At present, enterprises of various countries are endeavering to the enlargement of enterprise scale and managerial efficiency in meeting with the rapid technological development. Even for our industries, to win in the international and domestic compet...
At present, enterprises of various countries are endeavering to the enlargement of enterprise scale and managerial efficiency in meeting with the rapid technological development. Even for our industries, to win in the international and domestic competition, they must strongly promote improvement of structure through mergers by means of various types. There are various reasons for mergers. Mergers are made in order to rationalize management of enterprises, to liquidate failing companies and to absorb competitors which are failing in their business because of intensive competition. Therefore, we can see two kinds of effects from mergers. Merger could produce, on the other hand, of restraint of competition of others. According to these effects, regulations by civil law and some special Acts is put on mergers, respectively. But in this paper regulation of mergers by the Anti-monopoly Act is dealed chiefly with.
In Korea, according to the constitutional provision "Monopolistic and oligopolistic practices shall be properly regulated and coordinatec" (Art. 120. (3) of Constitution). The Act concerning Restriction of Monopoly and Maintenance of Fair Trade is enacted in 1980 and put in force from 1981. This Anti-monopoly Act provides that special company shall not effect a merger in either of the following cases "Where the effect of a merger may be to substantially restrain competition in any particular field of trade" or "where unfair business practices have been employed in the course of the merger or consilidation (Art. 7(1), of Anti-monopoly Act). In practice, mainly the former provision is at issue now. According to prevailing opinion, the term "where the effect of a merger may be to substantially restrain competition" means that situations where a market dominating pwoer is formed and, in order words, the situation where effective competition in the market is lost.
Our legislative policy is the method of post-regulation system and so, to eliminate the evils afterwards if evils accrued from mergers. This policy is reasonable under our industrial structure, I think. But under our Anti-monopoly Act, the conglomerate merger could not regulated. In the legistration to come, this point shall be considered, I believe.