9. Is restriction on sales territories in violation of the Fair Trade Act?
Restrictions on sales territories imposed to distributors constitute to “imposing improper restrictions on its trading counterparts' business activity as part of the requirements for trade engagement” set forth in Article 20(v) of the Fair Trade Act. However, not all the restrictions on territories are illegal. Only when the related enterprises can’t provide justification for such acts and such acts are likely to restrain competition. Then, there will be possibilities for such acts to be deemed illegal. The following factors shall be taken into consideration when determining whether such acts are proper: intent, purpose, the standing of the market, market structure, product characteristics and ,as well as impact on market.
Relevant article(s) of law: Fair Trade Act, Article 20
Updated at：2016-02-22 14:56:03