The National Assembly has adopted a number of amendments to the Monopoly Regulation and Fair Trade Act that will extend the scope of transactions restricted as 'unfair support' between a company and its affiliates or other specially related parties. The rules may be of keen interest to a number of large business groups in Korea, given the potential relevance for control and managerial strategy.
The Seoul High Court recently dismissed Intel's request for revocation of an order of correction and payment of a surcharge imposed by the Korea Fair Trade Commission. This is the first case in which the illegality of exclusive trading conditions in the form of a loyalty rebate has been acknowledged in Korea and the first worldwide in which a court has acknowledged the illegality of Intel's exclusive trading conditions.
The Korea Fair Trade Commission recently took corrective measures regarding a number of business combinations. Following concerns arising from an acquisition in the technology sector, the commission ordered the acquirer to organise a sale of its major assets. The commission also imposed fines on foreign enterprises for failing to file a report on their business combinations, amounting to KRW90.3 million across five cases.
The commencement of a new administration under President-Elect Park Geun-hye next month is expected to lead to drastic changes in government policies, including the eradication of unfair business practices. The Fair Trade Commission has joined the incoming government's drive for economic democratisation by drawing up a blueprint to execute these policy changes in the competition field.
Including: Legislative framework of cartel prohibition; Investigative powers; Penalties; Leniency for companies; Whistle-blowing and plea bargaining; Appeal process; Damages actions; Further developments.
In a follow-on damages case filed by the government against five domestic petroleum companies that engaged in cartel activities regarding petroleum products for military use, the Seoul High Court has reversed the district court's judgment which accepted the multiple regression method of estimating damages resulting from cartels. Instead, the appellate court adopted the so-called 'yardstick method'.
The Korea Fair Trade Commission recently amended the Notification on the Implementation of the Leniency Programme for Corrective Measures against Confessors. The purpose of this amendment, which is the third amendment since the programme was established on April 1 2005, is to increase incentives for leniency and remedy problems arising from the existing leniency programme.
The Korea Fair Trade Commission has enacted amendments to a number of guidelines concerning monopoly regulation and fair trade, in particular to the M&A review guidelines. The guidelines seek to minimize difficulties faced by companies undergoing M&A reviews and increase the efficiency of the review process through selection and concentration.
The Supreme Court recently affirmed that six US, German and Japanese graphite manufacturing companies had violated the Monopoly Regulation and Fair Trade Act when they engaged in cartel activities outside Korea. It held that agreements between the companies to fix and maintain product prices in the international market directly affected the Korean market.
The Korea Fair Trade Commission recently updated its standard subcontract for the software industry. It is recommended that the subcontract be used as a guideline when an entity enters into a subcontract agreement to implement and integrate a software application for a company that provides a packaged or customized software end product to end users.
Despite the settlements reached by Microsoft in two antitrust complaints against it, the Korean Fair Trade Commission (KFTC) has found the US software giant to be in violation of the country's fair trade laws and regulations following a four-year investigation. The KFTC ordered Microsoft to cease bundling Windows and to pay heavy fines.
Microsoft has succeeded, at least in part, in settling the two antitrust cases filed against it in South Korea by Daum Communications and RealNetworks Inc. Microsoft and Daum have actually agreed to collaborate in creating a new partnership that would bring select online content and advertising from Daum to Microsoft's MSN users.
The amended Monopoly Regulation and Fair Trade Act, and the Enforcement Decree promulgated thereunder, introduce certain major changes to the leniency programme that applies to collusive behaviours. The amended provisions apply to all those who report to or cooperate with the commission after April 1 2005.
The Korean Fair Trade Commission has adopted a substantially revised monetary reward programme for individuals reporting and providing evidence of certain conduct that violates the Monopoly Regulation and Fair Trade Act. The reward programme focuses on five specific types of unfair business practice outlawed by the act.
Under new guidelines, which adopt a four-step approach, a clear and systematic standard will be applied when the Korea Fair Trade Commission is considering whether to impose a financial sanction and the extent to which it should be imposed, if any.
The Korea Fair Trade Commission has changed its business combination reporting regulations by issuing Notification 2001-11, which requires foreign companies to report certain significant business combinations occurring between foreign companies outside Korea.
The Korea Fair Trade Commission recently imposed combined civil penalties of over $8 million on six graphite electrode producers from Germany, Japan and the United States for their participation in an illegal international cartel. This is the commission's first use of corrective measures against foreign companies through its application of the Korean Competition Law, the extraterritorial applicability of which was announced by the commission in October 2000.
The Korean Fair Trade Commission does not apply the Anti-monopoly and Fair Trade Act to business combinations that occur abroad and involve only foreign companies. However, the commission has announced its intention to investigate and penalize violations of the act by foreign companies that occur abroad, where the violations have an anti-competitive effect in Korea.
The Fair Trade Commission has addressed the issue of whether the Antitrust and Fair Trade Act applies to transactions among foreign entities occurring outside Korea, regardless of the lack of an express provision for an extraterritorial jurisdiction.
The amended Unfair Competition Prevention and Business Secret Protection Act includes provisions relating to the dilution of well-known trademarks. The act also applies to disputes involving domain names.