market in the absence of the merger. The FTC typically assesses these arguments within the broader context of industry and market dynam - ics. For example, in a 2017 case, the FTC approved a cable TV merger despite a high market share. The decision cited factors such as digitalisation, shifting consumer demand from cable TV to online and alter - native platforms, demonstrated efficiencies, the failing status of one party, and increased competition. These considerations together led to the conclusion that the overall economic benefits still outweighed potential anti-competitive concerns. 4.6 Remedies and Commitments The FTC may impose structural, behavioural or hybrid remedies to address competition concerns arising from mergers. Structural remedies may include requir - ing divestment of shares/assets, business transfers or personnel changes, whereas behavioural remedies may involve obligations such as continued supply to third parties, IP licensing, or bans on exclusive deal - ing, discrimination or tying. Hybrid remedies, combin - ing elements of both, may also be applied on a case- by-case basis. In some cases, the FTC may inform the parties of potential competition concerns and invite them to propose appropriate remedies. To ensure effective oversight, the FTC may require the parties to provide periodic or ad hoc updates on the progress of remedy implementation. 4.7 Third-Party Participation Third parties such as competitors, customers, suppli - ers, employees and other relevant stakeholders may
To assist the parties with their merger analysis, the FTC offers non-binding, confidential pre-filing con - sulting services. However, any comments or opinions provided during this process are advisory in nature only and do not affect the parties’ independent filing decisions. 4.3 Substantive Test Generally, if there is no indication of significant com - petitive restraints after considering all relevant factors, the FTC will conclude that the overall economic ben - efits of the merger outweigh any potential disadvan - tages and will grant clearance. However, if competi - tive restraints are suspected, the FTC will undertake a more detailed assessment. Additionally, the FTC may consider industry-specific factors when reviewing mergers in sectors that impact public welfare, such as airlines, banking and finance, and 4C industries, in accordance with its established guidelines. In some cases, the FTC may also refer to its own precedents involving the same market(s) under review to inform its decision. 4.4 Theories of Harm and Key Issues In Taiwan, the most examined theories of harm in merger review include the following: • Unilateral effects: whether the merged entity could raise prices or reduce quality due to less compe - tition between the merging parties, considering market shares, concentration, product substitut - ability, etc. • Co-ordinated effects: whether the merger increas - es the risk of collusion among remaining competi - tors, influenced by factors such as market trans - parency and barriers to entry. • Entry and countervailing power: whether new entrants are restricted or may improve competition; whether the buyers in the relevant market(s) may constrain the merged firm’s market power. • Vertical foreclosure: in vertical mergers, the poten - tial for restricting rivals’ access to key inputs or customers, raising barriers to entry, or facilitating collusion will be considered. • Conglomerate concerns: inconglomerate mergers, the potential for cross-market leveraging or other anti-competitive effects will be considered.
73 CHAMBERS.COM
Powered by FlippingBook