Abstract

[Abstract(Law)] A Comment on the Definition of ¡°Market Dominant Undertaking¡± and its Related Problems under the Korean Monopoly Regulation Act

  • DATE WRITTEN : 2020-11-02
  • WRITER : APCC
  • VIEW : 1126
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The Korean Monopoly Regulation and Fair Trade Act(¡°MRFTA¡±) prohibits conduct by one or more undertakings which amounts to an abuse of a dominant position(dominant undertakings). Accordingly, in a situation where a company in question is not in a dominant position, abuse of market dominance is hard to prove. In this sense, courts must decide whether the company has market power or not before deciding on whether the conduct in question constitutes abusive practices. In fact, Article 2(7) of the MRFTA provides a definition of a market dominant undertaking as it refers to one that has market dominance with which it may determine, maintain, or change prices, quantity of goods, or other trading conditions. However, it is almost impossible to prove a company acted in accordance with the term under Article 2(7). For this reason, the Korean Fair Trade Commission (¡°KFTC¡±) and courts highly take measures pursuant to Article 4(2) of the MRFTA which presumes to be a market-dominating enterpriser when a firm¡¯s ¡®total market share of not less than two or three firms is over 75%; provided that those whose market share is less than 10% shall be excluded.¡¯ In KIA Motor Car v. FTC, 2008Du17707 (2010), the Supreme Court held that a firm with 25% market share is a market dominating enterpriser. However, it is questionable to say that any company is a market dominating enterprise if the market share of two or three companies exceeds 75%. Because Article 4(2) is not sound competition law, it should be revised or amended. Moreover, there is another suggestion to not apply the Article to cases where only one company¡¯s individual conduct matters.
      
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