On February 12, 2010, the Chairman of the Korea Fair Trade Commission (KFTC), Chung Ho Yul, participated in the top-level round table discussion during the International Cartel Workshop co-sponsored by International Bar Association (IBA) and American Bar Association (ABA). He and many other global companies are very concerned about the recent rise of cartel or antitrust practice cases either in U.S. or Europe.
Unfair Fines to Foreign Corporations
The meeting's particular concern is that the U.S. Department of Justice (DOJ) has collected some of the largest fines in the history of its Antitrust Division and that all those large fines came from foreign companies, most of them having their headquarters overseas. For example, Air France-KLM was fined US$350 million and Samsung Electronics was fined US$300 million. Korean Air and British Airway each had to pay US$300 million, and Asiana Airlines paid US$50 million last year. Plus, one of the most outrageous fines was US$585 million applied to three LCD panels' manufacturers, including US$400 million to LG Electronics. Although the companies may have done something illegal, which we would never know because they never actually had trials and were never willing fight back, Samsung and LG paying total of US$700 million in last three to four years is simply ridiculous.
A New Start of "Legal Imperialism"
In 2004, the United States Supreme Court expressed its concern that DOJ may be single-mindedly focusing only on foreign companies and creating unfair "legal imperialism" in hopes to protect domestic corporations against foreigners.[1] DOJ's Antitrust Division Chief Assistant Attorney, General Thomas O. Barnett boastfully pointed out in his speech in 2007, that "the division's prosecution of international anticompetitive practices took more than 90 percent of the US$1.9 billion in fined imposed by the division."[2] It seems that such legal imperialism may be extending its arm to push out foreign companies from the U.S. domestic market.[3]
Retaliatory Cartel Prosecution
Now, other countries besides the U.S. have turned their table and are making its noticeable effort to prosecute other foreign countries. The new German government, for instance, is attempting to strengthen competition enforcement by "expanding authority of the Federal Cartel Office." Furthermore, according to the KFTC, "France has recently restructured competition enforcement mechanism and expanded authority of its competition agency by integrating competition enforcement functions, once performed by several government agencies, to be solely carried out by the French Competition Authority last year." Most recently, last month in February, EU has raided many auto parts suppliers and other electronic manufacturers for allegedly making anti-competitive behavior.
Future Defense
Korean government and Korean companies have to work together in order to overcome these foreign "legal imperialism." Many Korean law firms are starting to recognize the problem and having workshops and seminars related such topics [4]. However, to fight back against such imperialism, not only attorneys in Korea, but also all companies need better understanding of what constitutes antitrust practice and the government needs to work with other countries' agencies to ease such legal competition and gain better "insight into new developments in competition enforcement of the world."[5]
Supporting Resources
[1] F. Hoffmann-La Roche Ltd. v. Empagran S.A. (2004)
[2] Thomas O. Barnett, Global Antitrust Enforcement (Sept. 26, 2007)
[3] In my opinion, Toyota's trouble in the States is understandable, but the media is also making harsh remarks on Honda and Hyundai cars.
[4] For example, a law firm Hwawoo is hosting a seminar on March 11, 2010.
[5] Mentioned by KFTC on its press release (Feb, 2010)
