Abuse of Market Dominance in Korea: Competition Law in Korea

The Seoul Central District Court ruled earlier this year that Namyang Dairy Products Co. (“Namyang”) was in violation of the Monopoly Regulation and Fair Trade Act of Korea by abusing its market dominance and “unfairly taking advantage” of retailers. For more articles on Koran Antitrust Law please see: Korean Antitrust Law.

Namyang, a major Korean dairy company, was accused by retailers of, among other things, forcing retailers to purchase expired or soon-to-expire products and purchase unpopular products. The Seoul Central District Court in 2014GaHab592238 ruled the company was in violation of Article 23 of the Monopoly Regulation and Fair Trade Act of Korea and awarded damages to the plaintiffs.

Monopoly Regulation and Fair Trade Act of Korea Article 23(1), no. 4 prohibits a company or individual from:

“Trading with a certain transacting partner by unfairly taking advantage of his/her position in trade.”

The Court held, in short, that Namyang compelled retailers to purchase expired products and less popular products via, inter alia, threatening not to deal with retailers and placing unwanted items on an online list of products ordered by these retailers even though these retailers never ordered the products.

This tactic, in Korea, is referred to as mireonaegi in Korean. Some manufacturers push products on retailers even though the manufacturers know the product shall expire and, thus, shall not be able to be sold by the retailer. Thus, the manufacturers are simply trying to pass a loss onto the retailer.

Namyang has been accused of this practice numerous times over the last few years. Another article on this issue may be found at: Namyang Agrees to Compensate Agents.

We shall be writing, over the next few months, numerous articles on Korean Competition/Antitrust Law. Please check back.
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Sean is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.

Sean is ranked, by AsiaLaw for Korea, as one of only two non-Korean lawyers as a Top Attorney. Sean is known for his proactive New York-style street-smart advice and his aggressive and non-conflicted advocacy. Sean works with some of the leading retired judges, prosecutors and former government officials in Korea.

Sean’s profile may be found at: Sean C. Hayes