Abstract

Distribution business, which channels upstream producers and downstream consumers, has played an important and special role in the whole marketing system. Recent years has witnessed a revolution in the distribution business. Thanks to the evolution of economy and information technology, big distributors burgeon and prosper. Nowadays, big distributors are perhaps the most important players in the distribution business. Voluminous stocks and abundant sales points have made the big distributors more effective than those old-type small-and-medium distributors. The result is that big distributors stand on a superior position in the bargaining game with their suppliers. In the practice, many suppliers, especially small-and-medium ones, complain that big distributors tend to exert their superior positions and charge them additional fees besides normal contract fees. Big distributors refute these statements as undue and claim that those additional charges were used to increase sales points and promoting activities, thus benefited the suppliers. Faced with this confusion, we need to understand the implications of the additional charges from the perspectives of competition law. If necessary, we also have to impose some regulations on the big distributors, preventing them from unduly exert their buying power.

Based on the ideas stated above, this research makes clear the ideas of competition laws, investigates the regulations concerning big distributors imposed in other countries such as U.S., Japan and EU, conducts field research to understand the additional charges collecting behaviors in Chinese Taipei's distribution business. As a result, we found that the additional charges collecting behaviors in Chinese Taipei's distribution business put undue burdens on consumers' welfare as well as competition. The research, therefore, suggests that FTC should regulate such undue behaviors and the best strategies for this regulation would a mix of procedural regulation and self-regulation. This kind of regulation not only reduces the cost necessary, but will also strike a best balance between the distributors and their suppliers.