FTC Plans to Amend the Law to Replace the Threshold of One Third of Shares for an Application for Enterprise Merger with Board Meeting Seats as an Examination Basis.

According to the regulation of the current Fair Trade Law, an application shall be filed with the Fair Trade Commission (FTC) if a merger of the enterprise(s) exceed one third of shares. Vice Chairperson of the Fair Trade Commission, Chen Ji-Yuan (陳紀元) indicated on March 4 that the amount of shares is not a decisive factor of the ownership of decision-making right, and the number of seats of a board meeting is always the key factor instead. In this regard, FTC will deliberate on the policy that through law amendment or other methods, an application for a merger to be filed or not should depend on the actual “influence” in a merger case so that the relevant regulations concerning “merger” in the future will more correspond to the actual market conditions. Chen considered that the discussion about whether a merger will cause monopoly should take into consideration the characteristics of operation and the features of industry, instead of shareholding proportion alone. (2004.03)

CYJ/CCS