Fair Trade Com­mis­sion urged to pro­mote com­pe­ti­tion

The Korea Times - - BUSINESS - By Yoon Ja-young yjy@ko­re­atimes.co.kr

Fair Trade Com­mis­sion (FTC) Chair­man Kim Sang-jo vowed to con­tinue re­form­ing con­glom­er­ates, on top of root­ing out power abuse over weaker com­peti­tors. How­ever, he is fac­ing crit­i­cism that the FTC has been neg­li­gent in pro­mot­ing com­pe­ti­tion.

“I want to ask the con­glom­er­ate owner fam­i­lies to sell off their stakes in af­fil­i­ates that aren’t re­lated with the group’s core busi­ness,” he said at the meet­ing with re­porters, Thurs­day, mark­ing one year since his ap­point­ment.

He warned that the FTC would not tol­er­ate con­glom­er­ates’ un­fair prac­tices of sup­port­ing sub­sidiaries to fat­ten the wal­lets of the owner fam­i­lies who are their ma­jor share­hold­ers.

“They evade the law in or­der to hand over man­age­rial con­trol to their ju­niors, on top of de­stroy­ing the ecosys­tem of SMEs and small merchants. We will firmly ex­e­cute laws to make sure such prac­tices are not tol­er­ated any­more.”

Dubbed “chae­bol sniper” for his ded­i­ca­tion to small share­holder ac­tivism to re­form chae­bol, the for- mer pro­fes­sor was ap­pointed as the con­trol tower of the “fair econ­omy,” one of the key eco­nomic strate­gies of the Moon Jae-in ad­min­is­tra­tion along with in­come-led and in­no­va­tive growth. Backed by the trust of Pres­i­dent Moon, the iconic fig­ure of re­form greatly im­proved the sta­tus of the FTC.

He vowed to re­form chae­bol, set­ting up a bu­reau in charge of mon­i­tor­ing them. How­ever, he faced crit­i­cism from both sup­port­ers and op­po­nents. While there is crit­i­cism that too much pres­sure on chae­bol is hin­der­ing their in­vest­ment, NGOs are de­mand­ing he should speed up the pace of re­form.

The chair­man stressed that con­glom­er­ates should get rid of un­fair prac­tices such as fore­go­ing writ­ten con­tracts for sup­pli­ers or forc­ing them to sub­mit data re­lated with their key tech­nolo­gies.

He also paid at­ten­tion to sec­tors pre­vi­ously over­looked by the FTC, such as fran­chise and re­tail in­dus­tries as well as small sup­pli­ers and sales agen­cies.

For in­stance, the com­mis­sion stopped a fran­chise head­quar­ters’ prac­tice of forc­ing fran­chisees to pur­chase diverse items such as in­gre­di­ents and uten­sils from head­quar­ters at higher prices.

How­ever, mar­ket watch­ers point out that the FTC has been rel­a­tively neg­li­gent in its core task of protecting com­pe­ti­tion in the mar­ket, such as get­ting rid of mo­nop­o­lies and the abuse of power by dom­i­nant play­ers.

Kim said he is aware of such crit­i­cism.

“As the re­form of power abusers and chae­bols re­ceived rel­a­tively more at­ten­tion, I am aware of the con­cern that the FTC has been in­ac­tive in its key role of pro­mot­ing mar­ket com­pe­ti­tion.”

He said that he will fo­cus on in­no­vat­ing reg­u­la­tion and ex­e­cut­ing a fair trade act for in­no­va­tive growth and pro­mo­tion of com­pe­ti­tion. He said the FTC will fo­cus on sec­tors such as agri­cul­tural whole­sale mar­kets and apart­ment main­te­nance ser­vices, where mo­nop­o­lies are preva­lent and con­sumer com­plaints have surged, to pro­mote com­pe­ti­tion.

Kim Sang-jo FTC chair­man

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