Chapter On Korea, 'The Cartels and Leniency Review,' 5th Edition, Law Business Research (Co-author) (2017)

I ENFORCEMENT POLICIES AND GUIDANCE

The Monopoly Regulation and Fair Trade Act (MRFTA) is the primary Korean competition statute. It was enacted on 31 December 1980 and became effective on 1 April 1981. The MRFTA prohibits conduct that is generally prohibited in other countries, including cartel activities, abuse of dominance, and anticompetitive mergers and acquisitions. The Enforcement Decree of the MRFTA (Enforcement Decree) is a presidential decree setting forth specific standards and procedures to enforce the MRFTA.

The Korea Fair Trade Commission (KFTC), established pursuant to Article 35 of the MRFTA, is the primary competition enforcement agency in Korea. The KFTC possesses quasi-judicial as well as investigative authority. As such, it investigates alleged violations of the MRFTA and imposes sanctions, including fines and corrective orders, on violators. In addition, the KFTC also exercises quasi-legislative authority by issuing notifications and guidelines. While the KFTC does not have the authority to impose criminal sanctions, it may refer cases to the Prosecutor's Office for criminal proceedings.

Cartel enforcement has been one of the KFTC's enforcement priorities since its establishment in 1981. Article 19 of the MRFTA prohibits improper concerted activity (i.e., cartels). Specifically, Article 19(1) of the MRFTA prohibits businesses and individuals from agreeing with one another to unfairly restrain competition or from requiring others to engage in such collusion. Article 19(1) of the MRFTA expressly prohibits nine types of concerted activities:

price-fixing agreements; agreements on transaction conditions output restriction agreements; market allocation agreements; agreements that restrain or interfere with the establishment of facilities or equipment used to produce goods or to provide services; agreements that restrict certain types or specifications of goods or services; the establishment of a company to carry out concerted sales practices; bid-rigging agreements; and other agreements that restrain or interfere with business practices. Among the notifications issued by the KFTC regarding concerted activities, the most important are the Concerted Activity Review Guidelines and the Notification on Implementation of a Leniency Programme. These two notifications establish the general principles and procedures concerning the evaluation of concerted activities and the treatment of leniency applicants.

As the implementation of...