[Monopoly Regulation and Fair Trade Act]
CHAPTER 5 PROHIBITION OF UNFAIR BUSINESS PRACTICES
Article23 Prohibition of Unfair Business Practices
(1)
NO enterpriser shall commit any act falling under any of the following
subparagraphs and that is likely to impede fair trade (hereinafter referred to as
“unfair business practices’), or make an affiliated company or other enterprisers
perform such an act;
1.
An act which unfairly refuses any transaction, or discriminates against a
certain transacting partner;
2.
An act designed to unfairly exclude competitors;
3.
An act unfairly coercing or inducing customers of competitors to deal with
oneself;
4.
An act making a trade with a transacting partner by unfairly taking
advantage of his position in the business area;
5.
An act of trade under terms and conditions which unfairly restrict or
disrupt business activities;
6.
Deleted;
7.
An act assisting a person with a special interest or other companies by
providing advanced payment, loans, manpower, immovable assets, stocks and
bonds, or intellectual properties thereto, or by transacting under substantially
favorable terms therewith; anc
8.
Any act that threatens to impair fair trade other than those listed in
subparagraphs 1 through7.
(2) The categories or standards for unfair business practices shall be
determined by presidential Dceree.
(3) If necessary for the prevention of acts violating the provisions of
paragraph (1), the Fair Trade Commission may make and announce publicly
guidelines to be observed by enterprisers.
(4) In order to prevent the unreasonable inducement of customers, the
enterprisers
or
enterprisers
code(hereinafter referred to
organization
may
voluntarily
write
a
as the “fair competition code”)
(5) Enterprisers or an enterprisers organization may request that the Fair Trade
Commission examine whether or not the fair competition code as referred to in
paragraph (4) violates the provisions of paragraph (1) 3 or 6.
Article 24
Corrective Measures
The Fair Trade Commission may, when an act in violation of the provisions of Article 23
(1) is committed, order the enterpriser concerned to discontinue those unfair business
practices, to delete any pertinent provisions from a contract, to announce the fact of
receiving corrective order to public, or to take any other necessary corrective measures
against that act.
Article 24-2
Surcharge
In the event of the occurrence of practices in violation of the provisions of Article 23, Paragraph 1,
the Fair Trade Commission may impose upon the person concerned a surcharge not exceeding the
amount equivalent to two percent (five percent in case of violating the provisions of subparagraph 7)
of the turnover determined by Presidential Decree. In the case of absence of the turnover, a
surcharge may be imposed up to but not exceeding five hundred million won.
CHAPTER 8 RESTICTIONS ON THE CONCLUSION OF INTERNATIONAL
CONTRACTS
Article 32
Restrictions on Conclusion of Unfair International Contracts.
(1) No enterpriser or enterprisers organization shall enter into an international
agreement or international contract as prescribed by Presidential Decree,
(hereinafter referred to as “international contract”) containing provisions
concerning improper concerted acts, unfair business practices, or resale price
maintenance; provide that the foregoing shall not apply when the Fair Trade
Commission deems the effect of said agreement upon competition in a particular
business area to be negligible or deems that there are other unavoidable
reasons to validate that contract.
(2) The definition of policies regarding improper concerted acts, unfair
business practices, and resale price maintenance as referred to in paragraph (1)
may be dertermined and public notice given by the Fair Trade Comission.
Article 33
Restrictions on Conclusion of Unfair International Contracts.
Upon entering into an international contract, the enterpriser or enterprisers
organization may request that the Fair Trade Commission determine whether
the contract violates any provision of Article 32 (1) in accordance with the
procedure set forth by Presidential Decree.
Article 34
Corrective Measures
The Fair Trade Commission may, when an international contract violates or is
likely to violate the provisions of Article 32 (1), order the enterpriser or the
enterpriser organization concerned to cancel the contract, to amend or alter the
contract, or to take other necessary corrective measures.
Article 34-2
Surcharge
In the case of the conclusion of international contracts in violation of Article 32,
the Fair Trade Commission may impose upon the relevant enterpriser
organization surcharges up to but not exceeding 500 million won, or upon the
enterpriser concerned surcharges up to but not exceeding an amount equivalent
to two percent of turnover as determined by Presidential Decree; provided that
in the instance of an absence of turnover, surcharges may be imposed not
exceeding 500 million won.
[Enforcement Decree of the Monopoly Regulation and Fair Trade
Act]
CHPTER 5 Prohibition or Unfair Business Practice
Article 36
Designation of Unfair Business Practies
(1) The types of and criteria for Unfair Business Practices of Article
23(Prohibition of Unfair Business Practices), Paragraph (2) of the Act are as
listed in Appendix 1.
