A market-dominant position refers to the power a business holds to independently control pricing, supply, or trade conditions within a specific market. In Korea, companies holding such a position are subject to strict regulations under the Monopoly Regulation and Fair Trade Act to prevent abusive practices.
1. Legal basis for Regulating Market-Dominant Position in Korea:
ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT.
A business entity (excluding any business entity annual sales or purchases of which in a particular business area are less than 4 billion won) shall be presumed a market-dominant business entity if its market share in a particular business area is as follows:
– The business entity’s market share is at least 50 percent in the particular business area;
– The aggregate of market shares of not more than three business entities is at least 75 percent: Provided, That business entities with less than 10 percent market share are excluded herefrom.
2. Types and Criteria of Abusive Practices by Market-Dominant Companies:
– Unfairly determining, maintaining, or changing the price of goods or service fees means significantly increasing or moderately lowering the price compared to fluctuations in the supply and demand or the cost required for the supply (limited to ordinary levels of the same or similar types of business), without good cause.
– Unfairly controlling the sale of goods or the provision of services means the following acts:
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- Sharply reducing the supply of goods or services in light of recent market trends, without good cause;
- Reducing the supply of goods or services despite a short supply in distribution channels, without good cause.
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– Unfairly interfering with business activities of any other business entity means an act of hindering business activities of other business entities by directly or indirectly conducting the following acts:
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- Interfering with any other business entity’s purchase of raw materials necessary for such entity to engage in production activities, without good cause;
- Hiring an employee essential for the business activities of any other business entity by providing, or promising to provide, the employee with excessive economic benefits in light of ordinary practices;
- Denying, interrupting, or limiting the use of or access to elements indispensable for any other business entity to produce, supply, or sell its goods or services, without good cause;
- Any other acts determined and publicly notified by the Fair Trade Commission, among acts of making it difficult for any other business entity to engage in business activities by other improper means other than those mentioned above.
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– Unfairly interfering with the market entry of a new competitor means making it difficult for a new competitor to enter the market by directly or indirectly conducting any of the following acts:
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- Concluding an exclusive transaction contract with a distributor, without good cause;
- Purchasing rights, etc. necessary for an existing business entity to continue its business activities, without good cause;
- Denying or limiting the use of or access to elements indispensable for a new competitor to produce, supply, or sell its goods or services, without good cause;
- Any other acts determined and publicly notified by the Fair Trade Commission, among acts of making it difficult for a new competitor to enter the market by other improper means other than those mentioned above.
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– Making an unfair transaction to exclude a competitor means the following acts:
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- Unfairly supplying goods or services at prices lower than the arm’s length prices or purchasing them at prices higher than the arm’s length prices, thereby likely to cause exclusion of competitors;
- Unfairly making a transaction with the other party to the transaction on the condition that the other party does not make any transaction with a competitor.
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3. About NYLA – Korean Legal Office
■ NYLA – Your Trusted Legal Partner in Korea
At NYLA, we understand that the success of foreign businesses in Korea requires not only a solid business strategy but also reliable legal support. With a team of experienced Korean attorneys and legal professionals, NYLA provides tailored legal services for companies, investors, and individuals operating or planning to establish a presence in Korea.
We support our clients throughout the entire business journey with comprehensive services, including:
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- Legal consultation on company establishment, taxation, and immigration;
- Advice on commercial real estate, franchising, and product distribution;
- Support in human resources, marketing, and business strategy.
In addition to legal advisory, NYLA also represents clients in civil litigation cases related to business, labor, marriage, family, and inheritance to ensure their rights and interests are fully protected.
■ Contact NYLA
If you’re a foreign business or individual looking for a reliable legal partner in Korea, NYLA is here to help. We are committed to delivering effective, practical, and personalized legal solutions for every client.
With a proven track record of assisting hundreds of international clients, our team is equipped to help you navigate complex legal challenges—whether it’s commercial disputes, contract issues, or foreign investment guidance.
Don’t let legal matters hold you back. Let NYLA be your trusted guide in the Korean market.
■ Get in touch with NYLA for expert legal support
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