I was asked to sell only specific products as a condition for advertising support — does this constitute a fair trade violation?

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fair trade violation

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Hello. We provide legal consultation regarding fair trade violations.

An act in which a supplier induces a distributor to sell only specific products as a condition for providing advertising support may, depending on the circumstances, be judged as an unfair customer inducement act or a support act for excluding competing businesses, and may constitute a fair trade violation.

The Fair Trade Act prohibits as unfair trading practices acts in which suppliers use their bargaining position in transactions to unfairly set transaction conditions on distributors or to induce them to handle only specific products.

In particular, when monetary support functions as consideration for transaction conditions, it may be regarded as 'conditional support' and judged as illegal.

In addition, distributors may also be subject to FTC investigations, and if a fair trade violation is recognized, this can lead to corrective orders, imposition of penalty surcharges, and in serious cases even criminal complaints.

In actual cases, if there are circumstances suggesting that advertising fees or incentives were used as a means to 'block sales of competing products,' the FTC will attempt to prove the violation based on electronic contracts, messengers, emails, and the like.

Therefore, do not simply comply with the supplier's request, but objectively organize materials showing whether the transaction conditions are voluntary and serve legitimate commercial purposes.

In preparation for future investigations, we recommend securing contracts, advertising fee settlement records, sales guidelines, and the like.

Since the determination of 'unfairness' of an act is critical in fair trade violations, legal liability varies depending on the circumstances and purposes before and after the transaction.

If you have doubts, it is advisable to consult with a fair trade specialist attorney early on to establish a response strategy.