The Fair Trade Commission (FTC) of Executive Yuan stated on Dec. 8, 2011 that the FTC plans to follow the practice of South Korea, studying to revise and extend the three years of prosecution period to five years. If the amendment goes well, in combination with the leniency policy of the Fair Trade Act and the changing of the upper limit on fines for concerted actions to 1/10 annual turnover of the previous year, it is expected that this will result in a substantially effective determent effect on concerted actions of firms.
Concerted actions are generally complicated and often evolve into international cases, however, under the current law the prosecution period for an administrative sanction lasts only three years. As such, when the FTC receives such a case, there are usually only one or two years of valid prosecution period left, leading to a very tight time for investigation.
The FTC’s new move was motivated by a recent concerted action case in Korea. On Oct. 30, 2011, the Korean Fair Trade Commission (KFTC) announced a historical high (in S. Korea) amount of 194 billion Korean Won (about 5.3 billion Taiwan dollars) fine on ten Asian LCD panel manufacturers, including four Taiwan panel manufacturers such as AU Optronics (770 million Taiwan dollars) and Chi Mei Corporation (42 million Taiwan dollars), on account of these manufacturers' alleged collusion to manipulate prices in markets in violation of the Competition Law of South Korea. The KFTC said in this statement that corporations such as Chi Mei, AU Optronics (AUO), South Korea's Samsung Electronics and LG Display Co. caballed every two months over the years from 2001 to 2006 in secret bilateral or multilateral meetings to discuss how to avoid a slump in panel prices caused by oversupply, and decide the time and amplitude of decrease in the prices of Thin Film Transistor (TFT) LCD panels during these meetings. Moreover, these companies also conspired to pause production thereby to adjust the supply and demand of the market, and even to prevent dramatic drops in panel prices by spreading to media false messages that there were a short in supply in the markets.
The KFTC statement points out that companies being fined also include Chunghwa Picture Tubes Ltd. (8 million Taiwan dollars), HannStar Display Corp. (24 million Taiwan dollars) and subsidiaries of Samsung and LG Display in Taiwan and Japan. These companies cover up to 80 percent of the global LCD panel markets.