So-called Vertical Dimension in the Cartel Case

Abstract

The Korea Fair Trade Commission have long stuck to law enforcement policy that Article 19 of the Monopoly Regulation and Fair Trade Act which prohibits anticompetitive concerted practices applies to horizontal agreements only, while most anti-competitive vertical agreements have been judged by ‘the likelihood to impede fair trade’ standard under Article 23. This does not, however, have any statutory ground or antitrust policy justification. Such law enforcement approach to vertical restraints may make prohibition on unreasonable concerted practices under the MRFTA insufficient and cause unnecessary confusion in regulating unilateral conduct under the Act. Fortunately, the KFTC and courts which reviewed the KFTC’s decisions recently showed signs of changes where a non-horizontal agreement was in issue. However, this does not seem enough to change antitrust rules governing vertical restraints under the MRFTA in near future. A consistent and systematic approach is requested for establishing the clear distinction between concerted and unilateral conduct under the Korean antitrust law regime by restoring law enforcement against anti-competitive vertical agreements as an unreasonable concerted practice. In process of such development, of cause, a due respect should be paid to predictability on the side of business communities.