Antitrust /Anticorruption

Antitrust /Anticorruption Compliance Overview & Practical Guidelines Kristina. Wang Legal Office BenQ Corporation 4.11.2013

Antitrust Compliance:Overview & Practical Guidelines

Our Commitment to Antitrust Compliance Antitrust law is intended to promote and protect competition and to protect consumers. It prohibits certain anticompetitive activities, and more generally those which are deemed to unreasonably restrain trade. Violations may result in heavy fines for Company, and, under United States’ law (and various other countries’ law, including Japan, China, the U.K., Canada and etc) in fines or imprisonment for individuals. OurCommitment: Company shall be committed to full compliance with all laws and regulations, including strict compliance with both Taiwanese and foreign antitrust laws.

Prohibited Conduct: Agreements with competitors: • regarding price, production, or other terms of sale; • to allocate customers or markets; • to engage in bid-rigging. Agreements with suppliers regarding pricing to customers Agreements with customers not to deal with a competitor Price discrimination; Monopolistic actions such as predatory pricing, price discrimination, or tying

Practical Guidance: Dos and Don’ts DO: Consult the legal department before having discussions with competitors Protest discussions that appear to violate antitrust laws; disassociate from such discussions, and, if necessary, remove yourself from situations that present concerns Report improper conduct by Company employees, customers, or competitors to the legal department Remember notes, memos or emails may be taken out of context and used against you or Company in a lawsuit

Practical Guidance: Dos and Don’ts DO: If you have contact with competitors: • Before the contact, prepare a written agenda to discuss with the legal department and distribute to the competitors • Have counsel involved in the actual contact where antitrust issues may arise • Take accurate notes (without conclusions or conjectures) • Have counsel review any notes before they are finalized and circulated Avoid social interactions with competitors.

Practical Guidance: Dos and Don’ts DO NOT: Without prior approval by counsel, discuss with competitors: • prices, production, costs, discounts, terms of sale, profit margins, etc. • allocating markets, customers, or territories • whether or not to deal with any other company • sensitive information concerning Company or another competitor Use language (or gestures) that might convey agreement, consent or consensus with competitors (such as “mutual understanding”, “consensus”, “cooperation” and “collaboration”)

Practical Guidance: Dos and Don’ts DO NOT: Make comments or conclusions in meeting documents or records (stick to the facts) Use “power” words (such as dominance, market power, cartel, etc.) Create documents or records that might be misinterpreted to suggest that Company condones or is involved in anticompetitive conduct

Conclusion The consequences of not taking antitrustlaw seriously can be detrimental not onlyto Company, but also to you, yourreputation, and your career. Always contact the legal department if you haveany questions or concerns regarding competition or compliance issues

Anticorruption Compliance:Overview & Practical Guidelines

Our Commitment to Compliance with Anti-Corruption Laws Company shall conduct its business in an above-board manner, and it does not seek any improper influence, nor will it tolerate even the appearance of improper influence. All Company employees and anyone authorized to do business on behalf of Company anywhere in the world must do so ethically and in accordance with Taiwanese and foreign anti-corruption laws including, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.

Cases In 2008, Siemens AG pleaded guilty and agreed to pay $800 million. Siemens also agreed to pay an additional $856 million to settle related charges in Germany. IBM agreed to pay a $2 million civil penalty, disgorge $5.3 million in ill gotten profits and $2.7 million in prejudgment interest. J&J agreed to settle the SEC’s charges by paying more than $48.6 million in disgorgement and prejudgment interest. J&J also agreed to pay a $21.4 million fine to settle parallel criminal charges announced by the U.S. Department of Justice.

FCPA Penalties Criminal as well as civil liability: Business entities subject to fines up to $2 million; employees subject to fines up to $100,000 and imprisonment for up to 5 years. Other Consequences: • may be barred from doing business with the government (indictment alone can lead to suspension of the right to do business) • may be ineligible to receive export licenses • a competitor might bring a lawsuit under Racketeer Influenced and Corrupt Organizations Act by a alleging that bribery caused the defendant to win a foreign contract.

Practical Guidelines: Red Flags Consult the legal department if you experience any of these red flags: • You’re told bribery is a “way of doing business” in the country • A foreign official pushes you to do business with a particular company or person • A foreign official or other third party requests a favor in exchange for doing business with Company • A third party suggests political or charitable contributions to influence official action • You are suspicious of a third party’s reputation • A third party has a family, personal, or business relationship with a foreign official • The payment requested is more than one would expect for the services • An unusual method of payment is suggested (payment in cash, payment through a third party, or payment in a third country) • Expenses and accounting records lack transparency • A third party does not have the proper experience for the services being offered

Practical Guidance: Dos and Don’ts DO: Remember that in the U.K. bribery prohibitions apply to private businessmen as well as foreign officials. Consider that it may not always be clear whether a particular person is a foreign official Require third parties to disclose, upon demand: • the identity of persons acting on their behalf in connection with a transaction • the amount and purpose of commissions or fees paid. Avoid “facilitating payments” whenever possible (NOT allowed in the U.K.) Obtain prior written approval from the legal department before making a “facilitating payment” make accurate records of the payment and its purpose, and give a copy to the legal department

Practical Guidance: Dos and Don’ts DO: Ensure that any “business courtesy” given to anythird party adheres toall of the following criteria: • Given openly, without a motive to influence the recipient and without an expected favor or action in return • Not prohibited by the laws and regulations of the foreign official’s country, including internal policies of the foreign official’s government or organization • Consistent with obligations or representations made in any contract between Company and the recipient • Reasonable in nature and amount as measured individually and combined with other business courtesies provided to the foreign official or his organization in the calendar year, and under U.S. standards and those of the official’s country

Practical Guidance: Dos and Don’ts DO: Have Company employees providing a “business courtesy” participate in related meals, activities, or travels Accurately record all expenses related to a “business courtesy” and provide adequate documentation Make sure that agents, consultants, or intermediaries doing business on Company’s behalf are aware of the need to comply with the anti-corruption laws Consult with the legal department regarding any uncertainties or troubling situations Report any improper conduct by Company’s employees or any third party to the legal department

Practical Guidance: Dos and Don’ts DO NOT: Provide a “business courtesy” if there is not a business justification the “business courtesy,” such as product demonstrations or meetings, or performance of a contractual obligation Make cash payments to foreign officials or other third parties Reimburse expenses for a foreign official’s or a third party’s family members or friends Engage in extravagant entertainment with foreign officials or business men Allow an intermediary to make a corrupt payment directly or indirectly to bribe a foreign official or any other third party

Conclusion Always contact the legal department if you have any questions or concerns regarding compliance with the anti-corruption laws

Antitrust /Anticorruption