Research Report
Ⅰ. Background and Purpose
□ Research background
○ Since the regulation on Undue Support Practices in Item 7, Clause (1), Article 23 was adopted in the Monopoly Regulation and Fair Trade Act(hereafter, ‘the MRFT Act’) on Dec, 30, 2006, it has regulated not the large enterprises but all the enterprises. Because the Supreme Court has focused whether the undue support practices at issue is able to limit competition in the related market, it was difficult to regulate the pursuit of the personal interests in the large enterprise groups. Therefore, the MRFT Act has revised much to reinforce the regulation on Undue Support Practices of the large enterprise groups on Aug, 13, 2013.
□ Research purpose
○ The MRFT Act has adopted Article 23-2(Prohibition on Undue Support Practices to Specially Related Persons) to regulate effectively the pursuit of the personal interests of the large enterprise groups. And it has alleviated the necessary conditions of the existing provision of the Act, Item 7, Clause (1), Article 23, and formulated the legal ground to regulate so-called ‘Toll Fee’ practices by adopting a new provision in the Article.
○ The MRFT Act has left formulating the specified types of prohibition on ‘Toll Fee’ practices adopted in Item 7, Clause (1), Article 23 to the enforcement decree, and it has left deciding the important issue such as the regulatory coverage, the specified types of prohibition and the yardsticks of exemption reasons to the enforcement decree. It is necessary to give shape to them in the enforcement decree of the Act.
Ⅱ. Outline
□ Establishment of the relationship between the regulations of Article 23 and Article 23-2
○ The regulatory purpose
- The regulatory purpose of Item 7, Clause (1), Article 23 of the MRFT Act is to prohibit ‘Undue Support Practices characterized by the feature of the Unfair Businesses’, but that of Article 23-2 of the Act is to prohibit ‘the pursuit of the personal interests of the large enterprise groups.’ The Articles are different from each other in the purposes of regulation.
○ The regulatory coverage
- The regulatory coverage of Item 7, Clause (1), Article 23 of the MRFT Act is ‘the general entrepreneurs’, but that of Article 23-2 of the Act is ‘the large enterprise groups’.
○ The regulatory contents
- The regulation on Undue Support Practices of the large enterprise groups in newly adopted Article 23-2 of the MRFT Act prohibits ‘Undue Providing of Business Chance’ and ‘Considerably Large Scale Trade without Reasonable Consideration and Comparison’ as well as ‘Considerably Advantageous Trade’. It is different from the regulation on Undue Support Practices in Item 7, Clause (1), Article 23 of the Act which prohibits only ‘Considerably Advantageous Trade’ and ‘Toll Fee’ practices.
- Article 23 and Article 23-2 of the MRFT are different from each other in the aspects of the regulatory purpose, coverage and contents. Therefore, Article 23-2 is not the special law of Article 23, but the former has ‘a parallel relationship’ to the latter with the different dimension’s regulations.
□ Specifying the types of prohibition and the yardstick of the exemption
○ The enforcement decree on Toll-Fee prohibition newly adopted in Item 7, Clause (1), Article 23 of the MRFT Act may as well prescribe two cases. The first case is that the firm added in the way of the trade plays no role or little role. The second case is that the firm added in the way of the trade plays a little role but gets the rewards with too much value.
○ The enforcement decree on newly adopted Article 23-2 of the MRFT Act may as well prescribe each types of prohibition such as ‘Considerably Advantageous Trade’, ‘Undue Providing of Business Chance’ and ‘Considerably Large Scale Trade without Reasonable Consideration and Comparison’. The desirable model of the enforcement decree revision bill to specify each types of prohibition are suggested in the main text and conclusion of this report.
○ The exemption reasons of ‘Considerably Large Scale Trade without Reasonable Consideration and Comparison’, or ‘Internal Trading Practice’ in Clause (2), Article 23-2 of the MRFT Act are Efficiency, Security and Emergency. The desirable model of the enforcement decree revision bill to specify the yardstick of the exemption reasons are suggested in the main text and conclusion of this report.
Ⅲ. Expected Benefits
□ This Report explains the relationship between the regulation on Undue Support Practices in Item 7, Clause (1), Article 23 of the MRFT Act and the regulation on Undue Support Practices of the large enterprise groups in Article 23-2 of the Act in the aspects of the regulatory purpose, coverage and contents. And this report suggests the direction of the regulation on Undue Support Practices.
□ This Report suggests the desirable model of the enforcement decree revision bill of the MRFT Act, and it is expected that this Report contributes to influence the revision.