In Korea, unfair trade practices and anti-competitive behavior of enterprises are regulated under Monopoly Regulation and Fair Trade Act (“MRFTA”), which was enacted on December 31, 1980 and which have underwent several revisions since its enactment. Article 1 of MRFTA sets forth the purpose of the Act as preventing the abuse of market dominance and excessive concentration of economic power in enterprises and regulating undue concerted acts and unfair trade practices, thereby promoting fair and free competition.
In principle, MRFTA applies to transactions between enterprises or those transactions where a party thereto is an enterprise. However, such sectors as electricity, gas, water, public health, and small-and-medium enterprises are regulated under separate laws and regulations since they are highly public in nature or require different policy considerations by government. In addition, exercise of rights pertaining to intellectual properties is regulated under such acts as Copyright Act, Patent Act, and Trademark Act, etc.; however, to the extent a certain intellectual property right holder abuses his or her rights to obtain unfair trade benefits in a transaction (e.g., designating the source of purchasing raw materials or parts when granting licenses to other enterprises), MRFTA shall be applicable to regulate such unfair practice.
The Korea Fair Trade Commission (“KFTC”) is Korea’s competition agency which is in charge of developing competition policy and enforcing MRFTA. For KFTC, cartel, M&As, and abuse of dominance in market are major targets of law enforcement. KFTC also does not seem to shy away from applying MRFTA to foreign companies operating outside of Korea when their actions cause, or have potential to cause, anti-competitive effects in Korea.