Merger Control 2019: Taiwan
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Merger Control 2019: Taiwan

Sponsored by

LCS & Partners
Taipei, Taiwan City Skyline

Margaret Huang and Victor Chang, LCS & Partners



The Fair Trade Act (FTA), which entered into force in 1992, is the main legislation governing Taiwanese merger control. Merger control is enforced by the Taiwan Fair Trade Commission (TFTC). The rules are moderately onerous as filing is mandatory in the event the applicable jurisdictional thresholds are met and closing must be suspended pending clearance.

Where any enterprises fail to comply with the rules, the TFTC may prohibit such merger, prescribe a period for the enterprises to split, to dispose of all or a part of the shares, to transfer a part of the operations or to remove certain persons from positions or make any other necessary dispositions. Further, an administrative fine of between NT$200,000 ($6,750) and NT$50 million may be imposed upon such enterprises.

On December 2 2016, the TFTC announced the introduction of a new sales revenue notification threshold for merger control: if the combined global turnover of the parties exceeds NT$40 billion and the Taiwan turnover of any two of the parties each exceeds NT$2 billion separately, a notification of such transaction will be required.

Also, the latest amendment to the FTA came into effect on June 16 2017. In the amendment, the review period of merger filings by the TFTC may be extended to 90 working days at most, and the TFTC is provided with the discretion to seek external opinion, and if necessary, appoint an academic research institution to conduct industrial economic analysis to supplement its review of the merger filing. In addition, the TFTC shall provide necessary merger filing information to the targeted enterprise in a hostile acquisition and consult with the targeted enterprise.


Under the FTA, the following business combinations (the subject of a review by the TFTC in Taiwan) are caught:

  • mergers;

  • an enterprise holding or acquiring the voting shares of or making capital contributions to another enterprise to an extent of more than one-third of the total voting shares or capital of such other enterprise;

  • an enterprise being assigned by or leasing from another enterprise the whole or the majority of the business or properties of such other enterprise;

  • an enterprise operating jointly with another enterprise on a regular basis or being entrusted by another enterprise to operate the latter's business; or

  • an enterprise directly or indirectly controlling the business operation or the appointment or discharge of personnel of another enterprise.

A transaction may require notification if one of the following market share thresholds and/or sales amount thresholds is met:

  • as a result of the business combination, the enterprise(s) will have one-third of the market share; or

  • one of the enterprises in the business combination has one-fourth of the market share; or

  • if the Taiwan turnover of one party exceeds NT$15 billion (NT$30 billion if the parties are financial institutions) and the Taiwan turnover of a second party exceeds NT$2 billion; or

  • if the combined global turnover of the parties exceeds NT$40 billion and the Taiwan turnover of any two of the parties each exceeds NT$2 billion separately.

The sales amount threshold is relatively clear. The market share, however, is difficult to calculate and may bring uncertainty about filing. The TFTC cannot investigate mergers falling below these thresholds.

Foreign-to-foreign mergers

Foreign-to-foreign mergers may be required to notify the TFTC if the transaction has a direct, actual and reasonably foreseeable impact on the Taiwan market. Factors such as the impact of the contemplated transaction on other jurisdictions as compared to Taiwan may be taken into consideration by the TFTC for determination.


If relevant thresholds are met, filing is mandatory and closing must be suspended pending clearance.

Where any enterprises fail to comply, the TFTC can either prohibit the merger; prescribe a period for the enterprises to split, dispose of all or part of the shares or transfer a part of the operations; oblige the parties to remove certain individuals from positions; or make any other necessary dispositions. Further, an administrative fine of between NT$200,000 and NT$50 million may be imposed on parties. Between 2008 and February 2019, there were 30 instances where the TFTC penalised parties for failing to make merger filings.

All participants are responsible for filing in mergers. This is also the case where an enterprise is assigned by or leases from another enterprise the operations or assets of another; or, where an enterprise regularly runs operations jointly with another, or is commissioned by another enterprise to run operations. The acquirer or the controlling enterprise is responsible for filing in cases where an enterprise either holds or acquires shares or capital contributions of another enterprise or directly or indirectly controls the business operations or the appointment or removal of personnel of another enterprise.

The TFTC does not require a filing fee. Although there is no legal deadline for a filing, a merger transaction must be suspended pending clearance.

Requirements for a filing include: the type and substance of the merger; basic data on each participant; an explanation of the benefits of the merger to the overall economy; any disadvantages relating to possible restraints on competition; any major future operating plans that the participants have; production and marketing statistics; and a review of upstream and downstream companies in competition with the merger parties.

