"If a union negotiates prices on behalf of small business owners, it is not considered collusion"

Fair Trade Commission Establishes and Implements 'Guidelines for Reviewing Actions of Small Business Associations'

Small business owners waiting for support consultation.

[Asia Economy Reporter Moon Chaeseok] From now on, the act of small business associations negotiating transaction terms with franchisors and suppliers will not be subject to collusion regulations.

On the 30th, the Fair Trade Commission announced that the "Guidelines for Reviewing Acts of Small Business Associations," which include this content, will be implemented starting from the 31st.

The Fair Trade Commission expects that the bargaining power of small business owners will strengthen after the guidelines take effect. Until now, the intentions of dominant businesses have been reflected more strongly than those of small business owners.

The guidelines specify that the act of small business associations negotiating transaction terms such as raw material prices, business hours, sales incentives, and store environment improvement costs with dominant businesses is not considered collusion.

For example, if a small business association requests a dominant business to lower the price of raw materials provided by the franchisor to franchisees, collusion regulations will not apply.

Also, demands such as ▲ shortening business hours during holidays with reduced demand ▲ increasing sales incentives for agencies that attract more customers ▲ changing the cost-sharing standards for store environment improvements will not be subject to collusion regulations.

Acts by associations that unfairly restrict competition among small business owners and harm consumer interests will be subject to collusion-related regulations.

For instance, if a small business association sets the prices or supply quantities of products sold to consumers and requires franchisees and agencies to comply, it constitutes collusion.

Even if the acts of small business associations unfairly restrict competition among small business owners and harm consumer interests, collusion-related regulations will apply.

A Fair Trade Commission official stated, "These review guidelines clearly exclude the application of collusion regulations to the acts of franchisee and agency associations negotiating transaction terms with the relevant dominant businesses, which is expected to significantly contribute to the rationalization of transaction terms for franchisees and agencies."

This content was produced with the assistance of AI translation services.