Antitrust Litigation 2024 Comparisons

Private Enforcement

Private enforcement of antitrust law usually proceeds with civil lawsuits initiated by parties injured by alleged violations. Pursuant to Articles 29–33 of the Taiwanese Fair Trade Act (TFTA), if an enterprise violates any provision of the TFTA and thereby infringes upon the rights and interests of another, the aggrieved party may seek proper remedies from the civil courts. Available remedies include permanent injunctions requiring the infringing parties to cease the infringing activities, as well as compensatory damages.

Ordinary courts have jurisdiction over civil claims sounding in Taiwanese antitrust law. Plaintiffs may go to the IP Court if the subject matter of their claims involves IP issues.

Matter of Taiwan International Ports Corporation, Ltd. (Abuse of Market Dominance)

Chien Shing Harbour Service Co., Ltd. (Chien Shing), Taichung Harbour Warehousing & Stevedoring Co., Ltd. (THWS), and Teh Long Warehousing & Stevedoring Co., Ltd. (Teh Long) operate general cargo handling businesses at Taichung Port. THWS began operations in 1976 through a co-operative construction project with TIPC’s Taichung Port Branch.

TIPC treated old and new lessees differently by offering different lease periods and rents for warehouse facilities at Taichung Port. Chien Shing urged TIPC’s Taichung Port Branch to treat all lessees uniformly and fairly when fixing rents for lease renewals. Nonetheless, the TIPC Taichung Port Branch declined to adjust its rents and continued to charge different rents depending on the construction costs of the warehouses leased by cargo handling businesses. This caused discrepancies in the building rents that were being charged to competitors such as Chien Shing, THWS, and Teh Long.

Chien Shing asserted that TIPC’s Taichung Port Branch’s differential treatment of essential facilities for cargo handling operators constitutes unjustifiable abuse of market dominance in the Taichung Port general cargo handling market, leading to financial losses caused by the costs from building rents. This conduct was alleged to intentionally violate the TFTA’s provisions against abusing market dominance. Therefore, based on Articles 31 and 32 of the TFTA (2011) and Article 184 Paragraph 2 of the Civil Code, Chien Shing sought compensation from TIPC’s Taichung Port Branch for the financial losses incurred due to this differential treatment, resulting in higher building leasing costs. Articles 31 and 32 of the TFTA (2011) are now Articles 30 and 31 of the current TFTA.

The Taichung District Court referred to rulings by the Taiwanese Fair Trade Commission (TFTC), which affirmed that:

• TIPC has exclusive operational powers over critical facilities at all international ports within Taiwan. It did not face competition from other operators. Additionally, there were no economically feasible and technically viable alternatives to replicate or replace the port facilities in the short term. Therefore, the international port services provided by TIPC’s Taichung Port Branch enjoy overwhelming market dominance and allow it to exclude competition. It qualifies as a monopoly under the TFTA.
• TIPC’s Taichung Port Branch’s unjustified differential treatment of essential facilities for cargo handling contractors constitutes abuse of market dominance under Article 10 Paragraph 4 of the TFTA of 2011 (Article 9 Paragraph 4 of the current TFTA).

However, the Taiwan Taichung District Court ultimately concluded that there was no relationship between Chien Shing’s claimed losses from differential rent treatment and TIPC Taichung Port Branch’s violations of the aforementioned provisions of the TFTA. Therefore, the District Court denied Chien Shing’s claim for compensation of NTD41.22 million (approximately USD1.26 million) for losses arising from rental differentials.

Independent Power Providers: Concerted Action Case

Taiwan Power Company (TPC) entered into power purchase agreements with Ho-Ping Power Company (Ho-Ping), Mai-Liao Power Corporation (Mai-Liao), and seven other private independent power providers (IPPs). However, TPC alleged that from the year 2008 until October 2012, Ho-Ping, Mai-Liao, and the other seven IPPs held meetings under the auspices of a civil NGO that they had organised and named the IPP Association. At those meetings, they agreed not to adjust the power purchase tariffs at which they sold electricity to TPC. They mutually restrained business activities, engaged in concerted action to refuse rate adjustments, and caused TPC to suffer damages from fuel cost overpayments and excessive capital fees. This concerted action by Ho-Ping and Mai-Liao in refusing to adjust rates violated the provisions of the TFTA and constituted intentional illegal conduct, thereby subjecting them to triple damages under Articles 31 and 32 of the TFTA of 2011 (corresponding to Articles 30 and 31 of the current TFTA).

