The Korea Fair Trade Commission said on the 9th that it has begun improving systems to boost the bargaining power of economic weak parties such as small and midsize enterprises. It is reviewing a plan to partially ease the application of the Fair Trade Act so that small and midsize enterprises can negotiate transaction terms collectively with large companies.
The Korea Fair Trade Commission (FTC) held the first meeting of the "Task force (TF) on fair trade system improvements to strengthen the bargaining power of economic weak parties" at the Korea Fair Trade Mediation Agency in Seoul on the day. The TF included the FTC Secretariat, relevant ministries, academia and experts.
The Korea Fair Trade Commission (FTC) explained that there is still a significant power imbalance in transactions between large and small companies and that it is difficult for small and midsize enterprises to improve transaction terms individually, as the background for pursuing system improvements. It is reviewing a plan to exclude small and midsize enterprises that meet certain requirements from the application of the Fair Trade Act and not treat their joint responses for negotiation as collusion.
However, because collective bargaining can also lead to price increases or restrictions on competition, the Korea Fair Trade Commission (FTC) plans to limit the eligible subjects and scope and to establish mechanisms to control side effects. It said it will design the system carefully so that it does not lead to a decline in export competitiveness or higher prices.
The TF also discussed excluding workers, labor service providers and labor unions from the scope of the Fair Trade Act. In that case, joint conduct by those parties would be exempt from the application of the Fair Trade Act without additional review.
The Korea Fair Trade Commission (FTC) plans to draw up a system improvement plan in the first half after TF discussions and additional feedback, and to push to revise the Fair Trade Act and subordinate regulations in the second half.