Fair Trade Law Q&A - Enterprises

Are government administrative agencies considered "enterprises" under Article 2 of the Fair Trade Act, and are they subject to the Act when engaging in private economic activities?

  1. Administrative agencies are organizational bodies that act externally on behalf of the State or other public juristic persons, such as local self-governing entities. Within the scope of their authority, they may act in their own name on behalf of the juristic person to which they belong, and therefore qualify as legal actors capable of undertaking conduct. Whether an administrative agency constitutes an "enterprise" under Article 2 of the Fair Trade Act depends on the nature of the conduct at issue - namely, whether the agency is exercising sovereign authority (public powers) or engaging in economic activity:
    1. Where an administrative agency acts in the exercise of sovereign authority or engages in public-law conduct, rather than providing goods or services in the marketplace, such conduct does not satisfy the statutory definition of an "enterprise" in the Fair Trade Act. Accordingly, the agency shall not be considered an enterprise under the Act in this context.
    2. By contrast, where an administrative agency acts in its capacity as a private-law actor and engages in ordinary commercial transactions or economic activities, it shall be subject to the Fair Trade Act in the same manner as privately operated enterprises, in order to ensure fair competition and equal competitive opportunities for trading counterparties and competitors.
  2. Where an administrative agency, acting under private law, provides goods or services with economic value in the marketplace, or engages in demand-side conduct arising from the provision of such goods or services (including the collection of fees), such conduct shall be subject to the Fair Trade Act, regardless of whether the agency has already commenced the provision of such goods or services at the time the demand arises. The same applies where an administrative agency commissions private parties or other organizations to provide goods or services of economic value under private law; any resulting demand-side conduct shall likewise be subject to the Act, irrespective of whether the provision has already begun at the time of demand.