The Committee appreciates the government’s ongoing efforts to address the evolving challenges of the digital economy. However, several cross-cutting issues now require more urgent and coordinated action. In particular, the absence of a unified legal framework governing online content moderation has led to overlapping and inconsistent guidance across agencies. This fragmentation has created significant uncertainty for digital platforms, resulting in over-censorship and unintended constraints on democratic discourse and innovation. At the same time, the growing number of government requests for user data without clear legal safeguards or transparent processes raises serious concerns regarding privacy, due process, and human rights. Without urgent regulatory modernization, Taiwan risks regulatory fragmentation that threatens both its democratic credibility and economic competitiveness in the digital age.

To ensure Taiwan remains competitive in the global digital economy, the Committee urges the government to establish a clear and harmonized legal framework for online content governance, including transparent standards for data requests and user rights protections. In parallel, the government should accelerate policy development and financial incentives to support edge AI deployment, particularly by empowering local developers and SMEs to participate in next-generation AI innovation. Finally, the creation of a universal, cross-sectoral regulatory sandbox is essential to enabling agile policy experimentation and promoting responsible innovation across emerging technologies. Taken together, these actions will help preserve Taiwan’s democratic values while strengthening its position as a global digital leader.

Suggestion 1: Establish clear intermediary liability frameworks to strengthen Taiwan’s digital economy.

The Committee is concerned that inconsistent regulatory approaches to online content are undermining Taiwan’s digital development. Despite past recommendations for clear safe harbor principles, no meaningful progress has been made. In fact, the trend toward regulatory fragmentation appears to have continued, further complicating the operating environment. Agencies continue to issue disparate rules and require proactive content monitoring, creating legal uncertainty and undue burdens.

This lack of clarity hinders digital platforms’ ability to operate effectively in Taiwan and poses risks to democratic principles such as freedom of expression, due process, and participatory digital governance. It also dampens innovation, investment, and growth in Taiwan’s digital economy. The Committee urges the Executive Yuan to establish comprehensive and harmonized intermediary liability guidelines that align with international standards. These should balance the protection of online safety with the preservation of free expression and support for economic development.

A notable example of regulatory overreach is the Ministry of Health and Welfare’s (MOHW) enforcement of the Tobacco Hazards Prevention Act. The MOHW has adopted an expansive definition of “advertising” to include user-generated content, imposed penalties despite platforms’ compliance efforts, and required keyword filtering that amounts to pre-screening. Of particular concern is the MOHW’s proposed legislative amendment that would mandate proactive monitoring of online content, an approach that conflicts with global best practices and undermines Taiwan’s commitment to internet freedom. These developments have occurred without adequate cross-agency coordination or engagement with affected stakeholders, raising concerns about regulatory transparency and fairness.

To promote a healthy and innovation-friendly digital ecosystem, the Committee reiterates the importance of adopting clear safe harbor provisions specified below. By aligning its regulatory framework with democratic norms and global best practices, such as those outlined in the Manila Principles, Taiwan can safeguard free expression, foster innovation, and enhance its international standing as a leader in digital rights and governance.

1. Establish overarching guidelines. The Committee calls on the National Communications Commission (NCC) and the Ministry of Digital Affairs (MODA) to develop, under the Executive Yuan’s guidance, cross-agency intermediary liability and safe harbor rules based on international norms like the Manila Principles. The rules can be established as formal administrative guidelines or regulations, intended to act as the immediate interpretive standard for existing laws. Furthermore, they should inform and guide any targeted legislative proposals should such become necessary.
2. Adhere to core principles. Ensure that the developed rules, which would apply to all relevant laws regulating online content, are based on the following core principles:
   a.)    Encourage Good Samaritan actions. Platforms that conduct reasonable, voluntary content moderation should be protected.
   b.)    Promote “notice-and-takedown” practices. This mechanism should serve as the primary method for handling illegal user-generated content (UGC), with clear notice rules and prompt platform action.
   c.)    Distinguish commercial content from UGC. UGC generally should not be pre-screened but should instead be taken down after due notice. Such an approach allows enforcement efforts to focus on illegal commercial activity while still safeguarding user expression.
   d.)    Oppose general monitoring obligations. Universal UGC monitoring or pre-screening is impractical and greatly hurts free speech and communication secrecy. Further, universal UGC monitoring damages Taiwan’s democratic standing, contravenes international practice, and creates non-tariff barriers for cross-border services.
   e.)    Acknowledge service diversity. Rules should be tailored to different types of internet services, such as search and indexing, hosting, and interpersonal communication, to avoid inflexible, one-size-fits-all approaches.
   f.)     Ensure government transparency. Due process, transparency, and accountability should be required when government agencies request content removal or user data.
   g.)    Draw on prior frameworks. Valuable principles from the NCC’s draft Digital Intermediary Services Act, such as safe harbor and Good Samaritan clauses, can serve as illustrative examples for future policymaking.
3. Implement central oversight for cross-ministry adherence. An Executive Yuan-led monitoring mechanism, facilitated by the NCC and MODA, should be established to actively ensure that all relevant government ministries consistently apply overarching intermediary liability guidelines when developing new regulations and enforcing laws concerning online platforms. A clear, principles-based, and harmonized intermediary liability framework led by the Executive Yuan is essential for giving businesses the legal certainty they need to take effective action against illegal content while safeguarding free expression.

