This month’s editors: Maxime Vanhollebeke, Julienne Chang, Zhao Jingjing, Pearl Yeung, Cynthia Lee and Lydia Fung.
Below is an excerpt from our monthly Competition Report. More detailed commentary on these issues and other recent competition law developments in the Asian region is to be found in this month’s edition of our report available on a free subscription basis (see further below).
Back to top
First leniency case in Taiwan
Despite their involvement in a number of international cartels, which have led over the years to the imposition of substantial fines by foreign antitrust authorities, Taiwan-based companies have long remained relatively immune from sanction in respect of any similar practices on their domestic markets. Up until recently, there was little incentive for cartel participants to cooperate with the Fair Trade Commission in cartel investigations, as maximum penalties were low and because there were no benefits for cooperation. The Commission’s cartel enforcement accordingly focused on public cartels or on price-fixing practices which could be easily detected by consumers.
This situation changed at the end of last year, when Taiwan introduced a leniency regime under the Fair Trade Act, pursuant to which full immunity from administrative fines is granted to the first party to a cartel agreement that self-reports and adduces incriminating evidence. In a move to increase deterrence, the maximum level of fines that could be imposed for serious anticompetitive conduct was increased to 10 per cent of the parties’ turnover.
This month Taiwan’s Fair Trade Commission announced its first decision under the new leniency regime. In a decision sanctioning manufacturers of optical disk drives used in personal computers for bid-rigging practices, the Commission announced that it had granted full immunity to one of the participants. Further, it explained that the cartel was worldwide in nature, and that it had cooperated closely with the US Department of Justice and the European Commission in the investigation.
The new leniency regime and the increased international cooperation will likely lead to more cartel participants applying for leniency in Taiwan as a matter of course when making the decision to seek immunity in other jurisdictions.
Back to top
China signs antimonopoly law MOU with EU
On 20 September, the National Development and Reform Commission (NDRC) and the State Administration of Industry and Commerce (SAIC) entered into a Memorandum of Understanding on Cooperation with the European Commission in the area of anti-monopoly law. Nine years after China’s first high level cooperation arrangement with the EU - the EU-China Competition Policy Dialogue - the MOU creates a dedicated framework to strengthen cooperation and coordination between the respective competition authorities in respect of antitrust enforcement. The Chinese Ministry of Commerce, which is responsible for merger control, is not a party to the MOU, and cooperation in respect of merger control is therefore not contemplated in the MOU.
The MOU covers legislation, enforcement and technical cooperation regarding cartels, other restrictive agreements and the abuse of dominant market positions. In addition to agreeing to exchange general views on their respective enforcement experience, the MOU provides that the relevant authorities may exchange non-confidential information about specific cases and engage in further coordination where enforcement activities on the same or related matters are being carried out in the two jurisdictions.
The MOU is broadly similar in scope with that concluded by the Chinese antimonopoly law agencies and their US counterparts in July 2011, although it contains stronger wording in respect of case cooperation. This also sets it apart from similar cooperation agreements between the Chinese agencies and their counterparts in the UK and Korea.
Back to top