Antitrust Law in South Korea

Introduction

South Korean antitrust law is governed principally by the Monopoly Regulation and Fair Trade Act (MRFTA) (독점규제 및 공정거래에 관한 법률), enacted in 1980 and substantially amended over four decades. The Korea Fair Trade Commission (KFTC) (공정거래위원회) serves as the primary enforcement authority, possessing both prosecutorial and adjudicative powers. The MRFTA targets four main areas: abuse of market dominance, mergers and acquisitions, economic concentration (chaebol regulation), and unfair trade practices.

Monopoly Regulation and Fair Trade Act (MRFTA)

The MRFTA applies to all “enterprises” (business entities) and their organizations. It is supplemented by the Fair Transactions in Large Retail Business Act, the Franchise Business Act, and the Act on Fairness of Subcontracting. Key prohibitions include:

Abuse of Market Dominance (Article 3-2)

Enterprises with market dominance (generally market share exceeding 50% for a single firm or 75% for the top three) are prohibited from:

• Unreasonably fixing prices, output, or terms
• Interfering with other enterprises’ business activities
• Unreasonably excluding competitors

Merger Regulation (Articles 7–12)

The KFTC reviews mergers exceeding certain thresholds (combined assets or revenue of KRW 300 billion or more). The substantive test is whether the merger “substantially lessens competition” in a relevant market. The KFTC may impose conditions, require divestitures, or block mergers.

Unfair Trade Practices (Article 23)

Twelve categories of unfair trade practices are prohibited, including:

• Refusing or restricting dealing
• Price discrimination
• Tying arrangements
• Unfair inducement of customers
• Abuse of superior bargaining position

Chaebol Regulation

A distinctive feature of Korean antitrust law is the regulation of large business groups (chaebol). The MRFTA imposes:

• Limits on cross-shareholding within the same business group
• Restrictions on circular investment
• Limits on debt guarantees among affiliated companies
• Voting right restrictions for financial or insurance companies within a group

The KFTC annually designates large business groups subject to these regulations (those with total assets exceeding KRW 5 trillion as of 2024).

Korea Fair Trade Commission (KFTC)

The KFTC is a quasi-judicial administrative agency under the Prime Minister’s Office. It comprises a commission of nine members (including one chairperson and three vice-chairs) with tenure protection. The KFTC may:

• Issue corrective orders and cease-and-desist orders
• Impose administrative fines (surcharges) up to 10% of relevant revenue
• File criminal complaints with the prosecution
• Seek injunctions from courts

Private Enforcement

The MRFTA provides for damages claims (Article 56). Private plaintiffs may claim actual damages, and the KFTC’s findings of fact are binding on civil courts. However, private enforcement remains relatively underdeveloped compared to KFTC public enforcement.

Conclusion

South Korean antitrust law combines substantive provisions similar to EU and US competition law with distinctive chaebol regulation. The KFTC’s active enforcement, including high-profile cases against global technology companies and domestic conglomerates, has established South Korea as a significant competition law jurisdiction.