The TFTC determined on 15 March 2013 that Ho-Ping, Mai-Liao, and the other seven IPPs jointly refused to adjust power purchase rates with TPC. Their refusal significantly impacted the electricity generation market and violated the TFTA’s prohibition against concerted action. The TFTA imposed a fine of NTD 6.32 billion (approx. USD 193.1 million).

The court of the first instance, the Taiwan Taipei District Court, concluded that Ho-Ping, Mai-Liao, and the other seven IPPs did not compete in the same product market or geographic market for electricity services. Therefore, whether or not Ho-Ping, Mai-Liao, and seven other IPPs acted through the IPP Association to agree that they would refuse to adjust their tariffs does not constitute concerted action. Additionally, although the TFTC’s ruling determined that Ho-Ping, Mai-Liao, and the other seven IPPs had engaged in concerted action and imposed penalties accordingly, the court has the power to independently determine whether Ho-Ping and Mai-Liao should be liable for civil damages. In other words, the court is not bound by the TFTC’s ruling. The court of second instance, the Taiwan High Court, upheld the first instance court’s decision to dismiss TPC’s claims.

However, the Supreme Court, on 24 January 2024, concluded that the second instance court failed to consider TPC’s claim that Ho-Ping and Mai-Liao violated the TFTA prohibitions of concerted action by jointly refusing to negotiate lower rates with TPC, resulting in damages from differential tariffs used to pay for capital costs. Therefore, the Supreme Court reversed and remanded the judgment of the second instance court. The developments in this matter deserve attention from practitioners and members of the related industries.

Statutory Legal Basis for Damage Claims

Article 30 of the TFTA provides an express basis for a plaintiff to claim compensatory damages for breach of Taiwanese competition law. Under this provision, if an enterprise violates any provision of the TFTA and thereby infringes upon the rights and interests of another, the aggrieved party may go to civil courts to seek compensatory damages.

Injured Parties Required to Establish Elements of Their Claims

Follow-on claims are not available in Taiwan’s legal system. Victims (plaintiffs) bear the burden of proof and must establish all the elements for their claims. Even in a situation where the TFTC finds a particular antitrust law violation, the party injured by the violation still has to prove to the courts that the defendant violated the provisions of the TFTA. In other words, the TFTC’s rulings do not control the findings of courts in relation to whether an alleged violation has in fact occurred.

There is no specialist competition court or competition judge in Taiwan. However, the antitrust cases will be allocated to the High Court, the IP Court, or the ordinary courts based on different litigations.

For administrative litigation, the High Court will have jurisdiction over cases where IP issues are not present; the IP Court has jurisdiction over cases where IP issues are present. For civil claims, while ordinary courts will have jurisdiction, plaintiffs may go to the IP Court if the subject matter of their claims involves IP issues.

Article 7 of the Intellectual Property Case Adjudication Rules deals with the situation where a party mistakenly initiates a civil or administrative action in the IP Court but the IP Court does not have jurisdiction. In this circumstance, the IP Court is required to make a ruling that transfers the case to a court with jurisdiction in accordance with Article 28 Paragraph 1 of the Code of Civil Procedure and Article 18 of the Code of Administrative Litigation Act.

Non-Binding Nature of TFTC Rulings

The TFTC’s rulings do not bind Taiwanese courts that hear cases where antitrust law issues are present.

In particular, even if the TFTC has issued a ruling that imposes sanctions upon an alleged offender, in a civil lawsuit initiated by a victim of the alleged offender’s infringing activities, courts will independently examine the plaintiff’s claim without being bound by the TFTC’s findings in its ruling.

Likewise, in situations where the TFTC finds no violation of antitrust law provisions, the TFTC’s findings do not preclude Taiwanese courts from rendering different decisions.

Similarly, decisions by foreign antitrust regulators do not bind Taiwanese courts.

Non-Intervention of TFTC in Antitrust Damage Lawsuits

In most cases, the TFTC does not intervene in actions seeking compensatory damages brought by parties injured by violations of antitrust law.

Administrative Litigation Proceedings

Generally speaking, in administrative litigation proceedings, a party bears the burden of proof regarding the facts that they allege in their favour, except either where the law provides otherwise or where the circumstances render it manifestly unfair. In addition, courts will look into the factual matters and request the parties or any other third parties to produce evidentiary materials that the courts deem necessary.

At the same time, the parties may request the courts to investigate factual issues and produce evidence that the parties would like the courts to take into consideration. In addition, the parties may request the courts to order the other parties or any other third parties to produce evidentiary materials that are relevant to the cases.

Civil Proceedings

Plaintiffs in civil proceedings will have to produce evidence that suffices to establish each element required for a tort claim. Tortfeasor defendants will usually not have to establish any facts in relation to the elements required for a tort claim.

