TIPS^®  Taiwan Intellectual Property Special

FTC agreed on Settlement with Microsoft Taiwan

Regarding whether Microsoft Taiwan has engaged in violation of Fair Trade Law, the Fair Trade Commission (FTC) in Taiwan decided on Oct 31, 2002 to accept Microsoft Taiwan Corporation's proposal to start a settlement process under certain conditions.

This case concerns the fact that Microsoft has been accused of setting its domestic prices of software-related products at relatively higher levels than those in other countries and of forcing the sale of multiple software products by inadequately bundling them together. Because of the complexity of this case, the FTC is still unable to not fully ascertain that Microsoft has been in violation of the Fair Trade Law after a six-month investigation. Therefore, in accordance with Article 136 of the Administration Procedure Law, the FTC shall allow Microsoft to initiate a settlement process in lieu of the enforcement of an administrative penalty, in order to achieve its administrative goals effectively.

The FTC indicated that the settlement will be handled under the Fair Trade Law, Administrative Procedure Law and the principles of handing settlements of the FTC as following:

1. The settlement shall be handled in compliance with public interest;

2. The settlement should be concluded in writing within a prescribed period after the settlement process has begun;

3. The FTC has the right to revoke the settlement contract and to resume the investigation if necessary;

4. The terms, conditions, and other contents of the settlement should be kept confidential;

5. The settlement should comply with proper legal requirement;

6. Once the settlement is concluded, the performance should be supervised by an superintending group of the FTC; and

7. If Microsoft Taiwan violates or fails to perform the settlement contract, the FTC has the right to revoke the settlement contract and to restart the investigation.

In addition to the acceptance of the aforementioned settlement process, the FTC also reached the following three conclusions:

1. Microsoft Taiwan Corporation must handle the settlement contract in detail delineating the rationale and the settlement conditions to the FTC within 30 days after receipt of the FTC's official notice on the settlement issue;

2. The settlement contract must be disclosed to the public except for that part or those parts that must remain confidential owing to legal requirements. The FTC has the right to revoke the settlement contract and to restart the investigation if Microsoft and its relevant businesses fail to comply with these disclosure terms; and

3. The settlement entities must include all Microsoft businesses related to the settlement conditions.