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The Korea Herald
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THE INVESTOR
March 29, 2024

Economy

Antitrust watchdog gears up for overhaul of fair trade law

  • PUBLISHED :August 26, 2018 - 16:35
  • UPDATED :August 26, 2018 - 16:47
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[THE INVESTOR] The nation’s antitrust watchdog said on Aug. 26 it preannounced legislation for the complete overhaul of the nation’s fair trade laws in a move to adopt competition in law enforcement and toughen regulations on unfair business practices.

If the bills are revised, it will mark the first complete overhaul of fair trade laws in 38 years.

Foremost among the changes is to abolish the Fair Trade Commission’s exclusive rights to charge businesses for hardcore cartels, sharing the authority with prosecutors. 


Korea's antitrust watchdog Fair Trade Commission Kim Sang-jo



Hardcore cartels relate to price-fixing, limiting supply, market segmentation and bid-rigging that may harm fair competition and deprive companies of opportunities to enter a market. Through the changes, prosecutors will have the authority to charge companies without accusations by the FTC.

Apart from cartels, victims from unfair business practices will be able to directly file a claim with the court without going through the antitrust watchdog.

The court will also be able to order law violators to submit documents that can be used to demonstrate damages of victims even if the documents are confidential. Currently, if violators refuse to submit evidence, there is no other way to secure evidence even if victims sue for damages.

The overhaul of the fair trade law also focuses on curbing expedient expansion of controlling power of conglomerates’ owner families through corporate foundations.

Currently, most conglomerates, including Samsung, Hyundai Motor, SK, Lotte and Hanjin, have corporate foundations that hold stakes in the groups’ affiliates.

Corporate foundations are mostly set up with the aim of contributing to society through scholarships or research funds. But, some families are reported to have used the foundations to reduce inheritance and gift taxes or strengthen the family’s power.

The FTC said it would prohibit corporate foundation from exercising voting rights on their affiliates in terms of protecting management rights such as the appointment of executives, changing articles or mergers and acquisitions. But, if the affiliates are listed, up to 15 percent of exercising voting rights will be allowed.

The overhaul of the law was mapped out by academics, politicians and businesses through many debates. The FTC said it will take more opinions from the public during the preannouncement of legislation and submit the revised bills during the regular session of the National Assembly.

By Shin Ji-hye / The Korea Herald (shinjh@heraldcorp.com)

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