Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

Articles 7 and 12 of the MRFTA outline the substantive standards for anticompetitive business combinations and notification requirements. The Enforcement Decree of the MRFTA provides additional regulations concerning the authorities and standards for merger control. …

Context

Articles 7 and 12 of the MRFTA outline the substantive standards for anticompetitive business combinations and notification requirements. The Enforcement Decree of the MRFTA provides additional regulations concerning the authorities and standards for merger control.

Business combinations that are subject to merger control include (Articles 7(1) and 12(1) of the MRFTA) acquisition or ownership of 20% or more of the shares of another company (or 15% for companies listed on the Korea Exchange) or acquisitions of additional shares in a company where the acquiring party already holds 20% or more of the shares in the company and the acquisition results in the acquiring party becoming the largest shareholder.

It includes also interlocking directorates, mergers with other companies, assets or business acquisitions or joint ventures. Only the investor with the largest stake of a new company or joint venture is required to notify.

Concept of concentration

Since 19 October 2017, the general thresholds for notification are as follows:

- one party to the transaction has worldwide assets or turnover of a least KRW 300 billion (EUR 213 million)

- the other party has total assets or annual turnover of at least KRW 30 billion (EUR 21.6 million).

Moreover, local thresholds are applied to overseas mergers, including transactions where either:

- a foreign company acquires another foreign company;

- a Korean company acquires a foreign company.

If each of these merging parties has local sales revenues of at least KRW 30 billion (EUR 21.6 million) in the Korean market, notification of the merger is mandatory.

Thresholds

Article 7(4) of the MRFTA prohibits a merger where it substantially restricts competition. A substantial restriction of competition is presumed if the combined market share of the parties:

- meets the requirements for a dominant position;

- is the largest in the relevant business area;

- exceeds the market share of the company with the second largest market share by not less than 25%.

The KFTC Merger Guidelines establish a safe harbor based on the Herfindahl-Hirschman Index (HHI). A horizontal merger is presumed not to lessen competition where: - the post-merger HHI is less than 1,200; - the post-merger HHI is 1,200 or more or less than 2,500 and the post-merger increase in the HHI is less than 250; or - the post-merger HHI is 2,500 or more and the post-merger increase in the HHI is less than 150.

In addition, on 27 February 2019, the KFTC released amendments to the Merger Guidelines relating to innovation-based industries and big data. 

Global Competition Law

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Les notions juridiques connexes

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Les notions juridiques connexes

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