4. Are businesses in violation of the Fair Trade Act when they include stipulations on suggested prices in distribution contracts, print prices on products or attach price tags to products?
As set forth in Article 19 of the Fair Trade Act, “An enterprise shall not impose restrictions on resale prices of the goods supplied to its trading counterpart for resale to a third party or to such third party for making further resale. However, those with justifiable reasons are not subject to this limitation. The provision of the preceding paragraph shall apply mutatis mutandis to services provided by an enterprise.” These provisions are intended to regulate “restrictions” imposed by businesses on the resale prices of their trading counterparts. Therefore, if an upstream supplier has not actually imposed restrictions to force its downstream distributors to sell its products at certain prices or not to give discounts, it will be jumping to conclusions to say that such a supplier has violated Article 19 of the Fair Trade Act simply on the grounds that the supplier has stipulated suggested prices in distribution contracts, printed prices on the products, or attached price tags to the products.
Relevant article(s) of law: Fair Trade Act, Article 19
Updated at：2016-02-22 11:50:36