The Taiwan Fair Trade Commission (hereinafter “the TFTC”) published the “Compilation Report on Public Comments and Policy Statement on Competition Law Issues Related to Generative Artificial Intelligence” on March 18, 2026. Having been compiled over approximately one year of deliberation following the launch of a public comment period in July 2025, the Policy Statement serves as an important guideline and standard for future competition law enforcement.
- Four Enforcement Principles
The TFTC has set forth the following four principles as the core direction and position for its current enforcement approach.
① Issue/Evidence-Driven: Enforcement resources are to be concentrated on issues that genuinely involve market competition, and blanket regulation without sufficient evidentiary basis will not be applied.
② Local Nexus: Enforcement will be conducted in accordance with Taiwan’s unique industrial structure, and foreign regulatory models will not be adopted wholesale. As Taiwan does not have large-scale platform operators such as Amazon or Google, the TFTC will focus more closely on monitoring competitive dynamics at the application layer rather than rivalry among global tech giants.
③ Contestability: Judgment will be made comprehensively, taking into account not only the current degree of market concentration but also the potential for future market entry by new competitors.
④ Rule of Reason: Judgment will be rendered after comprehensively weighing both the positive and negative effects that a given conduct may have on market competition.
- Practical Considerations for Businesses
① Contract Clauses Relating to Talent Mobility
It has been explicitly indicated that contracts restricting talent mobility — such as non-poaching clauses and non-compete obligations — may give rise to competition law concerns where they lead to the entrenchment of competitive conditions. In such cases, a review of employment contracts and service agreements is advisable.
② Cloud Services and Ecosystem Integration
Self-preferencing, vendor lock-in, and tying arrangements may all become subject to scrutiny. Businesses providing bundled AI services should exercise caution in the design of their contractual terms and conditions of trade.
For the time being, the TFTC has clearly stated that the existing framework of the Fair Trade Act is sufficient to address relevant competition concerns, and that no new legislation or amendments are planned.
- Outlook
The TFTC has indicated that it will adjust its enforcement strategy in a timely manner in response to the rapid changes in the AI industry, and will continue to monitor developments in international cooperation on competition law enforcement. While the Policy Statement reflects the current state of industrial development and market competition, businesses engaged in AI-related activities in Taiwan are advised to continue monitoring future developments.
