Considerable discussion pertaining to unfair competition has recently been triggered by down stream distributors taking advantage of their dominant market position to conduct unfair trade practices with those who supply merchandise. Therefore, this research focuses on whether large distributors with certain channel rights are abusing their dominant market position and possibly imposing unfair competition practices on small suppliers. In making use of interviews and supplier questionnaires, we gain a full understanding of the impact of large distributors’ vertical restraints on unfair competition. Most suppliers are concerned about the problem of surcharges and exclusive dealing arrangements. The types of vertical restraints, however, do vary with different distributors, but the most common one concerns price. The results show that the Fair Trade Commission should consider multiple principles, such as the scale and type of an enterprise, and its marketing strategy etc. rather than merely the threshold of market share.