The Fair Trade Commission said Thursday it is reviewing easing rules on the designation of large business groups to reduce the number of conglomerates under strict antitrust regulations.
The watchdog’s intention to review these rules came just a few days after President Park Geun-hye said in a meeting with local media that the rules on the designation of conglomerates should be changed “in line with reality,” publicly citing Kakao Corp., which was recently included in the FTC watch list.
Fair Trade Commission at Sejong City (Yonhap)
Currently, the FTC puts conglomerates with assets exceeding 5 trillion won ($4.3 billion) on the large business group watch list that restricts equity investments and inter-affiliate loan guarantees.
“We are reviewing all possible options such as raising the asset threshold from the current 5 trillion won,” Kim Jeong-kee, director of the business group division at the FTC, told The Korea Herald.
“We haven’t come up with a detailed number on how much we will raise, though. Other options include putting top 30 conglomerates by assets on the list,” he said.
Since March last year, the Federation of Korean Industries, an association of 236 large business groups and companies, have repeatedly called for a hike of the asset threshold to higher than 10 trillion won.
If the asset threshold is raised to 10 trillion won, the number of business groups under the watch list will fall to 37 from the current 65. Some companies including messenger app operator Kakao and bio-pharmaceutical firm Celltrion Inc. will also be excluded from the large business group watch list.
To increase the asset threshold, the FTC should seek a revision to the decree enforcing the antitrust and fair trade law.
In April, 2008, the watchdog revised the decree to raise the asset threshold from 2 trillion won to 5 trillion won, reducing the number of big companies on the watch list from 79 in 2008 to 48 in 2009.
Over eight years, until recently, the number on the list rose to 65 with more companies with assets exceeding 5 trillion won included.
Another option of putting the top 30 companies by assets on the list requires a revision bill, which needs a parliamentary approval.
Earlier in April, the FTC’s announcement to include Kakao and five other companies in the new list of 65 business groups sparked outcry that it was not fair for relatively smaller players to be subject to the same regulations imposed on giant groups such as Samsung with 348 trillion won assets.
Kakao executive vice president Hong Eun-taek said in a forum on Monday that the company has come under 76 new regulations since it was included on the FTC watch list as of April 3.
“The company’s future attempts to acquire a prospective start-up in the IT sector will face a setback due to the new regulations,” Hong said.
By Kim Yoon-mi (yoonmi@heraldcorp.com)