Fair Trade Law Q&A - Concerted Actions

Article 15, Paragraph 1 of the Fair Trade Act provides that enterprises shall not engage in concerted actions. This prohibition shall not apply, however, where the conduct is beneficial to the overall economy and the public interest, and approval has been granted by the competent authority. Subparagraph 7 of the same Article thereof permits "concerted actions for the purpose of improving operational efficiency or strengthening the competitiveness of small and medium enterprises ("SMEs")".

As for whether an enterprise qualifies as an SME that may apply for approval of concerted actions pursuant to the foregoing provision, Article 21 of the Enforcement Rules of the Fair Trade Act provides:" A small or medium-sized business as referred to in Subparagraph 7, Paragraph 1, Article 15 of the Act shall be determined in accordance with the criteria set forth in the Act for Development of Small and Medium Enterprises." Moreover, under the current SME qualification standards adopted by the Small and Medium Enterprise and Startup Administration of the Ministry of Economic Affairs, qualification criteria vary depending on factors such as industry type, capitalization, annual revenue, and the number of regularly employed employees. As the applicable criteria are extensive, they are not enumerated herein.

Relevant Provisions: Article 15of the Fair Trade Act; Article 21 of the Enforcement Rules of the Fair Trade Act; Act for Development of Small and Medium Enterprises