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The government has appointed Prof. Kwon Oh-seung of Seoul National University¡¯s Law Faculty as head of the Fair Trade Commission. Kwon, who teaches a course in fair trade law, is known as the country's top authority in the area and has often criticized the commission when there were problems with its independence and regulatory policies. He has a big job ahead of him during his three-year tenure. Not to mince words, the FTC has been derailed, and he needs to put it back on the tracks.
The role of the FTC, the Fair Trade Law says, is "to foster creative corporate activities by facilitating fair and free competition and ensure the protection of consumers and balanced development of the national economy." With outgoing commissioner Kang Chul-kyu at the helm, it has hardly been faithful to these essential functions.
To be sure, the FTC regulated numerous businesses and imposed a lot of fines during Kang's tenure. But little of that has benefited the people or spared the consumer inconvenience, and the reason is that the commission gave priority to political considerations when it made its judgments.
Yet independence is of the essence if the FTC is to have any point. The commission was established so it would take orders from no one, including the president, and that the commissioners may perform their duties according to their independent judgment. The U.S. Federal Trade Commission neither attends meetings chaired by the president nor reports to him.
But our FTC has practically acted as a sort of economic prosecution for the government. In attempts to punish newspapers critical of the government since the Kim Dae-jung administration, the government has often wielded the weapon of tax audits or FTC investigations. Following a politically motivated investigation of the head offices of newspapers in 2001, the FTC imposed W24.2 billion (US$24.2 million) in fines which it later had to cancel when it became clear that the courts would strike them down.
Kwon has told an academic conference, "The FTC's judiciary and policy functions should be separated from each other, with judicial functions entrusted to a separate organ that is assured independence." With that, he put his finger on the problem that the commission is not assured independence yet. No less important than achieving that independence is scrapping regulations that hurt consumers or competition.
One such regulation bans conglomerates with more than W6 trillion in assets from investing more than 25 percent of their net assets in other firms. Under its new chief, the FTC must be reborn as a truly consumer-oriented body.
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