Fair Trade Law Q&A - Resale Price Maintenance

Does including suggested resale prices in distribution agreements or printing prices on products violate the Fair Trade Act?

Article 19 of the Fair Trade Act provides that,"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." The purpose of Article 19 is to prohibit restraints on resale pricing imposed by an enterprise on its trading counterpart. Accordingly, where an upstream supplier does not require downstream distributors to adhere to fixed resale prices or prohibit discounting, the mere inclusion of suggested resale prices in a distribution agreement, the printing of prices on products, or the attachment of price labels or stated prices to products does not, by itself, constitute a violation of Article 19 of the Fair Trade Act.