Price Fixing in Korea: Will FTA’s Lower Consumer Prices in Korea?

As booze and babies illustrate in today’s newspapers, the consumer price impacts by the EU & US FTAs may have been blown way out of proportions by both proponents and opponents of these trade treaties. The big price inflators are, normally, not duties but distribution costs and sometimes excise taxes. In time, some of the new import price savings resulting from tariff reductions may be passed on to consumers as more importers and distributors provide Korean consumers with foreign goods. But that will happen only so long as the marketplace is competitive, free of price fixing. In the main part, however, probably the greatest consumption boosts may be found to be more psychologically than financially based. That is, consumers come to expect foreign goods to now be cheaper and more affordable — and consequently begin shopping, often for the very first time. Those consumers already familiar with foreign products are

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Korean Price-Fixing Law: Defining the Relevant Market in Korea Antitrust Law

The Seoul High Court (2009 NU 1930, May 19, 2010) has overruled a decision of the Korean Fair Trade Commission (KFTC) in a case concerning price-fixing by luxury car importers. The KFTC has appealed the this pivotal price-fixing case.  We shall update the reader. The High Court ruled that a price-fixing arrangement (restriction on discounts from MSRP) between Lexus car dealers was not an “unfair collective act” under Monopoly Regulation and Fair Trade Act Art. 19 (1) thus overruling the decision of the KFTC that imposed a fine and ordered the dealers not to engage in the price-fixing arrangement. The KFTC has also imposed a fine on other luxury car importers. The KFTC opined that the relevant market was the market for the particular car and not the entire car or luxury car market. Thus, the Commission ruled that the act restrained trade absolutely within the relevant particular car luxury

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