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[OUTLOOK] Stifling Press in the Name of Competition

The obvious conclusion is that new regulations on trade practices of media aim at political control.

Mar 29,2001
The regulations prohibiting unfair trade practices by the print media are about to be revived after being scrapped two years ago as impractical. The new regulations are totally different from their older version, and incorporate an assorted number of harsh regulations relating to the sales, advertising and internal trade activities of newspapers. They are so stringent that they make one wonder whether the regulations once imposed by the Japanese colonial rulers are making a comeback under the guise of ensuring fair competition.

The draft version of the new regulations gives rise to many questions. I wish to ask whether it corresponds to the freedom of press, the essential values of a democratic society and spirit of autonomy and competition. I also wish to ask whether there has been a thorough analysis of the costs and benefits of enforcing the regulations, and whether the opinions of the interested parties, such as newspapers, were sufficiently taken into account.

The new version also contains many elements that will restrict free competition based on the quality and price of newspapers. One cannot help wondering whether the new code of operational guidelines for the newspaper industry is not based on an intention to artificially overhaul the newspaper market structure for a partisan purpose. We all know from experience that a market that allows free production and distribution of information is far more precious than a short-lived political administration that comes and goes. This is why the new regulations generate our concern.

First, let's look at the legal aspect of the competition system of joint newspaper sales that the Fair Trade Commission intends to introduce. This system stems from the idea that it is a forbidden exclusionary business practice for the distribution stations of a newspaper company to handle just its own newspapers and not those of its competitors, and that there is therefore grounds for regulation. This is a mistake. Exclusionary trade practices are regulated because they have the potential of restricting fair competition. But newspaper delivery stations compete fiercely over subscribers; the current system does not restrict competition at all. There is no reason to regulate newspaper delivery outlets differently from the ubiquitous household-appliance sales agencies that sell the products of one company.

The Fair Trade Commission also reportedly plans to interfere in the sales price set by newspaper companies. This plan, however, goes against the antitrust regulator's mission of promoting autonomous price setting and competition by businesses. There can be no doubt that the commission constituents are also aware of this fact. The commission officials that I know are highly qualified and knowledgeable people, who seem to be more open and rational compared to the bureaucrats at other government agencies. This leads me to harbor the logical skepticism that the idea of enforcing the new regulations was conceived by the government from a partisan position and unilaterally notified to the commission.

I recently read a treatise by Philip Areeda, an authority on the antitrust law in the United States, which impressed me greatly. The author said that the U.S. federal antitrust law has enjoyed 100 years of success, and will succeed for another 100 years because members of the legal profession untutored in economic and administrative issues have made judicial decisions transcending regional and partisan interests. It is unwise for political actors to take advantage of a Fair Trade Commission that enjoys considerable confidence from the public and reduce it to a "second prosecution" under political guidance.

If the commission really wishes to enforce the regulations, then it should devise a similar code of operational guidelines for political parties based on the same logic and reasons. The current political market is a system monopolized by three political parties, and is a far cry from being a "clean market." It is probably much more corrupt than the newspaper market. Then the commission should eradicate corruption in the political market and overhaul it so that it becomes a completely free market, which will allow the creation of political parties with distinct ideologies and also will promote consumer welfare. It should introduce regulations mandating the integrated district party chapters to field parliamentary candidates from other political parties to await the "fair" choice of consumers (joint sales) and to "fairly" control the policy presentation or qualifications of the candidates (quality and price control). It should also "fairly" limit the number of unnecessary politicians to within 10 percent of the necessary number (limitation of freely distributed papers to 10 percent of the papers sold in the market), and prohibit political parties from exchanging unfair personnel and financial support through such acts as lending parliamentary members.

If this sounds illogical, then the newspaper regulations are also illogical. Don't do unto others, as you would not have others do unto you, as Confucius said 2,500 years ago.

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The writer is a professor of law at Sungkyunkwan University.


by Chung Ho-yul




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