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‘Our role as a market watchdog doesn’t follow the changes in the government.’
November 09, 2009
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Several local soju companies will be fined for price fixing next month, Chung Ho-yul, chairman of the Fair Trade Commission, said during an exclusive interview with the JoongAng Ilbo at his office in the Seocho District, southern Seoul, last Friday. The interview was conducted on the 100th day of his tenure at the FTC. The local antitrust agency began investigating soju companies for a possible price-fixing scheme late last year. Chung said the commission “has verified specific charges and will decide on the level of punishment next month.” “Considering that the soju industry’s total annual sales are more than 2 trillion won [$1.7 billion], the fine will be relatively high,” he said. Chung also spoke about the work he is doing with the local airline industry’s mileage service system. He said there was a high possibility that airline passengers will be able to use a combination of cash and mileage points to travel, a practice that is currently not allowed. Meanwhile, Chung showed he isn’t against the Justice Ministry’s plan to implement poison pills, a strategy that makes shares less attractive to deter merger and acquisition bids. “[The commission] was against introducing poison pills because we thought it would hamper fair competition, but if it is the government’s decision, we will have to stick with it,” Chung said. Here are some excerpts from the interview with Chung: Q. You have worked at the Fair Trade Commission for 100 days. What are your personal impressions of the commission that is the so-called prosecutor of the business industry? A. The employees here work really hard. They have professionalism and experience. However, because they are so absorbed in the work given to them, they tend to be less creative than those who work in the private sector. The staff here seems to have a conservative approach to new policies, and acts passively toward interest groups. There is still the instinct for self-preservation. You are the fourth consecutive chairman of the commission selected from outside the commission. Was there any discontent among employees within the commission who were interested in being promoted? I’m pretty familiar with the work here because I’ve served on the Fair Trade Commission’s competition policy advisory committee for a long time. The employees seem to feel comfortable with me. There is criticism that the FTC departed from its mission during the previous two administrations of Kim Dae-jung and Roh Moo-hyun, which were more progressive than that of the current Lee Myung-bak administration, and that it imposed more restrictions on companies and the media during that time. How would you respond to that? Even the United States’ Federal Trade Commission changes its policies according to who is in office. When the Democrats are in charge, the regulation level becomes stronger and when the Republicans are in charge, the level softens. From a short-term perspective, it seems there are fluctuations in policy, but there is stability over the long term. Korea is also going down the same path. What is certain, however, is that our role as a watchdog for the market doesn’t follow the changes in the government. What is the commission’s overall policy towards large conglomerates? Our principle is to alleviate prior regulations and strengthen post supervision. However, in order to create an environment of free competition, the market shouldn’t be focused on large corporations. Also, it is our job to make that balance for the free market to develop. angie@joongang.co.kr By Koh Hyun-kohn, Sohn Hae-yong |
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