News and developments
Proposed Amendment of the Monopoly Regulation and Fair Trade Act
After gathering feedback from the public, the KFTC plans to finalize and submit the Proposed Revisions to the National Assembly for final consideration during the first half of 2023.
Following are certain details of the Proposed Revisions:
If you have any questions regarding this article, please contact below: Hwan JEONG ([email protected]) Suruyn KIM ([email protected]) Frank S. SHYN ([email protected]) For more information, please visit our website: www.leeko.com
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Expansion of Merger Notification Exemption
- Intra-group transaction: Currently, asset/business transfer, statutory merger and consolidation between affiliates are subject to merger notification if the size-of-parties test is met. The Proposed Revisions will exempt a transaction between two transacting companies where one company already has sole control over the other company through a direct shareholding of at least 50%. In addition, currently in the case of statutory merger and consolidation between affiliates, when calculating the asset and the worldwide sales of the counterparty company which will be merged or consolidated, the asset and the worldwide sales of the affiliates were included. However, to prevent double-counting, only the asset and worldwide sales of the counterparty company will be taken into account, not including those of the affiliates, under the Proposed Revisions.
- Establishment of PEF: Under the Proposed Revisions, the establishment of a PEF will be exempt from merger notification as such establishment does not affect competition in the relevant markets. However, acquisition of companies by a PEF will remain subject to merger notification even after the Proposed Revisions take effect.
- Interlocking directorate: The Proposed Revisions will exempt interlocking directorate of less than 1/3 of directors of the counterparty company as a company will not have control over the counterparty company through such interlocking directorate. However, interlocking directorate will remain subject to merger filing under the Proposed Revisions if the representative director of the counterparty company is one of the interlocking directorates.
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Introduction of Commitment Procedure for Merger Control
- To enable swift and effective review of anti-competitive M&As, under the Proposed Revisions, a company may submit officially the proposed remedy to the KFTC to address the anti-competitive concern, and the KFTC may approve conditionally the transaction if the proposed remedy sufficiently addresses the anti-competitive concern raised by said transaction.
- To ensure implementation of the remedy, under the Proposed Revisions, the KFTC is authorized to withdraw the conditional approval and impose a corrective order if a company obtains conditional approval by wrongful means or fails to implement the remedy.
- Once the Proposed Revisions are passed by the National Assembly, the KFTC plans to enact sub-regulations such as KFTC guidelines to establish swift and simple procedures to be applied to the process for conditional approval.
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Conclusion
If you have any questions regarding this article, please contact below: Hwan JEONG ([email protected]) Suruyn KIM ([email protected]) Frank S. SHYN ([email protected]) For more information, please visit our website: www.leeko.com