Direction for the KFTC's Competition Policies in 2006
by Dr. Ohseung Kwon, chairman of the KFTC (May 18th. 2006)
Honorable Mr. Bernhard Merforth, ambassadors from EU member countries, business leaders and officials of the European Union Chamber of Commerce in Korea,
I'd like to thank all of you for your warm introduction and for giving me this opportunity to address the European Union Chamber of Commerce in Korea.
I'm really honored to have this chance to talk with you about the Korea Fair Trade Commission's policy direction in 2006 and its cooperation with the EU competition authority.
Korea and EU have maintained a very close economic relationship.
Last year, EU emerged as Korea's second largest export market following China, as Korea's exports to EU had surpassed those to the United States for the first time in Korea's history.
Bilateral trade has also continued to expand with Korea's imports from EU maintaining double-digit growth.
Meanwhile, since the financial crisis, EU's investment in Korea has continuously increased as well, recording an accumulated total of 35.4 billion dollars as of 2005.
As the largest investor in Korea, EU has made a significant contribution to Korea's economic development and job creation.
To maintain the economic cooperation between Korea and EU and especially EU's investment in Korea, Korea should have a more favorable business climate that includes greater transparency and predictability.
For this to happen, upgrading Korea's market economy system will be the first and foremost step.
Upgrading the market economy system is a prerequisite not only for attracting investment from EU and other foreign companies, but also for the Korean economy to join the ranks of advanced economies.
To these ends, promoting free and fair competition in every field of the economy is required more than ever before.
However, there are still many areas in the Korean market that suffer from persistent monopolistic or oligopolistic market structures. Moreover, anti-competitive practices are prevalent in some parts of the economy.
The KFTC believes that free and fair competition in the market will serve as a foundation on which the market economy can be better upgraded.
Now, I would like to address this year's 5 main tasks of KFTC's policy enforcement for free and fair competition this year.
First, the KFTC will thoroughly look into its achievement in enforcement of the Monopoly Regulations and Fair Trade Act and other competition laws of the past 25 years, and based on this analysis, the Commission will refine its competition laws and policies.
Second, it will strengthen competition law enforcement and promote competition principles.
Third, competition advocacy will be reinforced as well so that competition culture can spread across the entire society.
Fourth, it will strive to promote cooperation between large companies and small-and-medium sized businesses or SMBs.
.
And fifth, the Commission will devote much of its energy and resources to realizing consumer sovereignty.
Let's get into the detail.
Upgrading competition laws & regulations.
As the first step, a「Task Force for Advancing the Market Economy」will be formed to have in-depth discussions on ways to improve the overall competition laws and Chaebol policies.
The task force will have two working groups - “Competition Law & Policy Working Group” and “Chaebol Policy Working Group”
Starting from the second quarter of this year, the Competition Law & Policy Division will listen to experts' opinions on ways to improve the competition law in terms of both substance and procedure.
Meanwhile, in June, the Chaebol Policy Working Group will form a panel of officials from relevant government agencies, scholars, business leaders and representatives from civic groups to determine the direction for Chaebol policies such as those on holding companies and the ceiling on total amount of shareholding in other domestic companies.
Based on the results from these reviews, the KFTC will revise or reform laws and regulations next year.
Strengthening competition law enforcement and promoting competition principles.
The KFTC has strong commitment in promoting competition in the market by beefing up competition law enforcement in industries where monopoly or oligopoly has remained for a long time or where anti-competitive practices are wide spread.
In light of this, the KFTC will enhance effectiveness in competition laws by fortifying law enforcement against competition-restraining behaviors such as cartel, abuse of market dominance, anti-competitive M&A and others.
Aside from fortifying current competition law enforcement, the Commission will focus its capacity on promoting competition in the once regulated sectors, such as broadcasting, energy and medical & health care sectors, that are becoming open to market competition these days.
The Commission will apply competition laws to newly emerging industries such as intellectual property rights and convergence between the broadcasting and telecommunications and also to those industries that are now being deregulated such as energy and medical & health care industries.
Placing emphasis on competition advocacy.
Some anti-competitive regulations & practices can't be reformed by competition law enforcement alone.
In this case, they will be addressed by competition advocacy activities.