In relation to whether the enterprise has violated the provisions of the TFTA, if the TFTC has determined that the case constitutes a violation of the TFTA and has issued rulings accordingly, the civil court tends to adopt the TFTC’s opinion, incorporate the reasoning of the TFTC’s rulings in its judgment, or include the TFTC’s rulings decision as evidence. However, the court will still determine whether civil liability is established independently.

In situations where a party to a proceeding raises a “pass-on” defence, the party raising the defence must bear the burden of proof. In other words, said party needs to produce evidence that sufficiently establishes the facts supporting the “pass-on” defence.

Pursuant to Article 32 of the TFTA, a civil damage claim arising from a violation of the TFTA may be initiated only within one of the two following periods, whichever lapses earlier:

• two years from the date when the injured party becomes aware of the violation and knows the identity of the person liable for the harm; or
• ten years from the date on which the infringing conduct is committed.

The aforementioned periods will not be affected by the TFTC’s decisions.

Private Enforcement

It usually takes six months to one and a half years for courts to render first instance judgments in private enforcement cases (civil lawsuits).

The above timetable does not cover the time during which the appellate court and the Supreme Court render their judgments upon appeal.

In situations where there is a parallel investigation by the TFTC, parties may not apply for an order to stay the civil proceedings. This is because Taiwanese courts are not bound by the TFTC’s findings of facts and will make their own decisions on antitrust law issues in civil proceedings.

Taiwanese antitrust law does not provide an ad hoc basis for a class action or collective action. Nonetheless, the Civil Procedure Code allows for opt-in collective actions. Parties with common interests can select representatives, or designate a public interest group under certain circumstances, to file an action on behalf of all. With court approval, a public announcement may be made, allowing others with the same interest to join the collective action within a specified period. Additionally, authorised public interest groups can initiate civil class actions to halt unlawful conduct.

Taiwan primarily employs an opt-in system for collective actions. Individuals who have opted in to a collective action lawsuit retain the right to withdraw from the proceedings prior to the conclusion of oral arguments.

For class actions initiated by authorised public interest groups seeking to halt specific behaviours of the defendant, affected parties are afforded an opt-out option.

Taiwanese antitrust law does not provide an ad hoc basis for a class/collective action; it is thus uncertain whether a class/collective action could be brought by indirect purchasers and/or direct purchasers.

While Taiwan does not have a class certification procedure held by the court, public interest groups must obtain approval from the competent authority to initiate class actions. This approval requires the group to meet criteria such as adequate membership or assets, alignment of the lawsuit with their charter, and representation of at least 20 victims. These class actions are limited in scope, as they can only seek to stop specific behaviours of the defendant and cannot pursue other claims, such as damages. As part of the approval process, the competent authority is required to hear the defendant’s opinion before granting permission to file the lawsuit.

Jurisdiction

Generally speaking, a district court will have proper jurisdiction over a civil lawsuit if defendants have domiciles or residences in the territory subject to the court’s jurisdiction.

At the same time, when a civil lawsuit is based on tortious activities, a district court will have proper jurisdiction over the lawsuit if the harm or injury occurs within the territory subject to the court’s jurisdiction.

Applicable Law

In a civil lawsuit where a foreign element is present (for instance, if any of the parties are foreigners or foreign companies), the courts will determine the applicable law. Generally speaking, the law of the country that is most connected to the subject matter will be the applicable law.

For background, discovery is not available in civil, criminal, and administrative litigation proceedings in Taiwan.

Court Order to Produce Materials

A party to civil litigation may file a motion to order the opposing party or a third party to produce specific materials as evidence. In making such a motion, the moving party shall specifically identify the requested materials; overly broad or vague requests will be denied. If the requested materials are relevant to a fact substantially related to the moving party’s underlying arguments, the court may grant the motion and order the requested party (or third party) to produce the requested materials.

Such a court order is different from a search warrant. As a result, if the requested party (or third party) disobeys the court order, the court cannot compel the requested party (or third party) to produce the requested materials; however, the court may render a ruling that imposes sanctions upon the requested party (or third party) in certain situations.

Court Order to Preserve Evidence

A party may also file a motion for an evidence preservation order if there is a possibility that the evidentiary materials in the possession of the opposing party or a third party will be destroyed or altered. The moving party may file the motion before or during litigation proceedings.

The courts will grant such a motion when it is established that the requested materials are likely to be destroyed, hidden or altered.

An evidence preservation order is also different from a search warrant. While the courts may request the requested party (or third party) to produce the requested materials, failure to produce the requested materials will result only in court sanctions or in courts’ stipulation of a certain fact in the lawsuit proceeding.

