Taiwan considers legalizing corporate joint moves on R&D

Dec 30, 2003 Ι Industry In-Focus Ι Furniture Ι By Ken, CENS
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Taipei, Dec. 30, 2003 (CENS)--The Cabinet-level Fair Trade Commission mulls legalizing corporate joint moves on technique research and development so that domestic enterprises can boost competitive edge by easing individual R&D cost burden, according to commission chairperson Huang Tzong-leh.

For a long time, the Fair Trade Act has regulated joint corporate R&D moves as an illegal monopoly practice. Recently, the commission has held a positive view about the joint R&D move considering that development of a crucial technique is usually a huge financial burden to any individual enterprise. Also, the commission, Huang said, will shorten its review time on joint R&D plans as soon as they are identified by regulating organizations as key techniques of their industries.

However, Huang emphasized that the regulation relaxation will not include joint marketing and pricing of their joint R&D accomplishments.

Huang said his commission had revised the act to legalize joint R&D moves and would submit the revisions to the Executive Yuan for approval in February next year at the earliest.

Huang noted that his commission always executes the act based on the "prohibition in principle, permission for exception" philosophy and the move to legalize joint R&D practice is a case fulfilling the philosophy. Article 14 of the act exceptionally permits enterprises to apply with the commission for joint work on product quality improvement and trade efficiency enhancement when such joint moves are considered to be helpful to Taiwan's economic interest as a whole.

So far, domestic grease and flour manufacturers have jointly imported corn and wheat according to this article to reduce procurement costs, which can be expensive to them if they import individually.

In a separate case, the commission also considered adding an "punishment immunity article" to the act to encourage enterprises engaged in illegal joint practices to surrender to his organization and disclose their wrongdoing details to investigators. The immunity article is drafted for enterprises compelled to committing crimes.

A senior commission official pointed out that many enterprises in many monopoly cases were found compelled to join the crimes by masterminded enterprises.

The commission has punished 179 cases so far this year, with a total fine of NT$468 million (US$13.7 million at US$1:NT$34). These cases included a joint price hike of canned gas by 30 suppliers in northern Taiwan.
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