New KFTC chief looks to lawmakers to support chaebol reform as he sets out agenda
Listen in as MLex Managing Editor for Asia David Plott and Seoul Senior Regulatory Correspondent Danbee Lee discuss new aims for antitrust enforcement by the KFTC in South Korea following appointment of its new chairman. We also discuss the KFTC's fine against Qualcomm and the company's upcoming challenge to the ruling.
14 June 2017. By Danbee Lee.
Kim Sang-jo, the newly appointed chairman of the Korea Fair Trade Commission, has the called on the National Assembly for its cooperation and support as the regulator plans legislative changes and reform of the country's all-powerful conglomerates.
Kim was speaking at his inauguration ceremony, held today at the KFTC's headquarters, after a confirmation process that saw some foot-dragging by lawmakers from the party of impeached former president Park Geun-hye.
Kim said a big gap existed between the legal foundations upon which the KFTC operated and what society demanded from it. He said the KFTC's ultimate role as an antitrust agency was to boost market competition to increase consumer welfare, but that the public wanted it to play an extended role in protecting the economically vulnerable. That shortfall in meeting public expectations had led to much criticism of, and disappointment in, the KFTC, he said. Kim said that in order to address the issue, the KFTC needed to establish sound cooperation mechanisms with other agencies.
He said much legislation would need to be revised, and that other laws would need to be drafted, to fulfill his ambitious agenda. Kim's plans include such steps as abolishing the KFTC's exclusive right of referral to prosecutors, introducing punitive damages, strengthening criminal and civil regulations, and allowing private legal action to seek injunctions. He said none of those changes could be brought about without the National Assembly's cooperation, and that securing that cooperation would be the most challenging task of his chairmanship.
Kim also said that strict enforcement of existing law and the setting up of a new conglomerate investigation division would not come about as a result of the regulator's efforts alone, and would again depend on the National Assembly's willingness to work with the agency.
The new KFTC chief said that although there had been concerns over reforms targeting chaebols — South Korea's family-owned conglomerates — the process would not be rushed due to the extensive networks of public and private interests involved. He said the agency would conduct detailed research and draft reasonable measures to usher in appropriate regulatory changes, and that it would share details of its chaebol reform plans when they had taken shape.
Kim said it was important that the regulator maintained an impeccable record on ethics and integrity, as even minor lapses would sow doubt over the fairness of its case-handling processes. He said that if necessary, he would consider changing the agency's existing task manuals and internal standards
The incoming chief warned KFTC employees to refrain from external contact with the agency's former employees and with lawyers, which could unintentionally result in leaks. He suggested that setting up a record of personal contacts could help boost the KFTC's credibility and transparency, even though keeping such a log could be burdensome.
Kim pledged that the KFTC would not waver in its efforts to foster a fair market economy and ensure fair competition, and that under his leadership, there would be no retreat from those aims.