The TFTC’s Investigation Power

When the TFTC is investigating an alleged violation, it may order the parties under investigation to produce materials that it finds relevant to the violation. Failure to comply with this request will result in administrative penalties. The TFTC may also conduct an on-site search and may seize any materials that it deems relevant to any alleged violations.

Any parties that have interests in any of the TFTC’s current/past investigations may request the TFTC’s approval for access to the materials collected by the TFTC during its investigation. The TFTC will consider whether the requesting party has grounds to have access to the materials.

As noted earlier, there is no discovery in Taiwan’s legal system. When a party is requested to produce certain documents that are privileged, the requested party may refuse to obey the production order and explain to the courts the grounds for its refusal. It will be subject to the courts’ discretion whether to impose any sanctions in response to a party’s refusal to produce.

The TFTC will keep confidential materials that relate to leniency and/or settlement agreement. In particular, the TFTC may reduce sanctions on a member of a concerted action if the member actively reports the concerted action to the TFTC and helps the TFTC to investigate the concerted action. In this situation, the identity of the whistle-blower will be kept confidential.

In the TFTC’s history of enforcement of the TFTA, there are two cases where the TFTC settled with the investigated enterprises. The enterprises in these cases were Microsoft and Qualcomm. Except for the published version of the settlement terms, the specific terms and conditions of the settlements for these two cases were protected from disclosure.

Witness testimony is one of the five types of evidentiary methods under the Taiwan Code of Civil Procedure, the Code of Criminal Procedure, and the Administrative Litigation Act.

Pursuant to the above acts, every person is under a general duty to testify in a lawsuit proceeding if this person has witnessed a certain set of facts that are relevant to the proceeding. That is, witnesses are required to state their own observations to the court in the trial proceedings as ordered or summoned by the court.

In a civil or administrative litigation procedure, a witness may, by consent of the parties, make written statements that set forth their testimony.

In most cases, a witness of facts will be subject to direct examination by the party that calls the witness and to cross-examination by the opposing party.

When being called to testify in a lawsuit proceeding, a witness may decline to answer any questions if the witness has proper grounds (such as self-incrimination) to do so. Otherwise, the witness will have to answer questions raised in the direct and/or cross-examination, as well as questions raised by the presiding judge. Failure to give testimony without due cause will result in sanctions.

Expert opinions are frequently relied upon by courts in antitrust law cases. In particular, when it comes to complicated economic issues or technology issues, courts tend to request institutions with relevant knowledge or experience to render expert opinions.

In most cases, expert opinions are made in the form of a written statement. Authors of these opinions will be called to testify only if the courts consider it necessary.

When testifying in court, an expert witness will be examined and cross-examined by the parties. The expert witness will also have to answer questions raised by the presiding judges.

In some cases, parties will appoint their own experts to produce expert opinions without the court’s prior permission. In this situation, the opposing party will usually dispute the qualifications of the expert. It will be subject to the court’s discretion whether to accept the opinions made by an expert appointed by one of the parties.

Assessment of Damages

Article 30 of the TFTA stipulates that an enterprise that violates any of the provisions of the TFTA and thereby infringes upon the rights and interests of another shall be liable for damages arising therefrom.

The amount of damages shall be assessed on the basis of actual injury suffered by the victim(s), and then, in practice, the court can possibly take the following factors into consideration:

• the impact of the violation on the related market and industries;
• the degree of severity of the violation;
• the interest(s) acquired by the perpetrator from the violation;
• the duration of the violation; and
• the intent or the degree of negligence of the perpetrator.

Pursuant to Article 31 Paragraph 1 of the TFTA, courts may grant punitive compensation if the victim (plaintiff) has established that the infringer (defendant) committed the violation wilfully. In these circumstances, the court has the discretion to treble the amount of the victim’s established loss.

“Passing-On” Defences

The TFTA does not expressly provide for a pass-on defence. Taiwan’s courts have not yet directly addressed whether a pass-on defence will be viable when considering the amount of damages.

Interest

Pursuant to Article 203, Article 229 Paragraph 2 and Article 233 Paragraph 1 of Taiwan’s Civil Code, if an enterprise is found by courts to be liable for compensation of damages to the injured parties, the violating enterprise shall be held by the court to be liable for interest of 5% per annum from a designated date (usually the date that the defendant receives the copy of the plaintiff’s complaint) until the full settlement of the compensation.

Under Taiwanese law, when a tortious activity is committed with the involvement of multiple persons, then those persons will be held jointly and severally liable for the tortious activity.

While the TFTA allows the TFTC to reduce administrative penalties when a member of a concerted action directly reports to the TFTC and helps the TFTC to investigate the concerted action, such leniency does not prevent this reporting member from being sued by any person injured by a concerted action.

