Since 2003, about 15,000 corporate combination filings have been submitted to the Korea Fair Trade Commission. Of these, only nine were blocked, just 0.06%. In reviews where more than 99% effectively pass, why did the Korea Fair Trade Commission (FTC) not allow the "No. 1–No. 2 combination" of Lotte Rental and SK Rent-a-Car?
On the 26th, the Korea Fair Trade Commission (FTC) blocked the corporate combination of Lotte Rental, No. 1 in the domestic rental car market, and SK Rent-a-Car, No. 2. The Korea Fair Trade Commission (FTC) judged that after the combination, competition would weaken in both short-term and long-term rental cars, raising significant concerns that rates and discount terms would worsen. Under the Fair Trade Act, the Korea Fair Trade Commission (FTC) can prohibit a combination of corporations if it is likely to substantially restrict competition.
◇ Why the "No. 1–No. 2 combination" was a problem
What the Korea Fair Trade Commission (FTC) focused on was market structure rather than share figures. It judged that although there are many operators in the rental car market, the axis of those that actually go head-to-head on price and terms is limited. The Korea Fair Trade Commission (FTC) viewed Lotte Rental and SK Rent-a-Car as having led competition on terms, including discounts and promotions, and kept each other in check. If the two become one, that check-and-balance axis disappears.
In the short-term rental car market, the combined share of Lotte Rental and SK Rent-a-Car is about 30% on the mainland and over 20% in Jeju. On the numbers alone, it is not a monopoly, but the Korea Fair Trade Commission (FTC) focused on who "effectively sets the price" rather than the share. It judged that if the two companies combine, the short-term rental car market would be reorganized into a structure of "one large corporation versus many small operators," which could significantly weaken price competition.
It also saw significant concerns about weakened competition after the combination in the long-term rental car market. Based on the Korea Fair Trade Commission (FTC) materials, the two companies' combined share exceeds 38%. The Korea Fair Trade Commission (FTC) also noted that the combined entity would be larger than the sum of operators ranked No. 2 through No. 7. The point is that an operator that effectively leads prices and terms could emerge in the market.
◇ "There are concerns about price hikes and the disappearance of discounts and promotions"
This judgment aligns with past cases where corporate combinations were blocked. The Korea Fair Trade Commission (FTC) has not allowed combinations when the axis of competition disappears due to a combination between the No. 1 and No. 2 operators, even if market share does not exceed a certain level.
A representative example is the combination of MegaStudyEdu and ST Unitas (Gongdangi) that the Korea Fair Trade Commission (FTC) blocked in 2024. At the time, it was expected that the combined share of the two companies would rise to around 70%, but what the Korea Fair Trade Commission (FTC) primarily took issue with was not the number itself, but that the only competitive relationship that kept each other in check in the online lectures market for civil service exams would disappear.
The 2016 block of the SK Telecom–CJ HelloVision combination looked at the possibility that an operator could emerge that would control prices and terms in the broadcast and pay TV competitive landscape. The 2014 block of the Essilor–Daemyung Optical combination also cited concerns that competitive pressure would weaken in the lens distribution market. In these cases, the Korea Fair Trade Commission (FTC) commonly used as a criterion whether, after the combination, an operator would emerge that effectively controls prices or transaction terms.
A legal expert specializing in fair trade said, "The core of this case is that the check-and-balance structure between the No. 1 and No. 2 that were engaged in price competition in the rental car market would disappear," adding, "The fact that the Korea Fair Trade Commission (FTC) chose a block instead of conditional approval can be interpreted as judging that when a rival disappears, tying prices alone would not be enough to prevent a weakening of competition."