3. What is the meaning of the “justifiable reasons” stated in the proviso set forth in Paragraph 1 of Article 19 of the Fair Trade Act? Who is responsible for providing the evidence?
According to Article 25 of the Enforcement Rules of the Fair Trade Act, “The just cause stated in the proviso clause of Paragraph 1 of Article 19 of the Act shall be determined by the competent authority on the basis of the evidence presented by participating enterprises and taking into account the following factors: 1) Encouragement of downstream enterprises to enhance efficiency or quality of pre-sale service: 2) Prevention of free-riding effects; 3) Promotion of entries of new businesses or brands; 4) Stimulation of competition between brands; 5) Other reasonable economic grounds concerning competition.” Therefore, enterprises are required to provide justifiable reasons for the resale price restrictions they impose to be evaluated by the competent authority. In other words, enterprises accused of imposing resale price restrictions are required to present evidence that such practices are justifiable and the competent authority will then assess such evidence to determine whether the practices in question comply with the proviso in Paragraph 1 of Article 19 of the Fair Trade Act.
Relevant article(s) of law: Fair Trade Act, Article 19
Updated at：2016-02-22 11:49:52