When multiple parties are held jointly and severally liable for a certain tortious activity, the internal share of the joint and several liability will be determined in accordance with the proportion of their contribution to the tortious activity and to the resulting injuries.

In a situation where the parties are held jointly and severally liable for a certain tortious activity consider that there is a third party who also caused the same tortious conduct and/or the resulting injuries, the parties may file a lawsuit to request the third party to contribute a certain share of the joint liability.

Injunctive relief is available in both administrative and civil antitrust litigation.

To obtain an injunction, the moving party will have to establish facts showing that the injunction is necessary to prevent the moving party from suffering severe and irremediable harm.

The court will scrutinise the following factors acknowledged by the precedents:

• the likelihood of the petitioner to prevail in the litigation;
• the severity of the irremediable harm suffered by each party due to the grant of the injunction;
• the degree of loss and damage to each party; and
• the impact on public interest

When hearing a motion for injunctive relief, courts will notify the opposing parties and request the opposing parties to make comments on the motion. Injunctive relief can be obtained without notice and with no chance for comments from the opposing party only in the exceptional case where the petitioner can produce evidence showing the court that the opposing party should not be aware of the motion for injunction until it is granted.

Courts will usually render orders upon a motion for injunction within one or two months.

The moving party will be responsible for any injuries that the opposing party suffers due to an injunction in situations where the injunction is later considered ungrounded by courts in ordinary lawsuit proceedings.

Alternative dispute resolutions are available but not mandated for antitrust cases. In both civil and administrative lawsuit proceedings, parties may settle the cases with the involvement of courts.

In administrative lawsuit proceedings, where the TFTC is a party, alternative dispute resolution is available only in extremely exceptional cases and is thus de facto unavailable.

Private litigation funding is prohibited in Taiwan. Public (government-sponsored) funding is available in certain fields as specified by special laws and regulations.

Courts will order the losing parties to bear the costs and/or expenses incurred from the lawsuit proceedings.

In most cases, each party will have to bear its own attorney fees. The prevailing party in a third instance proceeding, however, may request the Supreme Court to order the losing party to reimburse a limited amount of attorney fees for the third instance proceeding.

Under Taiwanese law, in a civil lawsuit initiated by a foreign plaintiff (a foreigner or a foreign company) who does not have residence in Taiwan, the defendant in the lawsuit may request the court to order the plaintiff to post a bond of a certain amount sufficient to cover the total amount of the court fees for the second and third instances and any other necessary litigation expenses. The same rule does not apply to administrative litigation.

Appeals are available for both administrative litigation and private enforcement.

Administrative Litigation

Any parties who are not satisfied with the judgments by the first instance court (either the IP Court or the High Court) will be allowed to appeal to the Administrative Supreme Court, whose rulings will be final and conclusive.

The appealing party may only argue issues related to matters of law. The Administrative Supreme Court will not examine the lower courts’ findings of facts, except in some extremely exceptional situations.

Private Enforcement

Any parties who are not satisfied with the judgments by the first instance court (either the IP Court, the High Court, or the district courts) will be allowed to appeal to the appellate court. In a case where the value of the subject matter exceeds NTD1.5 million, the party who does not accept the judgment of the appellate court may file an appeal to the Supreme Court.

At the level of the appellate courts (the second-instance proceedings), both parties may argue issues of fact and law. The appellate courts will examine the lower courts’ findings of facts and may render a judgment based on different findings of fact.

At the level of the Supreme Court (the third instance proceedings), the appellant party may only argue questions of law. The Supreme Court will not examine the appellate courts’ findings of facts, except in some extremely exceptional situations.

At the end of 2023, the TFTC released the final version of its “White Paper on Competition Policy in the Digital Economy” (the “White Paper”). The White Paper explains the TFTC’s views on antitrust issues developing in the markets for digital services. Monopolies created by digital platforms received particular attention.

In light of US and EU cases, the TFTC expressed concerns and outlined its experience with several aspects of the digital economy. Topics discussed in the White Paper include the applicability of two-sided markets theory, killer acquisition, and the intricate relationship between competition and privacy. Furthermore, the White Paper observes that the growth of interactive entertainment industry in Taiwan warrants the TFTC’s scrutiny of false and misleading advertisements and endorsements by professionals and social media influencers. These issues resonate significantly in civil cases, where victims adversely affected by violations of the Taiwan Fair Trade Act (TFTA) can seek compensation and punitive damages from the responsible enterprises.

In summary, the White Paper not only sheds light on critical contemporary digital trends but also represents a pivotal milestone in the advancement of civil antitrust litigation in Taiwan.