TAIWAN Law and Practice Contributed by: Derrick Yang, Judy Lo and Yu-Ting Su, Lee and Li Attorneys-at-Law
tion or other forms of alternative dispute resolution are employed to resolve such disputes. That said, the rules set forth by Taiwan’s FTC permit it to enter into settlement agreements with enterprises as an alterna - tive to issuing an administrative decision. The FTC may also enter into a settlement agreement with an enterprise during litigation proceedings. For example, in 2017, the FTC imposed a fine of TWD23.4 billion on a US company for abusing its dominant mar - ket position. After the claimant filed a lawsuit chal - lenging the decision, the parties ultimately reached a settlement under which the claimant agreed to a five-year commitment to invest in Taiwan and comply with various undertakings. 11. Outlook and Practical Guidance 11.1 Expected Legislative, Policy and Enforcement Developments Policies and enforcements regarding competition law and generative artificial intelligence (AI) is expected to be rolled out in the following 12 to 24 months. The FTC has been seeking public input in connection with AI- related competition law issues, with a particular focus on how large AI companies might gain market share or control essential resources through horizontal or verti - cal mergers. The consultation also explores the risk of anti-competitive bundling or tying strategies in diver - sification mergers. Key sectors such as AI chips and cloud services, which are already concentrated, will likely face increased regulatory scrutiny. This includes examining investments, licensing and employment practices that could raise competition concerns. 11.2 Practical Tips for Deal-Makers and Counsel It is essential for deal-makers to involve legal advisers when structuring M&A transactions in Taiwan. Apart from the FDI application and merger filing, sectoral regulatory approval may also be required, particularly
for highly regulated industries such as financial servic - es, healthcare, energy and tobacco, and for publicly listed companies. The parties are advised to assess transaction hurdles and approval requirements, in order to accurately estimate the transaction timeline. By identifying the regulatory risks early on, the par - ties may implement mitigation measures and develop a contingency plan for effective risk management. These steps help ensure compliance, avoid unnec - essary delays and facilitate a smoother transaction process. 11.3 Cross-Border and Geopolitical Considerations For international buyers and investors engaging in cross-border transactions involving Taiwan, several key considerations are critical for navigating regula - tory approvals and structuring the transaction effec - tively: • Cross-jurisdictional reviews: Cross-border trans- actions often require regulatory approvals from multiple jurisdictions. Co-ordinating the review processes and timelines across authorities in dif - ferent jurisdictions is essential. For example, the FTC will take into account the decisions made by authorities in other jurisdictions when reviewing a merger filing. • Geopolitical considerations: Transactions involv - ing PRC investors require special attention due to increased scrutiny. Investors must carefully assess their ownership structure and applicable restric - tions to comply with FDI restrictions. A thorough understanding of the regulatory environments in both Taiwan and the investor’s home jurisdiction is critical for managing geopolitical risks. • Jurisdictional issues: Choosing the appropriate dispute resolution venue, mechanism and appli - cable law that align with the parties’ interests can reduce uncertainty in the event of a dispute, ensure the enforceability of judgments/awards and facili - tate the effective resolution of potential conflicts.
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