(4)
When it is deemed necessary, the Fair Trade Commission may establish
and publicly announce detailed standards of types of and criteria for Unfair
Business Practice of Paragraph (1) for the purpose of its application to a
particular area or act. In this case, the Fair Trade Commission shall hear the
opinion of the heads of relevant administrative agencies in advance.
Article 37
Fair Competition Code
When the Fair Trade Commission has received a request for the examination of
the Fair Competition Code under Article 23(Prohibition of Unfair Business
Practices), Paragraph (5) of the Act, the Commission shall notify the requester
of the examination results within sixty days of the request.
Appendices:
Types of and Criteria for Unfair Business Practices
[Related to Enforcement Decree Article 36, Paragraph(1)]
1.
Refusal to Deal
“Unreasonably refusing to transact” stipulated in the first half of Subparagraph
1 of Article 23 (prohibition on Unfair Business Practices) Paragraph(1) of the
Act means as follows.
(1) Collective refusal to deal
Without justifiable reason, in collusion with one’s competitors, one refuses to
initiate business with a certain enterprise; or suspends transaction or
significantly restricts the quantity or nature of commodities or service in
transaction with regard to a certain enterprise in a continuous transaction
relation.
(2) other types of refusal to deal
Unreasonably, one refuses to initiate business with a certain enterprises; or
suspends transaction or significantly restricts the quantity or nature of
commodities
or services in transaction with regard to with a certain enterprise
in a continuous transaction relation.
2.
Discriminatory Treatment
“Unreasonable discrimination against certain transaction partners”
stipulated in the second half of Subparagraph 1 of Article 23(Prohibition on
Unfair Business Practices)Paragraph (1) of the Act means as follows:
(1) Price Discrimination
Unreasonably, depending on the transaction partner or transaction territory, one
transacts at a significantly favorable or unfavorable price.
(2) Discrimination in terms and conditions of transaction
Unreasonably, one discriminates terms and conditions, such as quantity or
quality, significantly favorable or favorable or unfavorable toward a certain
Enterprise.
(3) Discrimination in favor of Affiliated Corporations
Without justifiable reasons, discriminating trading terms and conditions, such as
price, quantity or quality, significantly favorable or unfavorable toward certain
partners in order to benefit affiliated corporations.
(4) Collective discrimination
A group unreasonably discriminates for or against a certain enterprise, thereby
putting such Enterprise at a significant advantage or disadvantage.
3.
Elimination of Competitors
“Unreasonably excluding competitors” stipulated in Subparagraph 2 of Article
23 (Prohibition on Unfair Business Practices) Paragraph (1) of the Act means as
follows.
(1) Unjustifiable discount
One continues to supply one’s commodities or services at a price considerably
lower than the supply cost without a justifiable reason or to supply commodities
or services at an unduly lower price, thereby threatening the viable existence of
one’s competitors or competitors of its Affiliated Corporations.
(2) Unjustifiably high-Priced purchase
Unjustifiably, one purchases commodities or services at a higher cost than the
normal transaction price, thereby threatening the viable existence of one’s
competitors of its Affiliated corporations.
4.
Unfair Luring of Customers
“Unreasonably luring customers of competitors to deal with oneself” as
stipulated in the first half of Subparagraph 3of
Article 23(Prohibition on Unfair
Business Practices)Paragraph (1) of the Act means as follows:
(1) Luring customers by promising unjustifiable gains
One Provides or Promise to provide unjust or excessive gains in light of the
normal business practices and thus lures away competitor’s customers.
(2) Luring customers by fraudulent means
Other than through labeling or advertising provided for in Subparagraph 9,
mislead competitors’ customers by falsely claiming that the content, terms and
conditions, or other transactional matters involving ones commodities or
services are significantly superior to or much more advantageous than thy
actually are or those of competitors; or that the content, terms and conditions,
or other transaction matters involving the competitors commodities or services
are significantly less advantageous than or inferior to what they actually are or
those of one’s own commodities of services, thereby luring away the customers
of one’s competitors.
(3) Luring customers by other methods
Unduly hinder transactions between a competitor and its customers by impeding
the execution of contracts or by encouraging such customers to breach the
contracts, thereby luring away the competitors’ costomers.
5.
