Our thinking

Strategies for protecting Taiwanese businesses from cross-border risks

What's inside

Current approaches for managing global growth

Executive summary

Managing efficient global growth requires Taiwanese corporate leaders to make a series of strategic decisions. Understanding key legal developments worldwide can help you plan your company's next steps.

For technology companies focused on cross-border growth and expansion, vital issues often include defending business innovations that you invested time and money to develop and avoiding problems with global regulatory authorities.

We have chosen topics for this publication to reflect key changes in multiple jurisdictions that offer new opportunities for Taiwanese businesses, along with updated guidance on how to manage potentially damaging legal issues.

Protecting your innovations has never been more important. Since the US market serves as a vital source of revenue for many Taiwanese businesses, this makes it critical to understand how the patent system is evolving in the United States. "A patent system at an inflection point: Start of a new era at the USPTO" reviews how changing rules may create stronger patent rights in the US and affect patent litigation strategies for Taiwanese companies. "Using US trade secret litigation to protect your business innovations" explains how the 2016 US Defend Trade Secrets Act and trade remedies at the US International Trade Commission can provide powerful remedies to help Taiwanese companies with business in the US protect their proprietary information.

As any company's business grows globally, inevitably the company becomes subject to regulatory oversight and litigation in a variety of countries for anti-corruption, antitrust and many other aspects of its business operations. "How to manage multijurisdictional compliance investigations" shows practical steps that Taiwanese businesses operating in a global context can take to conduct complex compliance investigations in multiple jurisdictions effectively. "Seeking amnesty internationally for cartel allegations" discusses whether, when and how Taiwanese corporations should request leniency from government prosecutors for potential antitrust violations and cartel conduct allegations. "European Commission fines for resale price maintenance in e-commerce" describes the risks for Taiwanese businesses when imposing fixed or minimum resale prices on distributors in Europe. Finally, "Trends in international arbitration for Taiwanese companies" highlights several results from a 2018 White & Case survey for Taiwanese companies interested in international arbitration as a dispute resolution mechanism.

We look forward to discussing these and other issues with you.

A patent system at an inflection point: Start of a new era at the USPTO

Changing rules may start moving the pendulum toward stronger patent rights and affect patent litigation strategies for Taiwanese companies

Woman usng Virtual Reality technology

Using US trade secret litigation to protect your business innovations

Powerful US remedies can help protect valuable proprietary information, even if your business is headquartered in Taiwan


How to manage multijurisdictional compliance investigations

Taiwanese businesses operating in a global context need strong mechanisms to investigate and manage potential cross-border misconduct

server room

Seeking amnesty internationally for cartel allegations

Whether, when and how Taiwanese corporations should request regulatory leniency for potential antitrust violations

Cryptocurrency Mining Machine

European Commission fines for resale price maintenance in e-commerce

The risks for Taiwanese businesses when imposing fixed or minimum resale prices on distributors

large distribution warehouse

Trends in international arbitration for Taiwanese companies

Highlights from White & Case's recent survey results

manufacturing equipment

Seeking amnesty internationally for cartel allegations

Whether, when and how Taiwanese corporations should request regulatory leniency for potential antitrust violations

4 min read

The Taiwan Fair Trade Commission (TFTC)'s recent investigation into possible toilet paper price-fixing and recent global fines and litigation arising from alleged antitrust violations are reminders that company growth and success also bring potential legal pitfalls. Allegations of cartel conduct in particular can pose significant problems for international corporations.

Taiwanese companies face potential scrutiny not only domestically, but also globally. In 2016 – 2017, competition authorities globally collected fines totaling more than US$12 billion for cartel violations. Each year, we see new record fines. Thus far in 2018, Singapore, Australia and Egypt have issued their largest fines ever against companies alleged to have participated in a variety of industry cartels.

For in-house and outside counsel, uncovering and responding to alleged cartel violations is a complex task. Where matters entail an allegation of price-fixing and other "hard-core" antitrust conduct, the risks increase exponentially, but also invite the possibility of leniency from government prosecutors.

The best means of limiting your antitrust exposure is to develop a robust, effective internal compliance program.


The leniency option

Leniency (sometimes called amnesty) programs have become global mainstays in antitrust enforcement regimes. These programs allow corporations with knowledge of criminal cartel activity to apply and cooperate with regulators in exchange for a complete exemption, or sometimes reduced exposure, from administrative fines or criminal penalties.

Historically, Taiwanese companies have been the targets of leniency programs, rather than their beneficiaries. However, understanding both how and when to seek out global leniency programs offered by competition authorities is vital to any effective mitigation of antitrust risks and antitrust compliance.

Deciding whether your company should pursue leniency involves analyzing the potential risks and benefits related to specific, individualized considerations about the company, its industry and the facts at issue. An effective strategy should consider multiple jurisdictions worldwide, with the expectation, for example, that the TFTC will itself coordinate with foreign enforcement agencies.


When to request leniency

Whether a regulator will grant leniency often depends on a variety of factors, including the applicant's timing relative to other alleged cartel members, the nature of the conduct, role of the applicant in the conduct, the nature and materiality of information the applicant possesses about the conduct of other cartel members, and other considerations.

Assessing these and other issues is critical to deciding whether to address the issues internally or proceed with an amnesty application.

In-house counsel are the first line of defense to uncovering cartel activity. Obtaining information as quickly and efficiently as possible allows you to work with the necessary parties to analyze the issues and potential exposure and to consider any leniency options.

Your company's timing is crucial. In jurisdictions like the United States, amnesty is only available to the first-in-time applicant. In other jurisdictions, such as Taiwan and throughout Asia and Europe, regulators will reduce fines and mitigate criminal penalties for second, third and sometimes even fourth applicants.

However, amnesty is not for every company or every potential violation.


Is leniency the best option?

Almost inevitably, one government agency's investigation will give rise to other jurisdictions investigating— and potentially to civil litigation. These are important considerations in any decision about whether your company should seek amnesty. The nuances and distinctions among different jurisdictions' substantive law and procedural rules will affect your company's opportunities to defend itself against alleged violations.

So, you should carefully coordinate any amnesty effort across all relevant jurisdictions to maximize the benefits and limit potential penalties for your corporation.

Taiwan is not party to the Hague Evidence Convention, adding a further consideration when assessing leniency. Jurisdictional limits on discovery affect how foreign enforcers and civil plaintiffs obtain discovery from Taiwan companies. Thus, evidence held by Taiwanese entities may more complicated to obtain, but is by no means out of reach from international regulators.

Another essential concern with any amnesty application is whether regulators may uncover multiple conspiracies within your industry. From freight and airline fees to auto parts and technology, regulators have been relentless in leveraging pleas from purported cartel members to launch new investigations and root out perceived anti-competitive conduct.

The US, for example, achieved so much success utilizing cartel members' information to investigate other corporate wrongdoing that it launched an Amnesty Plus program. This program allows cartel members during plea negotiations to offer information on a separate conspiracy, obtain amnesty from participation in that conspiracy and reduce their fines in the current investigation. While this can create perverse incentives to mischaracterize facts and suggest a second conspiracy where there is none or only weak evidence of one, it also illustrates why a thorough internal investigation can pay dividends when pursuing an amnesty application.

As with all antitrust issues, the best means of limiting your exposure and positioning your company to take advantage of global amnesty programs is to develop a robust and effective internal compliance program that will both limit the likelihood of cartel liability and catch potential cartel violations quickly.

In today's enforcement landscape, managing information flow and encouraging internal reporting allows in-house counsel to identify potential exposure to cartel activity early, respond strategically and effectively, and limit a company's ultimate liability.

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2018 White & Case LLP