Suggestion 2: Establish clear guidelines and safeguards for government requests for user data.

The Committee stresses the challenges faced by digital service businesses operating in Taiwan due to increasing and unfettered government requests for user data in the name of administrative investigation. The lack of a clear and precisely defined legal framework, coupled with inadequate understanding of technical capabilities and potential conflicts with international laws, creates uncertainty for international digital service providers.

This growing trend of government surveillance undermines trust in the digital economy and raises serious concerns about human rights and individual freedoms. The absence of due process and rights to appeal by both data subjects and digital services providers exacerbates these concerns.

1. Develop and publish a clear and comprehensive regulatory framework. A clear regulatory framework should be established to manage government requests for user data, outlining specific procedures and criteria for such requests. This framework should protect the right to privacy and self-determination over personal data. Current laws, like the Personal Data Protection Act and provisions scattered across different administrative laws, are insufficient. The framework should adopt international best practices, such as requiring valid legal processes (including court orders for certain types of data disclosure), scrutinizing requests for legality and scope, and challenging overly broad or unclear requests, as seen in the Stored Communications Act and relevant global data protection regulations.
2. Provide training and education for government officials in the technical capabilities and limitations of digital service providers. Key aspects to be included are the need to respect user privacy, an introduction to international best practices, and the fact that service providers may not possess certain data due to user deletion or retention policies.
3. Establish a centralized monitoring system to monitor government requests for user data. This system should ensure that requests are documented, reviewed, and approved by an independent authority. In the interest of transparency, it should also facilitate the issuance of regular reports detailing these requests by type and how they were handled.
4. Ensure formal and transparent request channels. Government requests for user data should be made through formal and transparent channels, using legally valid templates and citing specific laws and regulations, as well as the legal grounds for making such requests. This approach would be in line with international standards such as the U.S. Electronic Communications Privacy Act (ECPA) and Japan’s Guidelines for Protection of Personal Information in Telecommunications Business.
5. Introduce robust due process protections for data subjects and digital services providers, including the right to appeal and challenge government requests. Users should be notified about legal demands when appropriate, allowing them to seek legal recourse. Doing so ensures that potential misuse or overreach can be challenged, maintaining legal process integrity and protecting individual rights.
6. Eliminate the mandatory data retention period. Requirements that service providers retain data for a certain period of time for purposes of administrative investigation should be eliminated in existing laws and future regulations to prevent over-collection of user data and lower the risk of data breaches. By addressing these concerns and establishing a clear and predictable system for government requests for user data, Taiwan can promote a safe and trustworthy digital environment while also protecting the rights and interests of both businesses and individual users. Immediate action in this regard would help ensure that Taiwan remains a welcoming destination for investment.

Suggestion 3: Prioritize edge AI and provide incentives to developers and SMEs to accelerate AI deployment.

The Committee welcomes the government’s commitment to making Taiwan a global leader in artificial intelligence and preparing industries and society for widespread AI integration. As technological innovation drives the development of smaller, more efficient models, on-device AI inference (known as edge AI) has become increasingly viable. Unlike cloud-based AI, edge AI processes data locally on devices, improving speed and privacy and enabling scalable, cost-effective deployment across a wide array of devices, including smartphones, PCs, IoT equipment, XR platforms, and automotive applications. Edge AI offers significant advantages in latency reduction, data privacy, operational efficiency, and cost savings.

Moreover, edge AI presents unique opportunities for small and medium-sized enterprises (SMEs), which often lack the financial or technical resources to build and train large-scale models. With its globally competitive ICT industry and mature AI and PC ecosystems, Taiwan is ideally positioned to lead in the adoption and development of edge AI. To fully realize this potential, the Committee encourages the government to provide targeted policy support and incentives aimed at cultivating a developer ecosystem and accelerating industry-wide deployment, particularly for SMEs.

