Distribution and licensing arrangements are crucial channels to market for many global firms competing in the Asia Pacific region. It is can be easier to use local firms to penetrate the culturally and political diverse markets across the region. However, using a standardised distribution/licensing agreement across the region can be challenging because the national competition law/antitrust rules about vertical restraints vary widely– from the ‘almost anything is permitted’ approach in Singapore to ‘almost everything is not permitted’ approach in Taiwan.
As Asia is the world’s factory, firms in a distribution relationship often have other parallel relationships with each other or other firms in the same corporate group – such as toll manufacturing. This can add to the complexity from a competition law perspective.
With the assistance of other firms participating in AntitrustAsia, we have developed a tool to guide firms through the confusing maze of rules on vertical restraints across the key Asia Pacific markets. The tool provides a snapshot risk matrix for the key forms of vertical restraints, such as exclusive territories or retail price maintenance. It then backs this up with a more detail table explaining the law.
We hope you find this tool useful. You can access it online at www.antitrustasia.com.
Where are my arrangements at risk?
Distribution and licensing arrangements are crucial channels to market for many global firms competing in the Asia Pacific region. To guide firms through the maze of rules on vertical restraints across the key Asia Pacific markets, this tool provides a snapshot risk assessment matrix for the key forms of vertical restraints, such as exclusive territories or retail price maintenance. A more detailed table explaining the law is set out in the document entitled ‘The Basics’.
Click here to view the table.
Rolling out standardised distribution agreements across Asia Pacific is challenging because of the huge variety in the treatment of vertical arrangements under each jurisdiction’s competition laws. This tool provides a handy summary by jurisdiction, together with a risk assessment for the main types of restraints found in distribution agreements. In this table, we use the term ‘competition effects test’ to refer to a requirement that the conduct have the required degree of adverse effect on competition in a market. The terminology used to describe the required degree of impact differs: e.g. Australia uses “substantial” while India uses “appreciable adverse effect”.
Click here to view table.