Newsletter
TFTC’s Amendments to the Merger Control Regulations
Taiwan's Fair Trade Commission (the "TFTC") is planning to make a number of overhauls to its merger control regulations in 2021 in order to enhance the efficiency of its merger review and the quality of its decisions. In this connection, the TFTC promulgated the Guidelines on the Provision of Pre-Filing Consultation Service (the "Consultation Guidelines") on August 18, 2021 to launch its prior consultation service to enterprises that are planning to submit their merger filings to the TFTC. The key points of the Consultation Guidelines are summarized below.
n Who can request the consultation service?
This service is offered to participating parties who are planning to submit their merger filings to the TFTC. The request may be made by the participating parties on their own or through their agents with the proper power of attorney.
n What is the scope of the consultation service?
Through the consultation service, the TFTC will assist the participating parties in clarifying questions such as, whether the subject transaction has met the definition of a combination, whether any filing threshold has been reached, which entities should be named as the participating/notifying parties in the merger filing, what documents should be submitted for merger review and which type of procedure should apply for merger review.
n How to request the consultation service?
The consultation service may be requested via an inquiry in hardcopy or via the service box at the TFTC's official website. In the request, the details of the matters that are in need of consultation must be provided, including but not limited to the names of the participating parties, the products and/or services involved in the proposed transaction, the transaction structure, the markets that could potentially be affected by the transaction, the date on which the merger filing is expected to be submitted and the documents related to the transaction. Providing such information in full and in detail will ensure the efficiency and effectiveness of the consultation service.
n What is the timeframe for utilizing the consultation service? Any exception?
To ensure that the TFTC is adequately prepared to respond to the consultation, the consultation request should be made at least 10 working days prior to the expected filing date. For complex merger cases, it is advisable to make the request earlier so as to enhance the effectiveness of the consultation service. On the other hand, if the participating parties submit their merger filing to the TFTC within 10 working days of making the consultation request, the TFTC may cease the consultation service but directly proceed with the merger review procedure.
n How will the consultation inquiries be handled?
In addition to review of written documents, the TFTC may also elect to hold a meeting in person or via teleconference.
n Is there a limit to the number of times the participating parties may request for the consultation service?
Considering the limited time and resources the TFTC have for reviewing merger filings, in principle, participating parties may make only one consultation request for one merger filing.
n What about confidentiality?
In view of the highly confidential nature of merger transactions, the Consultation Guidelines stipulate that the information and materials disclosed by the participating parties during the consultation process shall be kept confidential by the TFTC personnel involved in providing the consultation service.
It is worth noting that according to the Consultation Guidelines, the advice and recommendations provided by the TFTC through the consultation service are for reference only and do not bind the TFTC's decision on the review of merger filings subsequently submitted by the participating parties. Hence, it is worthwhile to keep track of how the TFTC will operate in practice and how effective it will be in clarifying issues related to merger filings in advance via the consultation service after the Consultation Guidelines take effect.
Further, on August 24, 2021, the TFTC announced the amendment to the Directions for Enterprises Filing for Merger (the "Amended Merger Directions") and the amendment to the Merger Notification Form (the "Amended Notification Form"), which have taken effect since October 1, 2021.
The key points of these amendments are summarized below.
n The Amended Merger Directions
In the past, merger filings can only be submitted in hard copies, but under the Amended Merger Directions, the TFTC will also accept submissions in electronic files; that is, the notifying parties may use the TFTC's Merger Notification and Concerted Action Application Online Filing System to submit their merger filings. Nevertheless, the TFTC can still require the notifying parties to provide hard copies of their merger filings where the TFTC deems it necessary for its review and verification. Also, as the TFTC's merger review period is calculated based on working days, the Amended Merger Directions stipulates that where a notifying party uploads the electronic files of its merger filing on a non-working day, such filing will be deemed officially received by the TFTC on the next working day after the files are uploaded to the TFTC's system by the notifying party.
n The Amended Notification Form
Most of the amendments to the Notification Form are minor adjustments to wordings and numbering of sections. Substantive changes that would affect the notifying parties' data collection process occur mostly in the annexes to the Notification Form, such as:
(1). the pre-amendment Annex 2 (Sales Revenues of Participating Parties and Relevant Affiliates) has been deleted under the Amended Notification Form;
(2). regarding the production and sales information relating to the relevant products/services, the request of data for the participating parties' top 5 (for the standard review procedure) or top 3 (for the simplified review procedure) products/services is reduced to the top 3 and top 2 products/services. Nevertheless, data for the products or services relevant to the subject transaction must be provided regardless of whether they are within the participating parties' top 3 or top 2 products; and
(3). in the pre-amendment Annex 4 (Horizontal Competition Information Relating to the Relevant Market Structure), the notifying parties that are subject to the standard review procedure are only required to provide the information of their top 5 competitors for the subject product; now, under the Amended Notification Form, such notifying parties are advised to also list the names (without the sales or market share data) of their competitors that ranked the sixth to tenth on the market to further facilitate the TFTC's review.
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