The Committee commends the AI talent cultivation and industry development programs initiated by the Ministry of Economic Affairs (MOEA) and the Ministry of Digital Affairs (MODA), which have laid a strong foundation for AI readiness across sectors. To sustain and expand these efforts, we respectfully offer the following policy recommendations:

1. Integrate hybrid and edge AI into government AI training programs. Both the MOEA and MODA are actively advancing AI ecosystem development through training courses and community-building initiatives. We recommend that these programs be further strengthened by:
   • Consolidating cross-ministerial AI training plans under a centralized platform or task force led by the Executive Yuan to ensure coherence and efficiency.
   • Incorporating dedicated modules on hybrid and edge AI, with a focus on the practical application of small-scale, high-performance models for on-device inference.
   • Partnering with international technology leaders to make advanced developer tools and up-to-date training resources widely accessible.
   • Regularly updating training content to reflect the evolving AI landscape, including sector-specific use cases that demonstrate the economic and operational benefits of edge deployment.
2. Provide targeted incentives to promote AI adoption among SMEs. To support broader AI integration, particularly among smaller enterprises, the Committee encourages the introduction of tailored incentive mechanisms, such as:

• • Financial support (including subsidies, matching grants, or tax deductions) for AI hardware and software acquisition, development, and deployment.
  • Non-financial support (including technical mentorship, developer matchmaking, regulatory guidance, and pilot program participation) to reduce adoption barriers.
  • Sector-based incentive programs that align with national economic priorities and drive AI innovation in key verticals, such as manufacturing, logistics, healthcare, and education.

As AI deployment continues to evolve, driven by lower training costs, faster inference, and an increasing emphasis on edge computing, the Committee urges the government to adapt its strategy to ensure that Taiwan’s digital economy remains agile, inclusive, and competitive. By enabling SMEs and developers to access the tools, knowledge, and support they need, Taiwan can unlock the full potential of edge AI and establish itself as a global leader in next-generation AI applications.

Suggestion 4: Establish a universal regulatory sandbox for innovation in Taiwan.

Taiwan’s long-standing leadership in technology and innovation has positioned it as a critical hub in the global digital economy. However, the absence of cross-sectoral mechanisms for policy experimentation poses growing challenges for businesses attempting to deploy emerging technologies. While targeted regulatory sandboxes in areas such as fintech and autonomous vehicles have delivered tangible benefits, no comparable frameworks currently exist for other high-potential sectors, including healthcare, tourism, transportation, and smart cities.

Without structured pathways for real-world testing and regulatory engagement, businesses face persistent legal uncertainty. This inhibits investment, discourages digital transformation, and limits Taiwan’s ability to remain competitive in fast-evolving sectors, particularly as the global adoption of AI and other next-generation technologies accelerates.

To address this gap, the Committee recommends the establishment of a universal regulatory sandbox that enables controlled experimentation across all industries. This initiative would provide a transparent, time-bound environment in which companies can pilot novel technologies while regulators evaluate their risks and benefits. A well-designed sandbox should balance policy flexibility with public interest protections, enabling innovation to proceed safely and effectively.

1. Appoint the National Development Council (NDC) as the lead coordinating agency. To ensure cross-ministerial alignment, the NDC should serve as the central coordinating body for the universal sandbox framework. This role would help facilitate collaboration among regulatory agencies and minimize the risk of fragmented or contradictory policies across different sectors. The Committee further recommends that the NDC serve as a central point of contact for foreign-invested enterprises seeking participation, reinforcing Taiwan’s openness to international innovation.
2. Develop a clear, business-friendly testing framework. The sandbox should offer defined timelines, transparent eligibility criteria, and clearly articulated conditions under which participating firms may test their products or services. The framework should be adaptable to varying risk profiles and technology maturity levels while ensuring that regulatory requirements are proportionate and innovation-enabling.
3. Ensure predictable pathways to full market entry. Technologies or solutions that demonstrate societal benefit and operational feasibility during the testing phase should be granted an efficient and predictable route toward formal regulatory approval. The transition out of the sandbox must be structured to reward responsible innovation and minimize regulatory uncertainty following pilot completion.
4. Use sandbox outcomes to inform broader regulatory reform. Lessons learned from sandbox trials should be systematically incorporated into broader policymaking processes. This data-driven approach will help modernize Taiwan’s regulatory environment in a way that reflects real-world applications rather than theoretical concerns, aligning oversight mechanisms with emerging trends in AI, data use, digital platforms, and sustainability.

A universal regulatory sandbox would not only strengthen Taiwan’s global competitiveness but also reinforce its reputation as a forward-looking, innovation-driven economy. The Committee stands ready to support the government in designing and operationalizing this framework to ensure it delivers tangible outcomes for businesses, regulators, and society at large.