'Consent Decree = Favoring Companies' Criticism Due to Poor Implementation Management
Enhancing Effectiveness of Implementation Plan Management and Supervision
[Sejong=Asia Economy Reporter Joo Sang-don] "The criticism that the consent decree system favors companies stems from lax management and supervision regarding whether companies properly fulfill their promised measures. Going forward, the Korea Fair Trade Mediation Agency will oversee implementation management, and to increase the effectiveness of this management, the agency must participate from the moment this procedure begins."
Kim Hyung-bae, President of the Korea Fair Trade Mediation Agency, recently emphasized in an interview with Asia Economy the need to enhance the effectiveness of consent decree implementation management. The consent decree system was introduced in December 2011 as part of the Korea-US Free Trade Agreement (FTA) implementation measures. If the corrective measures proposed by the business operator are reasonable, the system allows for the swift conclusion of cases without confirming illegality. Recently, Apple Korea, which was under investigation by the Fair Trade Commission for allegations of 'gapjil' such as shifting iPhone advertising and free repair costs to mobile carriers, presented a coexistence support plan worth approximately 100 billion KRW through this system.
He believes that to improve the effectiveness of the 'consent decree implementation management' scheduled to be conducted by the Mediation Agency starting this year, the agency should participate from the consent decree initiation decision stage, where various implementation measures are included. For example, if the implementation plan includes conditions such as selling certain parts due to concerns about market monopoly, setting the sale deadline too short could make implementation impossible. Also, if the budget for experts essential for management and inspection in each field is set too low during the preparation of the implementation plan, thorough verification may be difficult.
President Kim stated, "If management and supervision are conducted only after the consent decree is finally confirmed, understanding of the corrective measures may be insufficient, and there could be issues where measures that are practically difficult to supervise are included in the implementation plan." He added, "The Mediation Agency, as the subject of implementation management, plans to actively negotiate to participate in the establishment of the consent decree plan." He also mentioned plans to hold a seminar jointly with the Fair Trade Commission around September this year to discuss these measures.
The Mediation Agency is also reviewing the appropriateness of corrective measures in consent decree cases related to corporate mergers previously confirmed by the Fair Trade Commission. In 2015, the Fair Trade Commission approved the merger between Microsoft (MS) and Nokia, prohibiting patent fee increases to domestic smartphone manufacturers for seven years. President Kim said, "The attached conditions indicate concerns about potential abuse of market dominance in the future, prohibiting fee increases for a certain period." He added, "We plan to analyze the market environment at the time of the consent decree decision and the current situation to examine whether the corrective measures were appropriate, creating reference materials to help the Fair Trade Commission prepare suitable corrective measures in the future."
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