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Fair Trade Commission Guidelines on Trade Practices Between Department Stores and Branded Products Suppliers | Guidelines |
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Passes by the 675th Commissioners' Meeting of October 14, 2004
Circulated by Letter Kung Yi Tzu Ti No. 0930007932 of October 21, 2004
1. Purpose
The Principles are specially adopted to ensure full and accurate disclosure of important dealing information related to the department stores and outlet stores, to ensure fair and reasonable business activities in order to protect dealing order and promote fair competition.
2. Definitions
“Department store” mentioned in the Principles refers to selling area that is more than 3000 square meter (3000㎡), selling diverse products, composed of both outlet stores and independent outlet stores, selling products in departments with one organization responsible for operational management, providing a single packaging format, and a single unified cash register system, with only one type of receipt.
“Outlet store” mentioned in the Principles refers to business, under the management and supervision of the department stores which assign sales personnel and pay the salaries, sell their products within the department stores and use the receipt issued by the department stores.
3. Restricting competition or impeding fair competition
The department stores conducted one of the following behaviors would be considered as restricting competition or impeding fair competition:
(1) Threatening or using illegal methods to force outlet stores, avoiding to be removed, to stop dealing with other enterprises in an attempt to exclude its competition.
(2) Threatening or using illegal methods to restrict the business area of the outlet stores, blocking other enterprises to compete with.
4. Deceptive or obliviously unfair conduct
When the department stores exhibit one of the following behaviors, it is considered acting deceptive or obliviously unfair conduct:
(1) Standards for discontinuation of contract
Contracts entered into between by the outlet stores and department stores do not have contract discontinuation standards.
(2) Adjustment of selling location
The department stores failed to disclose or set the standards or shifting or changing the selling location or size of outlet stores in advance of the need of shifting or changing the selling location or size of outlet stores and there are no relevant standards for location changes.
(3) Subsidiary fees of promotion
The department stores hold various promotion activities with the sponsorship of the outlet stores, but fail to reveal the standards regarding the collection of sponsorship subsidies and corresponding ratios.
(4) Share of operational revenues
There are no standards regarding the calculation method of percentage share for discounted products for goods sold by the outlet stores.
(5) Consumer credit card charges
An agreement has not been reached between the credit card company and the outlet stores regarding handling charges.
(6) Interior decoration items
No agreement has been reached between the outlet stores and the department stores regarding the identity of subcontractor and standards for collection of interior decorating charges, in the event that outlet stores are stall setup and decoration is outsourced by the department stores.
(7) Disclosure of information
Business information regarding the aforementioned six regulations has not been communicated with the outlet stores, written clearly and fully disclosed.
5. Additional rules
Transactions that are not mentioned in the Principles shall be considered with reference to the contexts of the individual case in accordance with provisions of the Fair Trade Law.
6. Legal Consequences
Transactions between the department stores and the outlet stores violated Points 3 and 4 of the Principles harm the trading orders which shall be deemed as a violation of Paragraphs 1 and 6 of Article 19 and Article 24 of the Fair Trade Law.
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(Last Modified：2005/12/10 15:18:19 )
