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Taiwan Fair Trade Commission Releases Summary Report on Public Comments and Policy Statement on Competition Law Issues Related to Generative AI
To strike an appropriate balance between maintaining fair market competition and promoting innovation, and to understand the views of various sectors on competition issues related to generative artificial intelligence (AI), the Taiwan Fair Trade Commission (TFTC) previously issued the Explanatory Materials for Soliciting Public Comments on Competition Law Issues Related to Generative AI on July 18, 2025, in order to gather first-hand information on the status of Taiwan’s AI-related industrial supply chains and competitive dynamics, and to solicit public input to serve as a reference for formulating future enforcement positions. The Summary Report on Public Comments and Policy Statement on Competition Law Issues Related to Generative AI, having compiled and considered opinions from all parties and undergone multiple rounds of committee reviews, was finalized and released on March 18, 2026.
The TFTC stated that the contents of this report and policy statement are presented sequentially under seven competition-related topics: (i) access restrictions to critical inputs, such as chips and data; (ii) self-preferencing and switching barriers among cloud service providers; (iii) tying and ecosystem integration; (iv) talent mobility; (v) mergers; (vi) concerted actions; and (vii) unfair marketing practices. Taking into account responses from various sectors regarding these issues, the policy statement outlines the TFTC’s enforcement stance and direction, and provides illustrative examples for businesses to follow.
The TFTC noted that preliminary results from the public consultation indicate that generative AI encompasses the characteristics of the digital economy industry described in the TFTC’s previously published White Paper on Competition Policy in the Digital Economy (the “White Paper”). Therefore, regarding generative AI, the TFTC will continue to follow the enforcement recommendations set forth in the White Paper, adopting the four core principles of “issue-driven,” “local nexus,” “contestability,” and “rule of reason” as the core direction and stance for enforcement at this stage.
1. Identifying Issues, Establishing Theories of Competitive Harm, and Refining Evidence Analysis
The TFTC emphasizes that it will adhere to an “issue-driven” enforcement principle in the future, first defining the scope of the dispute and concentrating enforcement resources on issues that genuinely involve market competition and can be effectively addressed through enforcing the Taiwan Fair Trade Act. Once a dispute is identified as falling within the scope of the Taiwan Fair Trade Act, and given the current diversity of theories regarding anti-competition practices in generative AI, the TFTC will further clarify which “theories of competitive harm” apply when assessing whether a certain anti-competition practices violate the Taiwan Fair Trade Act.
2. Recognizing Differences in Industrial Development Across Countries and Emphasizing “Local Nexus” Principle of Enforcement
Second, the regulatory intensity of competition law regarding generative AI varies among countries. The TFTC believes that while the experiences of competition authorities in other jurisdictions can serve as a reference, Taiwan differs from other countries in terms of its AI industry structure and competitive strengths and weaknesses. Therefore, enforcement should be tailored to local conditions. Rather than replicating foreign models wholesale, enforcement strategies must be developed that are locally appropriate by integrating Taiwan’s market characteristics.
3. Maintaining the Position of Focusing Enforcement on Market “Contestability”
Taking into account the highly dynamic nature of the market, as well as the overwhelming public comments that competition authorities should avoid excessive intervention so as not to stifle innovation, the TFTC believes that continuing to apply the principle of market “contestability” outlined in the White Paper remains the most appropriate enforcement stance at this stage. In other words, by maintaining the countervailing power of potential competitors outside the market to ensure that enterprises within the market do not abuse their dominant positions to restrict competition, it is possible to simultaneously safeguard fair competition and promote innovation in an environment where AI technology is rapidly evolving.
4. Strengthening Competition Review Under the “Rule of Reason”
The TFTC noted that, adhering to the principles of “issue-oriented” and “evidence-oriented” approaches, it will use the “rule of reason” as the analytical foundation to conduct competition reviews by weighing the potential positive and negative effects of specific conducts on market competition.
Finally, the TFTC emphasizes that this report and policy statement are issued in light of current industrial development and market competition conditions. In the future, facing potential anti-competition issues arising from rapid changes in the AI industry, the TFTC will adjust its enforcement strategies as appropriate and prudently adopt suitable measures to properly address specific competition concerns, ensuring that market competition and the innovative momentum of the AI industry proceed hand in hand and complement one another.
Lee and Li’s Competition and Antitrust practice group has extensive experience in advising clients on competition and antitrust matters. Should you have any questions or require consultation regarding this report, please do not hesitate to contact our team of experts.