New Enforcement Trend for Vertical Restraints after Implementation of the 2015 Amendments to the Taiwan Fair Trade Act : A Preliminary Analysis

The most recent amendments to the Taiwan Fair Trade Act was passed and promulgated in 2015. These are the most significant amendments to the Act since its enactment in 1991. A number of substantive and procedural revisions have been made and we focus on the amendments to vertical restraints in this paper. We describe and compare the reviewing standards and legal requirements for vertical restraints before and after the 2015 amendments. In particular, we analyze the impacts from the amendments on the current rules and standards established under the old law. Overall, we argued that the 2015 amendments reflect a legislative intent in favor of a more effects-based approach to vertical restraints. Under this regulatory restructuring, a rule-of-reason reviewing standard with interbrand competition at the core of the enforcement framework is the preferable policy choice for regulating vertical arrangements. This further implies that market power should be used as a threshold to screen cases that merit investigations in the future