Fair Trade Law Q&A - Other Restrictive Trade Practices

Article 20, Subparagraph 3 of the Fair Trade Act provides that, an enterprise shall not engage in the acts of preventing competitors from participating or engaging in competition by inducement with low price, or other improper means that is likely to restrain competition. The term "inducement with low price" refers to conduct whereby an enterprise offers prices below cost or at prices that are manifestly unreasonable for the purpose of hindering competitors from participating in or engaging in competition in the market. In determining whether such low-price inducements are likely to restrain competition, the Fair Trade Commission shall considers comprehensively of the relevant circumstances, including the intent and purpose of the undertaking, the parties' market positions, the structure of the relevant market, the characteristics of the goods or services involved, and the actual or potential effects of the conduct on market competition.

Relevant Provisions: Article 20 of the Fair Trade Act; Article 27 of the Enforcement Rules of the Fair Trade Act