Pre-notification contacts are not required under the FTA. Thus, there is no formal process at the pre-notification stage. Pre-notification contacts are available under the current practices in Taiwan. To confirm whether filing thresholds are met and a filing is required, merger parties tend to seek opinions from the TFTC in written or oral form prior to official filing. Upon receipt of such an inquiry, the TFTC may review the documents and descriptions provided, discuss with the merger parties and perhaps issue a formal written response regarding whether the filing threshold is met. However, recently the TFTC has been more reluctant to provide confirmation as to whether a filing is required prior to formal filing. Instead, the TFTC is more likely to suggest the merger participants carefully determine if the filing thresholds are met and a formal filing is required in accordance with the FTA.


Since the June 16 2017 amendment to the FTA, the TFTC has 30 working days from the receipt of a complete set of filing information to review a contemplated transaction.

In particular cases, such as where the total market share of the enterprises in a horizontal merger does not reach 20% of the market or where the total market share of the enterprises in a vertical merger does not reach 25% of each individual market, the TFTC can review the contemplated transaction under a simplified procedure. The TFTC will notify the filing parties of its procedure within 14 working days of the receipt of a complete set of filing information. If a simplified procedure is pursued, the review period can be halved in comparison to the ordinary review period.

The TFTC is able to extend the review period for another 60 working days on top of the ordinary 30-working day period as it deems necessary. Although there are no specific or determined steps or phases for the review process, any third party may challenge the proposed merger and provide their comments during the seven-day TFTC public opinion solicitation period, which generally happens at the beginning of the review period.

Substantive test

The test for clearance and relevant factors taken into consideration by the TFTC will differ based on the type of merger under review and whether it is a horizontal, vertical or conglomerate merger. The TFTC will normally look to factors such as: any significant concerns about the restraints on competition and the benefits of such a merger for the overall economy (including the impact on related upstream and downstream market and the impact on the market and on the participating enterprises if the combination is rejected).


The TFTC may attach conditions or require undertakings in any of the decisions it makes on filing cases. These are similar to remedies and are included in order to ensure that the overall economic benefit of the merger outweighs the disadvantages resulting from competition restraint.

In practice, the TFTC may give its conditional approval with a structural attachment (such as requiring the participants in a merger to dispose of its shares or properties) or behavioural attachment (such as requiring participants to give authorisation to non-participants in using their intellectual properties) that must be implemented at the effective date of such transaction. The TFTC may ask the advice of the merger parties about the conditions or undertakings required before making its decisions.


Under the FTA, the parties may be able to file for administrative litigation directly without going through administrative appeal within two months of the receipt of the merger control decisions. The typical time-frame for a decision in such appeals is generally around 1.5 years in a high administrative court.


On October 22 2018, the TFTC proposed a draft amendment that, if an enterprise fails to comply with the TFTC's order to rectify acts violating the merger control regulations, the TFTC may have the discretion to order further administrative fine from a minimum of NT$200,000 up to a maximum of NT$50 million.

The TFTC also proposed in the same draft amendment to suspend the current five-year statute of limitations since the TFTC commences the investigation against such enterprise that violates the merger control regulations. However, the total statute of limitations for penalty shall not exceed ten years since the occurrence of such illegal act.

To sum up, the draft amendment expands the discretion of the TFTC to choose the means of punishment, and provides the TFTC more time to investigate the violations.


Click on chart to enlarge

About the author



Margaret Huang

Partner, LCS & Partners

Taipei, Taiwan

T: +8862 2729 8000

F: +886 2 2722 6677



Margaret Huang is a partner at LCS & Partners and has extensive experience in antitrust law. She has handled merger notifications and waiver filings with the Fair Trade Commission for all of the firm's M&A transactions and has assisted several multinational clients in resolving their antitrust law issues in Taiwan. She has also been involved in amendments to Taiwan's Fair Trade Act. Margaret is a member of the Chinese Arbitration Association (CAA) and has published numerous articles regarding antitrust law issues in professional journals and newspapers.

About the author



Victor Chang

Partner, LCS & Partners

Taipei, Taiwan

T: +8862 2729 8000

F: +886 2 2722 6677



Victor Chang has extensive multi-jurisdiction transactional experience in M&A, private equity fund formations and cross-border transactions of all types, frequently involving parties from the US, Europe, Taiwan and China. Before joining LCS & Partners in 2003, Victor was deputy general counsel of Trader Classified Media, and also practised for seven years in Boston, Massachusetts with the law firm Testa Hurwitz & Thibeault.

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