TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
4.2 Markets Affected by a Transaction In general, to determine the markets that may be affected by the transaction, the TFTC will examine the markets where the parties’ activi - ties overlap and/or have a vertical relationship. In practice, the TFTC will also look into the par - ties’ respective major businesses in Taiwan from time to time, even if such businesses have no relevance to the proposed transaction. There is no de minimis concept under the TFTA. 4.3 Reliance on Case Law The TFTC may sometimes rely on its own case precedents to review the present case. Although the TFTC may take case law in other jurisdictions into consideration, it is less likely to rely solely on other jurisdictions’ views to make its decision. 4.4 Competition Concerns The competition concern that the TFTC will investigate varies depending on the type of com - bination. 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. If the combining enterprises engage in a verti - cal combination, the TFTC will take the following factors into account: • the possibility for other competitors to choose trading counterparts after the combination; • the level of difficulty for businesses not participating in the combination to enter the relevant market;
• One of the enterprises participating in the merger directly owns more than one-third and less than half of the voting shares or paid-up capital of the other merging party. • The following four types of combinations are considered to have a relatively lower impact on Taiwan’s domestic markets: (a) where the transaction value is below TWD2.5 billion; (b) in a horizontal combination, where the combined Taiwan revenue of the par - ticipating parties’ relevant products or services does not reach TWD200 million; (c) in a vertical combination, where none of the participating parties has generated TWD200 million or more in Taiwan for the relevant products or services; or (d) where the enterprise being combined generates no Taiwan revenue. Nonetheless, the TFTC would still request the parties to follow the standard procedure in certain situations, such as where the merger involves major public interest or where the entry barriers are high, even if they have met the above-mentioned criteria to be eligible for the simplified procedure. If there is no suspicion of obvious competition restraints after all relevant factors have been considered, the TFTC will conclude that the overall economic benefits of the merger out - weigh the disadvantages resulting from com - petition restraint and thus clear the transaction. Otherwise, the TFTC should further examine the overall economic benefits of the merger to deter - mine whether they outweigh the disadvantages resulting from competition restraint. 4. Substance of the Review 4.1 Substantive Test
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