Legal Status of Joint Ventures under Korean Competition Law

Abstract

This article reviews the regulatory framework for joint ventures and presents some proposalsfor its improvement. Korean competition law does not define a joint venture, not even a concentration from substantive points of view. An establishment of a joint venture can be assumed as either a concentration or a cartel. Therefore, there is a possibility of double control of this single behavior, which could severely threaten legal certainty and predictability. Against this background, this article attempts to define the establishment of a joint venture substantively, and it means an acquisition of joint control to a newly created company by two or more undertakings. Considering that a joint venture has an ambivalent nature, or pro- and anticompetitive effects, it is suggested that a joint venture accompanied by structural changes in the participating firms will be dealt with in principle under merger control, where its cooperative effects are reviewed altogether. A joint venture for simple cooperation should be processed within a simplified procedure under certain circumstances. This would result in procedural economies without harming effective competition.