There has been a string of cases recently in which senior management figures in Taiwanese companies have been handed custodial sentences by US courts, or forbidden from leaving the country. Most of these were prosecuted by the US Department of Justice under US antitrust laws. Taiwan relies on foreign trade and the US is a very important market for its exports, which makes this a trend with potentially significant implications.
The US wields considerable influence and US antitrust laws give local courts statutory jurisdiction over foreign defendants. According to the effects principle, should the US be affected by any anti-competitive practices carried out by a party operating overseas, US courts have the legal right to regulate or apply sanctions to said party. These sanctions can be either civil or criminal in nature. The size of the fines imposed has increased in recent years. Several Japanese companies have been fined US$100 million and British Airways, Korean Air, Japan Airlines, Mitsubishi Corp and Takeda Pharmaceutical have all been fined by US courts under this law.
In recent years, the US has also imposed heavier sanctions on individuals violating antitrust laws and demanded progressively longer sentences for overseas nationals. Although the department of justice provides guidance and information on how to avoid such violations and on what is considered acceptable behavior, antitrust litigation can be a drawn out process, and enormously expensive.
It is therefore vital that Taiwanese companies know how to mount an effective defense, present facts and figures beneficial to their case, select a US lawyer and deal with the often daunting civil, criminal and administrative procedures. This is knowledge they will need if they inadvertently get on the wrong side of the law or feel they have been unjustly accused.
Unfortunately, neither the Ministry of Foreign Affairs, overseas representative offices, the Ministry of Justice, the Ministry of Economic Affairs nor the Fair Trade Commission have much experience in dealing with such matters. Another problem is that government agencies tend to wait until a case is brought against an individual or company before they turn their attention to it, rather than amassing the relevant legal information before this happens. This means they tend to be unprepared when the time comes.
The situation is exacerbated by the highly theoretical approach to the law taken by legal departments in universities or at Academia Sinica. These tend to concentrate on academic research and rarely turn their attention to the practicalities of litigation in Taiwan or abroad. At present, there is no US civil litigation course available in any law department in Taiwan.
Antitrust laws give prosecutors excessive power and it is not uncommon for the basic rights of a company or its chief executive officer to be infringed. Such litigation can affect the future prospects of local companies.
As part of the recent AU Optronics case, US lawyers specializing in antitrust cases were brought in. These lawyers were able to use the pre-trial discovery system in the US to gather information relevant to the case, both by written interrogatories and oral examination, from the US government and third parties, as well as subpoenas for admissions and written documents considered beneficial to the defense.
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