The Taiwan Fair Trade Commission (TFTC) last month approved the proposed “vertical” acquisition of US electronic ink producer, E-Ink Corporation, by a local electronic paper display (EPD) manufacturer, Prime View International.

Antitrust issues

The companies are active in a nascent market and achieved very little revenue in Taiwan. The transaction thus fell well below the turnover thresholds set forth in Taiwan’s Fair Trade Act. However, the parties’ significant combined market share on the relevant markets (above 90%), exceeded by far the 25% market share threshold above which merger clearance is required under Taiwan’s merger control rules.

TFTC's conclusions

Although the companies each enjoyed a predominant market position in 2008, the TFTC concluded that the transaction would not lead to any foreclosure effects for two reasons:

  • there would be limited technological barriers to entry on the relevant markets; and
  • technological innovation, such as the introduction of colour and foldable EPDs are likely to attract more entrants.Merger among three LCD producers approved