1. Policy Statement

Fair trade laws and policies are basic economic codes aimed at establishing free and fair competition among enterprises, which is the basic principle of market economy.

Fair trade laws and policies aim to promote free and fair competition by establishing pro-competitive market structures and securing fairness in trading practices. Such aims are pursued with a view to encouraging innovative business activities, protecting consumer rights and interests, and promoting a balanced development of the national economy.

2. Individual Action Plan

2.1 Current Status

2.1.1 Legal and Institutional Mechanisms

• In 1980, Korea established the "Monopoly Regulation and Fair Trade Act" which formed the legal framework of the fair trade rules and regulations.
  

• In 1981, the Korea Fair Trade Commission(KFTC) was established under the Economic Planing Board as the administrative organization in charge of competition laws and policies. Since 1994, it is operating as an independent government agency.
  

• In order to guarantee "free and fair competition," the KFTC places policy priority on prohibiting abuse of market-dominating position, preventing excessive concentration of economic power, and regulating undue collaborative activities and unfair business practices.
  

• In addition, the KFTC enacted the Fair Subcontract Transactions Act in 1984 to establish order in subcontract transactions. Under the act, unfair delay of payment, unreasonable refusals in the receipt of subcontracted goods, and the like are prohibited.
  

• Furthermore, since the Standardized Contract Act was enacted in 1986, the KFTC has taken corrective measures on enterprises taking advantage of their positions to force unfair stipulations on consumers.
  
  

2.1.2 Enhancing transparency of policies

• The content of KFTC decisions and judgments on cases are disclosed in judicial precedence reports.
  

• In order to eradicate anticompetitive trade practices, the KFTC offers and reinforces programs to raise awareness of competition laws among entrepreneurs and consumers.
  

• The KFTC has exerted efforts to prevent government ministries from adopting new restrictive laws and regulations by reviewing their legislation drafts and requesting that anticompetitive elements be corrected before enactment.
  

• The KFTC holds seminars on competition law and policy in cooperation with the academia.
  

2.1.3 Strengthening international cooperation

• The KFTC regularly holds annual competition policy meetings with the competition authorities of Japan, France, and the United States in which information is exchanged and constant efforts are made to strengthen bilateral cooperation.
  

• The KFTC also actively participates in competition policy-related discussions at APEC and at such international organizations as the OECD and UNCTAD.
  

2.2.1 Review its respective competition policy and/or laws and the enforcement thereof in terms of transparency.

Short Term (1997~2000)

< Strengthening enforcement of the Fair Trade Act >


• The KFTC plans to reduce the areas which are exempted from the application of the Fair Trade Act to a minimum as well as to reduce the scope of granting exceptions to anticompetitive collaborative activities.
  

• The KFTC plans to strengthen the examination of anticompetitive corporate mergers and to bring up Korean merger examination standards to the international level.
  

• < Strengthening deregulatory functions >
  

• The KFTC will continuously make efforts to eliminate anticompetive elements in existing laws and regulations and to prevent the introduction of new competition- restricting laws and regulations by intensifying the prior examination of newly established laws and revised laws.
  

• The KFTC will lead economic deregulation within the government in order to promote competition in industries. Through such efforts, the KFTC will contribute to strengthening market functions and bring about substantial deregulation, the effects of which can be felt by the people and the businesses.
  

< Enhancing fairness, transparency, and professionalism of KFTC affair procedures >

• The KFTC will strive to minimize public inconveniences that may arise in the process of filing complaints, and it will establish a "Consumer Satisfaction Administrative System" to make KFTC affairs more consumer-oriented.
  

• Beginning in 1997, the KFTC will establish a Fair Trade Monitor System in which fair trade monitors will be chosen from the general public who will be responsible for reporting unfair business practices to the KFTC.
  

• Also beginning in 1997, the KFTC will build a Fair Trade Information Network System in which the KFTC will provide information of fair trade laws and regulations to the general public through PC network and through which the general public can also file reports of unfair business pratices.
  

  Medium Term (2001~2010)

• To effectively enforce competition policies, the KFTC will be reorganized and the procedures and methods of law enforcements will be improved.
  

2.2.2 To implement appropriate technical assistance

Short Term (1997~2000)

• Based on the experience accumulated from the competition policy training program in Seoul in September 1996, the KFTC will improve on the substance, induce more APEC members' participation and yield more results in the upcoming programs, which the KFTC plans to hold on an annual basis.
  

2.2.3 To establish cooperation arrangements among competition authorities in APEC members.

Short Term (1997~2000)

• The KFTC will constantly promote bilateral cooperation with Japan, France, and the US.
  

• The KFTC will actively participate in exchange of information and dialogue with APEC members to enhance knowledge of competition policies.