Since 2004, the KFTC has tried to identify anti-competitive regulations stipulated in laws & notifications, and as a result, a total of 107 regulations were identified as requiring either elimination or revision.
Though such regulatory reforms have made significant achievement, from the perspectives of companies, industries or individuals subject to such anti-competitive regulations, such achievement seemed far from sufficient.
So, the KFTC will take a new approach where it will thoroughly analyze individual industries' structures and characteristics to identify and eliminate the real obstacles to competition in each industry.
In addition to this, the Commission will launch more systematic and extensive competition advocacy activities to create a pro-competition culture in the society and to encourage companies to voluntarily comply with competition laws
Especially, the Commission will encourage more and more companies to adopt Compliance Program.
To help the program be operated as it was originally intended, evaluation & grading systems will be introduced to assess companies' operation of the Program.
Promoting cooperation between large companies and SMBs.
Restraining monopoly through competition law enforcement can provide protection to SMBs and this will help creating a level playing field for large companies and SMBs.
However, this kind of protection can't help but have limits, so a separate set of policies are necessary to foster fair competition between large companies and SMBs.
As part of this effort, the KFTC will induce large companies and SMBs to establish fair contract practices among them, for instance, by aggressively encouraging them to use “the standard subcontract form.”
And through ex officio on-site investigations, it will strengthen punishment against unfair subcontracts by market dominant companies.
In addition to this, through the inter-government agency network, the KFTC will continue to coordinate its policies on unfair subcontract transactions with other government agencies.
Realization of consumer sovereignty.
The recent market structure has changed from suppliers' market into buyers' market.
Moreover, in this so-called “Digital Economy,” once passive consumers have emerged as active partners of companies.
In response to these changes, the KFTC will pursue a paradigm shift in consumer policies to focus more on realization of consumer sovereignty rather than on consumer protection.
Therefore, the Commission will strengthen consumers' capacity to fulfill their due role in encouraging competition among companies.
To this end, the Commission will expand education programs for them and provide consumers with sufficient information so that they can make informed decisions.
On top of this, it will also do its best to enhance consumer safety and consumer damage compensation.
From now on, I'm going to explain how the cooperation between Korea and EU in the area of competition policies has developed.
With the ever-increasing globalization, cross-border business activities are also on the rise and this has resulted in increasing need for international cooperation in the area of competition policies.
The KFTC has established itself as one of the most experienced competition authorities by successfully hosting the 3rd ICN conference in Seoul in Apr 2004 and ICN Cartel Workshops in Nov 2005.
It has been also actively participating in discussions at ICN, OECD and other international bodies on convergence in national competition policies.
International cooperation has developed significantly through bilateral consultation meetings and cooperation arrangement with DG Competition, the Competition Authority of EU and other competition authorities abroad.
Especially, DG Competition and the KFTC have held annual competition policy consultation meetings since 2001, and in coming June, the 5th consultation meeting will be held in Seoul.
In Oct 2004, the KFTC and DG competition signed an MOU. Once EU member countries approve this cooperation arrangement, we will be able to take measures necessary to develop this cooperation arrangement into a cooperation agreement.
Meanwhile, I do hope that Korea and EU will further strengthen cooperation in extending technical assistance to developing & transition countries in Asia to help them adopt & enforce competition laws & policies.
Distinguished guests,
So far, I have summarized the direction for the KFTC's competition laws & policies for 2006 and also how the cooperation between Korea and EU has developed in the area of competition policies.
As I've mentioned earlier, economic cooperation between the two sides has increased dramatically over the past few years and it is expected to do so for the days to come.
I firmly believe that all these achievements are attributable to EUCCK officials and EU business leaders' hard efforts to promote bilateral trade and economic ties.
I congratulate the EUCCK on the 20th anniversary of its founding and I hope that you will maintain your efforts to strengthen our economic cooperation.
As chairman of the KFTC, I promise that the KFTC will not spare its efforts to promote fairness and transparency in the market by establishing free and fair competition.
Thank you for listening.
웹사이트: http://www.ftc.go.kr
올인원 PR 플랫폼
반복되는 PR 업무를 자동화하고 전략에만 집중하세요
