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Malfeasant Competition

In order to protect the market forces, consumer rights and to promote fair competition, Fair Trade Law restricts the following activities and imposes civil, criminal and administrative liabilities on companies that manipulate the market for unfair economic advantage.

(1) Monopolies

Monopoly refers to any enterprise that faces no competition or has a dominant position in the market that enables it to exclude other potential competitors. Furthermore, two or more enterprises shall be deemed as monopolies if they do not engage in price competition with each other and, as a whole, have the same status as a monopoly. The law does not prohibit acquisitions but it condones abuse of monopolistic market power. Furthermore, the Fair Trade Law does not prohibit mergers as long as certain conditions are fulfilled by the contracting parties and filed with proper authorities to demonstrate that a merger would not produce a monopoly.

(2) Concerted Action

Concerted Action refers to two or more enterprises that willingly enter into a contract, agreement or any other form of mutual understanding to jointly determine prices of goods or services, or to limit the terms of quantity, technology, products, facilities, trading counterparts, or trading territory with respect to certain goods and services. The Fair Trade Law prohibits concerted action, except under certain circumstances approved by competent authority when done for the benefit to the whole economy and public good.