Recounting the History of the Undue Support Clause's Enforcement: Lessons for Competition Law & Policy

Abstract

The Undue Support Clause in the Monopoly Regulation and Fair Trade Act of Korea purports to directly regulate related party transactions, making the provision unique within the conventional antitrust lexicon. Due to its rather unconventional nature, the Undue Support Clause has had to endure withering criticism throughout its existence under the MRFTA. Meanwhile, the provision’s enforcement history has been no less torturous, resulting in both significant regulatory achievements and spectacular failures. Nearly two decades have passed since the enactment of the Undue Support Clause, providing a wealth of experience from which meaningful lessons can be drawn for competition law and policy. The fact that the Undue Support Clause is a unique feature of Korean competition law and that its experience in enforcing the provision is a rarity in the antitrust world, makes such lessons invaluable. This paper is an attempt to discern some of these lessons by examining three major phases of enforcement throughout the history of the Undue Support Clause.

Keywords: Korea, Competition, Antitrust, Law, Undue Support, Tunneling, Funneling, Enforcement