Fair Trade Commission (South Korea)

Fair Trade Commission
Emblem of the Korea Fair Trade Commission
Hangul	공정 거래 위원회
Hanja	公正去來委員會
Revised Romanization	Gongjeong Georae Wiwonhoe
McCune–Reischauer	Kongjŏng Kŏrae Wiwŏnhoe

Headquarters in Sejong City

The Korea Fair Trade Commission (KFTC) is South Korea's regulatory authority for economic competition. It was established in 1981 within the Economic Planning Board. The establishing law was the Monopoly Regulation and Fair Trade Act (MRFTA), Law No. 3320, December 31, 1980. In 1994, the Fair Trade Commission and its Secretariat were separated from the Economic Planning Board as an independent vice ministerial-level, central administrative organization. In 1996, the status of the KFTC Chairman was elevated from vice-ministerial to ministerial level.

Organization

The original KFTC had five commissioners from 1981 to 1990. This was increased to seven commissioners from 1990 to 1997. Since 1997 the KFTC has had nine commissioners, which includes a Chairman, a Vice-Chairman, and three other standing commissioners. There are four non-standing commissioners. The KFTC is supported in its work by a Secretariat.

The current KFTC Chairman is Jeong Jae-Chan.

Enforcement

Apart from the MRFTA, the KFTC enforces the following statutes:

Adhesion Contract Act, Law No. 3922, December 31, 1986.
Fair Labelling and Advertising Act, Law No. 5814, February 5, 1999.
Omnibus Cartel Repeal Act, Law No. 5815, February 5, 1999.
Door-to-Door Sales Act, Law No. 4481, December 31, 1991.
Installment Transactions Act, Law No. 4480, December 31, 1991.
Fair Subcontract Transactions Act, Law No. 3799, December 31, 1984.
Fair Franchise Transactions Act, Law No. 6704, May 13, 2002.
Consumer Protection in Electronic Commerce Act, Law No. 6687, March 30, 2002.

Cases tackled

Microsoft decision

On December 7, 2005, the KFTC reached the decision to order Microsoft Corporation and Microsoft Korea, inter alia, to unbundle certain tied products, including Windows Media Player and MSN Messenger, and to impose surcharges amounting to 33 billion won (31 million US dollars) for violation of the Monopoly Regulation and Fair Trade Act (MRFTA), including the abuse of market dominant position provision. On October 16, 2007, the Associated Press reported that Microsoft has stopped appealing the December 2005 decision and has withdrawn the appeal.

2011 music price fixing scandal^[1]

On February 28, 2011, the KFTC declared, "Through a meeting held from February 23rd through the 25th, we have decided to take appropriate action against the following 15 online music-related companies: SK Telecom, LOEN Entertainment, KT, KT Music, Mnet Media, Neowiz Bugs, Sony Music Entertainment Korea, Universal Music, Warner Music Korea, Yejeon Media, Pony Canyon Korea, S.M. Entertainment, SBS Contents Hub, King Pin Entertainment, Direct Media."

The FTC alleged that the companies decided to rig the market once non-DRM (digital rights management) digital songs were allowed to be downloaded, starting May 2008 (previously, only DRM songs were allowed on the market). Non-DRM songs allow for infinite downloads, which led companies to discontinue products and certificates that catered to non-DRM songs. Thirteen of the companies listed above also stopped distributing songs to services which offered infinite downloads, thus rigging the market.

A representative of the FTC revealed, "In order to block competition coming from smaller businesses, the companies listed above rigged their own prices. By rigging the prices in compliance with one another, they placed great harm on the consumers and other businesses in the industry. Indeed, by equalizing the prices of their products, they've made the music industry believe that such a phenomenon was permanent. They have completely set up a blockade against the production of products that fit in different price categories. This is a violation of the consumer's right of choice."

The representative continued, "With this action, we hope that consumers will be able to spend less in order to enjoy a greater diversity of products. This is the first action being taken for the online music industry. No one is free when prices are rigged, so we hope other companies support this effort."

Recommendations

The fines for each company are:

SK Telecom (fined $1.96 million)
LOEN Entertainment (fined $9.69 million)
KT (fined $811,000)
KT Music (fined $1.16 million)
Mnet Media (fined $1.98 million)
Neowiz Bugs (fined $1.11 million)
Sony Music Entertainment (fined $1.19 million)
Universal Music (fined $814,000)
Warner Music Korea (fined $96,000)

Five of the above companies (SK Telecom, LOEN Entertainment, KT Music, Mnet Media, and Neowiz Bugs) will be formally accused of their crimes.

LOEN Entertainment's CEO Shin Won-soo, KT Music's CEO Kim Min-wook and Mnet Media's CEO Kim Sung-soo will be prosecuted separately.

References

↑ neefa (March 1, 2011). "Korea's Fair Trade Commission fines 15 music distributors for collectively rigging prices". allkpop. Retrieved October 4, 2013.

External links

Ministries of the Republic of Korea

	State Council

	Office of the President Office of National Security Presidential Security Service Audit and Inspection National Intelligence Korea Communications Commission

	Prime Minister's Office Office for Government Policy Coordination Prime Minister's Secretariat Financial Services Commission Fair Trade Commission Anti-Corruption and Civil Rights Commission Nuclear Safety and Security Commission

	Strategy and Finance Education Science, ICT and Future Planning Foreign Affairs Unification Justice National Defense Interior Culture, Sports and Tourism Agriculture, Food and Rural Affairs Trade, Industry and Energy Health and Welfare Environment Employment and Labor Gender Equality and Family Land, Infrastructure and Transport Oceans and Fisheries Public Safety and Security

	Personnel Management Government Legislation Patriots and Veterans Affairs Food and Drug Safety

Economy of South Korea

History	Chaebol 1997 Asian financial crisis Four Asian Tigers Five-Year Plans of South Korea Heavy-Chemical Industry Drive Miracle on the Han River

Currency	Won (1945–1953) Hwan (1953–1962) Won (1962–) Korea Minting and Security Printing Corporation Bank of Korea

Industry and business	Automotive industry Companies Energy Exports Financial services Fishing industry Markets Real estate Rice production Trade unions Korea National Oil Corporation

Government agencies	Fair Trade Commission Korea Forest Service Financial Services Commission Financial Supervisory Service Korea Deposit Insurance Corporation National Information & Credit Evaluation Korea Investment Corporation Korea Transportation Safety Authority Small and Medium Business Administration

Employment and tax	Companies

Infrastructure and transport	Trans Korea Pipeline South–North Pipeline Korea Driving license

Rankings	International rankings Regions by GDP

Finance and banking	Korea Exchange KOSDAQ KRX 100 KOSPI Banks

Free Trade Agreements	ASEAN EFTA India Peru European Union United States Australia Vietnam

Energy	National RD&D Organisation for Hydrogen and Fuel Cell Programme Nuclear power Nuclear research programs

Other	European Union Chamber of Commerce in Korea Korea Financial Investment Association Kimchi bond Korea Non-Life Insurance Association Korea Oil & Petroleum Association

See also: Economy of North Korea

This article is issued from Wikipedia - version of the Saturday, April 30, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.