Fair Trade Law Q&A - Other Restrictive Trade Practices

"Discriminatory treatment" refers to an enterprise providing different treatment with respect to the same goods or services to purchasers, such as wholesalers or retailers, at the same level and performing the same role within the distribution system. Such discriminatory treatment may include differences in price as well as differences in trading conditions, including payment methods, transaction terms, packaging, and etc. Discriminatory treatment often results in unfair competition among enterprises receiving different treatment. Accordingly, antitrust laws in many jurisdictions regulate discriminatory treatment by enterprises.

However, discriminatory treatment is also a common practice in ordinary business activities, and enterprises usually have legitimate business justifications for adopting differential treatment. Such conduct does not necessarily reflect an intent to provoke unfair competition. Therefore, the Fair Trade Act does not categorically prohibit discriminatory treatment. Rather, only discriminatory treatment undertaken without justifiable cause and likely to restrain competition in the market is prohibited under Article 20 of the Act.

Relevant Provision: Article 20 of the Fair Trade Act