Monopolistic and oligopolistic through merger is one of the most controversial problems in modern economic life. As a result of Mergers, the economies of large Scale, accumulation of capital, the dispersion of risks and the rationalization of manageme...
Monopolistic and oligopolistic through merger is one of the most controversial problems in modern economic life. As a result of Mergers, the economies of large Scale, accumulation of capital, the dispersion of risks and the rationalization of management of firms are brought but the weakness of free competition-one of the fundamental principles of capitalism, the abuse of dominative power in markets, the ineffective of the economy and the inequality of income distribution are caused by monopolization and oligopolization due to mergers.
In Korea, according to the constitutional provision "monopolistic and oligopolistic practices shall be properly regulated and coordinate" (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 law provides that any special firm shall not effect a merger in either of the following cases, "where the effect of a merger may be substantially restrain competition in any particular field of trade" or where unfair methods of practices have been employed in the course of the merger." Here we assume an effective competition, not a perfect competition.
Our antitrust policy is not a perfect and satisfactory one but it has a lot of problems. Our legislative policy is the method of post-regulation system and so, to eliminate the evils afferwards if evils accrued from mergers. This policy is reasonable under our industrial structure, I think. But under our Antitrust Act, the conglomerate merger could not regulated. In the legistration to come, this point shall be considered, I believe.