Coercion in Dealing
“Unreasonably coercing customers of competitors to deal with oneself” as
stipulated in the second half of Subparagraph 3 of Article 23(Prohibition on
Unfair
Business Practices) Paragraph(1) of the Act means as follows:
(1) Tie-in Sales
In supplying one’s commodities or services to a transaction partner, one forces
the partner wrongfully, in light of the normal business practice, to purchase
another commodity or service from oneself or from an enterprise whom one
designates.
(2) Sales to employees
Wrongfully, one forces one’s or one’s Affiliated Corporation’s officers or
employees to purchase or sell one’s or the Affiliated Corporation’s commodities
or services.
(3) Other types of coercion
One offers one’s transaction partner undue terms and conditions and other
disadvantages in light of normal practice and thus forces the partner to transact
with oneself or an enterprise whom one designates.
6.
Abusing Dominant Position
“Unreasonably taking advantage of one’s bargaining position in transaction with
others” as stipulated in Subparagraph 4 of Article 23(Prohibition on Unfair
Business Practices) Paragraph (1)of the Act means as follows:
(1) Coercion to purchase
One forces one’s transacting partner to purchase commodities or services
which the partner does not with to purchase.
(2) Coercion to provide benefit
One forces one’s transacting partner to provide one with economic benefits
such as money, commodities or services.
(3) Coercion of sales target
Concerning the commodities or services which one supplies, one designates to
one’s transacting partner a target for their transaction and forces the partner to
fulfill the target.
(4) Offering disadvantages
By methods other than those in the above subparagraph 1 to 3, one establishes
or alters transaction conditions to the disadvantages of one’s transaction
partner, or gives the partner disadvantages in the execution process of the
transaction.
(5) Interference in management
Interfering in the management activities of transaction partners by requiring
one’s approval or directions in hiring or firing officers or employees of the
transacting partner, or by restricting manufacturing articles, scale of facility,
production quantity or content of transaction.
7.
Transaction Based upon Restrictive Conditions
“Transacting with others on terms and conditions which unreasonably restrict
business activities” as stipulated in the first half of Subparagraph 5 of Article
23(Prohibition on Unfair Business Practices) Paragraph (1) of the Act means as
follows:
(1) Exclusive Dealings
Wrongfully, one transacts with an enterprise on the condition that the enterprise
does not deal with one’s competitor or an Affiliated Corporation’s competitors.
(2) Restriction on transaction area or partner
Transact with a partner on the undue condition that the partner limits its
transaction area or partner(s).
8.
Interference in Business Activities of Other Enterprises
“Acts which unreasonably disrupt business activities of other Enterprises”
as stipulated in the second half of Subparagraph 5 of Article 23(Prohibition on
Unfair Business Practices) Paragraph (1) of the Act refers to any of the
following acts:
(1) Unfair use of technology
Unduly using the technology of other Enterprise to the point of seriously
hampering the business activities thereof
(2) Unfair luring or hiring of personnel
Unjustifiably luring away or hiring the personnel of other Enterprise to the point
of seriously hampering the business activities thereof.
(3) Interference in the change of transacting partner
Unjustifiably interfering in the change of transaction counterpart of other
Enterprise, to the point of seriously hampering the business activities thereof.
(4) Interference by other methods
Interfering with business activities of other Enterprise through unjustifiable
means other than those in Subparagraphs 1 to 3 to the point of seriously
hampering the business activities thereof.
9.
<Deleted June 30, 1999. Enacted by the Enforcement Decree of Fair
Labeling and Advertising>
10. Undue financial, asset, and manpower support
The following acts constitute unreasonably “providing Specially Related Persons
or other corporations with temporary payment, loan, manpower, real estate,
securities, intangible property rights, etc., or aid Special Related Person or
other corporations by trading at extremely favorable terms” in Subparagraph 7
of Article 23(Prohibition on Unfair Business Practices) Paragraph (1) of the Act.
(1) Undue financial support
Aid a Specially Related Person or other corporations through the provision of
excessive economic benefit by providing or transacting them with funds, such
as temporary payment, loan, etc., at substantially high or low costs or by
providing or transacting with such funds in substantial amounts.
(2) Undue asset support
Aid a Specially Related Person or other corporations though the provision of
excessive economic benefit by providing or transacting them with assets, such
as real estate, securities intangible property rights, etc., at substantially high or
low costs or by providing or transacting with such assets in substantial amounts.
(5) Undue manpower support
Aid a Specially Related Person or other corporations through the provision of
excessive economic benefit by providing them with manpower at substantially
high or low costs or by providing such manpower in substantial amounts.