VZCZCXRO8327
RR RUEHCHI RUEHCN RUEHFK RUEHGH RUEHHM RUEHKSO RUEHPB
DE RUEHIN #2172/01 1740731
ZNR UUUUU ZZH
R 230731Z JUN 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0849
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE
RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC

UNCLAS SECTION 01 OF 02 TAIPEI 002172 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC, EB/TPP/IPE, STATE PASS USTR FOR 
ALTBACH, USDOJ FOR CHEMTOB, USDOC FOR DUTTON 
 
E.O. 12958: N/A 
TAGS: ECON KIPR ETRD TW
SUBJECT: TAIWAN'S FAIR TRADE COMMISSION TO REVISE FAIR 
TRADE LAW 
 
 
¶1.  Summary:  Representatives from the U.S. Department of 
Justice and the U.S. Federal Trade Commission met with 
Taiwan's Fair Trade Commission (TFTC) on the margins of a 
larger international competition seminar to discuss Taiwan's 
plans to reform its Fair Trade Law and the benefits of 
adopting a leniency system for those who report illegal 
anti-competitive conspiracies.  Taiwan officials praised 
previous bilateral consultations between the USDOJ and TFCT 
and urged that another meeting be scheduled in the near 
future.  AIT fully supports continuing this valuable 
competition policy dialogue.  End Summary. 
 
============================================= === 
Taiwan FTC Proposes Amendments to Fair Trade Law 
============================================= === 
 
¶2.  U.S. Deputy Assistant Attorney General (DAAG) Gerald 
Massoudi, Alden Abbott, Association Director for Policy and 
Coordination from the U.S. Federal Trade Commission (USFTC) 
and AIT Econ officers met June 19 with Hwang Tzong-leh, 
Chairman of Taiwan's Fair Trade Commission (TFTC) to discuss 
the U.S. Leniency Program for anti-competitive behavior and 
Taiwan's proposed amendments to its Fair Trade Law.  Chairman 
Hwang was accompanied by Commissioners Wang Wen-yue, Chang 
Li-chang and Hwang Mei-ying as well as senior staff from the 
TFTC.  This meeting took place on the margins of the 
TFTC-organized International Conference on Competition Law 
and Policy. 
 
==================================== 
TFTC an Active Competition Authority 
==================================== 
 
¶3.  Taiwan's FTC was established in 1992, reviewing over 
25,000 cases and imposing penalties in 2520 cases, including 
fines of NT$1.73 billion (US$ 54 million).  The TFTC has 
recently pursued cases against Microsoft (2003) that resulted 
in a negotiated settlement lowering software prices for 
Taiwan consumers; Taiwan gasoline suppliers, including 
state-owned China Petroleum, for illegal price fixing; Taiwan 
sand and gravel suppliers for hoarding and anti-competitive 
behavior; and 21 cement suppliers, including international 
suppliers, for collusion and price fixing.  The TFTC team 
investigating this case was named Team of the Year for 2005 
by the U.K. "Global Competition Review" magazine. 
 
¶4.  The TFTC is proposing amendments to the Fair Trade Law to 
ease controls on mergers, adopt a leniency policy to 
discourage collusion, provide exemptions to antitrust 
regulations for some types of innovation promoting strategic 
alliances, improve regulation of multilevel marketing, and 
revise fines and penalties to better reflect economic 
damages.  DAAG Massoudi provided information on the U.S. 
leniency program and recommended the TFTC consider similar 
provisions in Taiwan. 
 
¶5.  Commissioner Wang noted that the TFTC scope for leniency 
is limited because it currently cannot initiate criminal 
prosecutions and must rely on administrative sanctions that 
are not as effective a deterrent.  Other TFTC senior staff 
raised concerns about threats of violence against those 
requesting leniency by other members of the conspiracy. 
DAAG Massoudi replied that while threats of violence of this 
sort were rare in the U.S., the U.S. RICO Act provides the 
basis for criminal prosecution in those cases. 
 
====================================== 
Asking for Continued Official Dialogue 
====================================== 
 
¶6.  Chairman Hwang closed the discussion by noting the 
regular dialogue between the U.S. and Taiwan on competition 
policy, first established in 2004 with the visit of U.S. 
Deputy Attorney General Delrahim.  Since that visit, there 
have been annual dialogues hosted by each side, including a 
digital video conference in March 2005.  Hwang praised these 
meetings as extremely useful for both sides and asked DAAG 
Massoudi to help facilitate additional exchanges of this 
nature. 
 
¶7.  The bilateral dialogue was a precursor to a larger 
two-day international seminar on "The Role of Competition 
Law/Policy in Socioeconomic Development", attended by experts 
in competition policy and antitrust law, including 
representatives of competition authorities from Germany, the 
U.S., France, South Africa, New Zealand, Australia, Italy, 
 
TAIPEI 00002172  002 OF 002 
 
 
Japan, Korea, Malaysia, Mongolia, Indonesia, Vietnam and 
Taiwan, as well as experts representing the WTO and OECD. 
 
¶8.  Comment: Taiwan is an observer of the OECD Committee on 
Competition and is eager to demonstrate its ability to 
participate in a productive and meaningful way in this 
international forum.  Conference delegates commented that the 
event was extremely well organized and productive.  Previous 
bilateral dialogues between USDOJ and TFTC focused on a 
discussion of the competitive effects of patent pooling 
(specifically the Philips/Sony patent pool on CD-Rs) and 
private sector responses to enforcement of competition laws. 
The most recent meeting was a digital video conference in 
March 2005.  AIT believes such ongoing discussions are a 
useful way to inform Taiwan competition authorities about 
U.S. concerns and practices and supports continued dialogue 
on this topic.  End Comment. 
KEEGAN