Sat, Dec 03, 2011 - Page 2 News List

FTC embraces leniency policy

CARTEL BUSTING:The first company to provide information of a cartel will get full immunity, while a maximum of four following companies will receive reduced fines

By Lee I-chia  /  Staff Reporter

Amendments to the Fair Trade Act (公平交易法) will include a leniency policy aimed at preventing cartel activity, the Fair Trade Commission (FTC) said yesterday. The revisions would also increase the fine for extreme situations and enforce a limit on the joint compensation liability of civilian endorsers in false advertising cases, the commission said.

The amendments were passed by legislators and promulgated by the president last week. While the limit on joint compensation liability is now in effect, the enforcement of the leniency policy would begin next month, the -commission said.

The commission also passed a series of principles for dealing with violations by Internet advertising, which state that Internet advertisement should obey the principles of truth, immediate correction and full disclosure of limiting conditions.

The principles listed types of false advertising and stated that Internet users (including bloggers) who cooperate with advertisers in false advertising could also face legal action.

Fair Trade Commissioner and spokesperson Sun Lih-Chyun (孫立群) told a press conference yesterday that leniency policies are utilized in more than 50 countries and had proved to be very -successful in fighting cartels.

The leniency policy offers the first five companies involved in a cartel which self-report and hand over evidence that assists the commission in making a case either total immunity or a reduction in the fines.

“The first company to apply that provides the information required by the commission to bring a case will be offered total immunity, the second company a 30 percent to 50 percent reduction in fines, while the third will receive a 20 percent to 30 percent reduction, the fourth a 10 percent to 20 percent reduction and the fifth less than 10 percent,” Sun said.

“The maximum number is five, but if information or evidence from the first company is enough for an investigation, then there would be no need to reduce the fines imposed on other companies,” he added.

The maximum fine for behavior identified as being that of a cartel or monopoly is currently NT$25 million, Sun said, but in extreme cases the amendments allow the commission to impose fines of up to a maximum of 10 percent of the company’s annual sales revenue from the previous year.

“For example, if the company made a total of NT$10 billion in sales revenue last year, it could be fined up to NT$1 billion,” Sun said, adding the commission hoped the leniency policy would deter and eradicate cartel behavior, which greatly impinges on consumers’ rights

As for limits imposed on the joint -compensation liabilities of civilian endorsers, Sun said that while the commission is responsible for fining operators for false advertising, if consumers file civil suits seeking compensation, civilian endorsers face joint compensation liability and could be ordered to pay huge sums.

“Some bloggers have misunderstood the intention of this amendment and complained that it is unfair.” Sun said. “Actually the amendment is intended to protect bloggers who currently face joint compensation liability for false advertising, by limiting any fine to no more than 10 times the payment received from the advertiser.”

However, in the event a blogger did not receive payment for recommending products on the Internet, he or she would not be liable for a fine in a civil suit.

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