Seoul suspends new antitrust bill on trade conflict fears

Concerns about possible trade friction with the US and impact on foreign investments put the law revision on hold

South Korea's largest e-commerce platform Coupang is founded by non-Korean citizen Kim Beom-seok in 2010
South Korea's largest e-commerce platform Coupang is founded by non-Korean citizen Kim Beom-seok in 2010
So-Hyeon Kim 2
2022-08-01 15:37:27 By alpha@hankyung.com
Business & Politics

South Korea has postponed the introduction of a new law aimed at expanding its authority beyond Korean entrepreneurs, people familiar with the matter said on Sunday.

The world’s 10th largest economy by GDP had pushed for a revision to antitrust laws to prevent monopoly and monitor any unlawful practices of company chief executives, who are non-Korean citizens but their businesses are based in South Korea.

The revised bill, supposed to be announced earlier this week, took aim primarily at the American citizen Kim Beom-seok, the chief executive of the US-listed e-commerce player Coupang Inc.

Under the current law, the owner-cum-heads of Korean conglomerates can bypass domestic laws on regulatory disclosures and antitrust regulations, if they are not Korean citizens.

The revised bill was aimed at applying the same disclosure and antitrust rules to both Korean and foreign entrepreneurs, who manage Korean companies.

But the Ministry of Trade, Industry and Energy put the brake on the legislation on the premise that if the revised rule comes into force, the head of S-Oil Corp., a majority owned by Saudi Aramco, should also be subject to the tightened antitrust legislation.

Otherwise, South Korea would violate a clause contained in the Free Trade Agreement between South Korea and the US: none of American companies are discriminated against the companies from other countries when they invests in South Korea.

The Ministry of Economy and Finance also agreed to suspend the bill on concerns that any strict monitoring of foreign-controlled companies could have an adverse effect on foreign investments in the country.

Now the revised bill is put on the shelf, it is open for further discussion between the ministries of economy, foreign affairs and trade, the sources said.

“Nothing has been determined about the timing of its announcement nor the direction in the law,” said an official of South Korea's Fair Trade Commission..

 Kim Beom-seok, CEO of Coupang, which was added to the list of S.Korea's top conglomerates by sales in 2021
 Kim Beom-seok, CEO of Coupang, which was added to the list of S.Korea's top conglomerates by sales in 2021

Kim, a Korean American, set up Coupang in South Korea in 2010 and list the country's largest e-commere platform on Nasdaq in 2021.

In the same year, Coupang joined the ranks of conglomerates since its assets surpassed 5 trillion won ($3.8 billion) on the back of the rapid growth in sales.

But its CEO Kim has avoided the disclosure requirement of financial information and shareholdings to Korean regulators for the reason that Kim, as a foreign nationale, was not designated as the owner-cum-head of a local company subject to the rules.

Write to So-Hyeon Kim at By alpha@hankyung.com
Yeonhee Kim edited this article

FTC pushes to monitor foreign conglomerate owners

FTC pushes to monitor foreign conglomerate owners

South Korea's Fair Trade Commission building South Korea’s Fair Trade Commission (FTC) is one step closer to including foreign nationals to its list of owner-cum-heads of conglomerates it watches for any violations to the country’s antitrust legislation.President-elect Yoon Suk-ye

Coupang wraps up 2021 with record sales of $18.4 bn 

Coupang wraps up 2021 with record sales of $18.4 bn 

Coupang Inc. founder and CEO Kim Bom-seok South Korea’s e-commerce juggernaut Coupang Inc. posted $18.4 billion in sales last year, up 54% on-year. Compared to the pre-pandemic level in 2019, the figure has jumped threefold.Coupang announced on Thursday that both its annual sales revenue

Antitrust body takes aim at Kakao's taxi-hailing app, Coupang

Antitrust body takes aim at Kakao's taxi-hailing app, Coupang

South Korea's antitrust body has launched an investigation into Kakao Mobility Corp. on allegations of discrimination against taxi drivers not subscribing to its paid membership, said a senior official of the Fair Trade Commission (FTC), which has been tightening its grip on platform and e-com

(* comment hide *}