A Study of the Presumption of Market Dominance Under Article 4 of the MRFTA

Since Korean competition law was adopted in 1980, Korean competition policy and law have developed significantly through accepting foreign legal techniques and economic ideas with modifications. In particular, there are some distinctive competition law provisions that do not exist in the US and the EU, such as the provision concerning the presumption of market dominance, stated in Article 4 of the MRFTA. This clarifies the scope of application of Article 3-2 on enterprises that hold a market dominant position. This is originally from the German competition rules that influence competition laws in Korea and Japan since the presumption clauses provide legal certainty which is important for a competition jurisdiction with a civil-law system. Most Asian competition regimes provide a presumption of market dominance based on market share threshold or concentration ratio. Although this presumption can offer a benefit of legal certainty, it may also cause some problems, such as a strait-jacket effect, which refers to the situation where a competition law is concerned with forms rather than effects. A stringent legal framework of market dominance presumption may result in this problem. Therefore, a case-by-case approach may be necessary in a certain scrutiny on abuse of market dominance. Since this provision of presumption was adopted in 1999, quite a number of cases have been examined under the existing presumption method. However, there has been almost no case of discussing revocation of presumption. This article aims to discuss the current approach of presumption of dominance which is very different from those in the Western countries, such as the US and the EU; these regimes do not have the problem of lack of case law. It, then, provides proposals for a better competition policy of assessments on market dominance.