[The Editors' Verdict] The Line of Government Control That Must Not Be Crossed

Government intervention is generally considered justified in sectors with strong public interest, such as finance and telecommunications. However, there are two conditions: the intervention should not be unlimited, and the judgment that a sector has a ‘public good nature’ should not be applied indiscriminately.

It is desirable and ultimately necessary for the government to consider measures to promote competition in industries that easily earn profits under oligopolistic structures. However, recently, there have been concerns as the government’s actions seem to have crossed the line in terms of degree and scope. A representative example is the ruling party’s behavior surrounding the appointment of the KT CEO. Among 33 candidates, including many ruling party figures, only four current or former KT executives passed the first screening, prompting lawmakers from the People Power Party to hold a press conference on the 2nd to publicly express their opposition. This was a bold and unprecedented move, showing no concern for controversy over government control.

The situation worsened when the Presidential Office added its voice. Despite growing criticism, a senior official from the Presidential Office privately told reporters that "reform is impossible with internal KT personnel." If the CEO appointment proposal is rejected at the KT shareholders’ meeting at the end of March, it is only natural to suspect an intention to restart the appointment process with outsiders, including ruling party figures.

The widespread expectation that the National Pension Service, KT’s largest shareholder and not free from government influence, will be used in this process cannot be dismissed as mere speculation. After President Yoon Suk-yeol stated in January that "companies with dispersed ownership should have the so-called Stewardship Code (active exercise of voting rights by institutional investors) in operation," such movements have intensified. Not only KT but also other companies with dispersed ownership, such as financial holding companies, have seen pro-government figures appointed as chairpersons, and it is widely expected that POSCO may face similar controversies in the future. This is considered a natural progression rather than an exception.

The government’s awareness of problems with opaque CEO appointment procedures, such as blind self-renewals, is appropriate. However, attempts to resolve these issues must be carried out within institutional boundaries that respect the order of the private market. The current blatant and bold actions of the ruling party can only be interpreted as a determination to continue government control until they succeed in rewarding election supporters, leaving no grounds to deny such misunderstandings.

It is even more serious that the shadow of such government control has begun to extend beyond telecommunications and finance into general private market sectors. When soju prices fluctuated, the Deputy Prime Minister intervened, sending a message to the liquor industry to refrain from price increases, and the Ministry of Economy and Finance immediately launched an investigation. The National Tax Service also joined in. The Minister of Agriculture, Food and Rural Affairs summoned food company representatives to pressure them to hold back on price hikes. As a result, the food industry withdrew their price increase plans one after another, but no one believes this was a natural business decision.

Good intentions do not justify all means. The government’s plan to ease the burden on ordinary citizens must be approached institutionally within limits that do not undermine market functions and autonomy. For the Yoon Suk-yeol administration’s intention to promote competition while respecting market order to be realized as planned, the temptation of government control must stop here.