Amid much attention and not a little doubt at home and abroad, the nine members of the Fair Trade Commission (FTC) agreed unanimously to accept Microsoft Corporation's request for an administrative settlement to the dispute over its allegedly unfair trade practices in Taiwan after four hours of debate on Oct. 31.
I have misgivings about the appropriateness of the FTC negotiating an administrative settlement in the political and economic atmosphere generated by the US software giant's various moves. Will the FTC be able to stick independently and calmly to its important role as maintainer of market competition mechanisms in the settlement process? I also worry whether the FTC will get bitten when "asking the tiger for its skin" (
My worries are not groundless. The FTC should seriously consider these criticisms and act to dispel public doubts. These doubts arise partly from unfamiliarity with the administrative settlement system, as many are afraid that Taiwan may sign an unfair settlement. In fact, an administrative settlement is considered a kind of administrative contract, officially recognized by the Administrative Procedure Law (
I hope that the FTC is taking the right course. However, as far as the commission's three-point statement is concerned I don't see any fact or legal relation that is "impossible to ascertain through investigation." If the FTC doesn't clarify its decision and reaches the settlement recklessly, it will be laughed at for currying favor with Microsoft while putting Taiwan's administrative laws aside. That being so, is the government a winner or a loser if it wins the settlement by abusing the administrative laws?
We have to note that the FTC and much of public opinion seem to have placed particular stress on the direct interests of consumers once Microsoft lowers its software prices. The control of such "monopolistic prices" is highly controversial in the making of competition policy the world over.
The US Antitrust Law doesn't place restrictions on high prices since the law is based on the premise that high prices can attract competition.
Although monopolistic prices have been regulated in the EU and Taiwan, which place greater value on the short-term interests of customers, there have not been too many instances in which this has been a success.
The FTC should play the dual role of both maintainer and promoter of competition, instead of that of constant controller of market prices. As it negotiates the settlement, the FTC should break Microsoft's monopoly in our software market, bring in the software company's international competitors and, most importantly, enhance the competitiveness of Taiwan's software industry.
In so doing, it will be exercising its full role and powers. After all, it is market competition, not just one or two price cuts, that will best protect consumers' interests. For the sake of the ultimate interests of the public, the FTC must promote market competition.
Wu Shiow-ming is an associate professor of law at National Chengchi University
TRANSLATED BY EDDY CHANG
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