2. Business Model Legality/ Regulatory Approval Investigation

Q5 (Scope of Antimonopoly Law)

What does the Antimonopoly Act regulate?

The objective of the Antimonopoly Act is to promote fair and free competition and to preserve unrestricted activities based on the independent judgment of businesses. Based on this objective, the Antimonopoly Act prohibits (1) private monopoly, (2) unreasonable restraint of trade, and (3) unfair trade practices.

A private monopoly means acts to monopolize a market, by using an unreasonably low sales price to eliminate competitors from the market and to prevent new entrants into the market (exclusionary private monopoly) or acts to control a market, by acquiring stock and taking other actions to restrict another company’s business activities (control private monopoly).

Unreasonable restraint of trade includes so-called cartels and collusion.

Unfair trade practices means patterns of behavior that threaten fair competition, such as refusal to deal, transactions with exclusivity conditions, transactions with restrictive conditions, resale price maintenance, abuse of dominant bargaining position, fraud in the inducement and dumping.

(Posted: January 27, 2012)