[EDITORIALS]Trade Panel Criticized RightfullyAn overview of the Fair Trade Commission reported last week suggests the agency has failed to promote fair competition, hobbled by its focus on restraining the conglomerates. This is the conclusion of Dankook University professor Kang Myong-hun, who is involved in the writing of the antitrust agency's 20-year history. His analysis, important to the economy's future, invites discussion.
The commission has actively pursued the establishment of a market economy that is guided by decisions made by the private sector. The agency should be recognized, rightfully, for its role in cultivating fair competition and private business activities in an economy shaped primarily by state-backed assistance and protection for rapid development. But despite the contribution, the commission today is not free from criticism.
Especially true is Mr. Kang's suggestion that the agency has been lopsided in its focus on restricting the abuses of market power by conglomerates. Having been through a debilitating financial crisis, the conglomerates are faced with unforeseen challenges. Unprecedented restrictions on transactions, cross shareholding and cross guarantees between affiliated firms are in place, and measures to raise management responsibility, including outside directorships and new audit systems, have been introduced with more regulations to come. They have little choice but to build up their capabilities in the market and let their affiliates operate independently.
As Mr. Kang proposed, the agency's role should shift to antitrust and away from direct regulation of conglomerates. The recommendation is that the agency must be more independent from the government through an overhaul of its personnel management and operational functions. That point is especially true in light of the controversial unfair trade practice decisions against media companies and the revival of the regulations on newspaper companies. The responsibility of the antitrust agency should lie in its intended duty of promoting fair competition and establishing the rules for it, not in curbing conglomerates' activities or in getting involved politically.