Comparative Analysis of Competition Laws on Buyer Power in Korea and Japan

Abstract

Competition authorities frequently focus more on the effects of the power of sellers than the power of buyers. Competition laws and policies that address the issue of buyer power are also diverse across different jurisdictions. This raises difficult problems for assessing the practice of buyer power. The competition authorities in the Republic of Korea (henceforth, Korea) and Japan have scrutinized a number of cases of buyer power involving large retail businesses. This article examines the current application of the laws relating to buyer power in Korea and Japan, by a comparative study, in order to contribute to improved implementation of competition law. This article analyses the existing competition laws on buyer power and their implementation in Korea and Japan to discern the common issues arising from their similar regulatory structure. These include: (1) the problem of overlap between the provisions on abuse of market dominance or monopolization and the provisions on unfair business practices (UBPs); (2) the problem of the presumption of superior bargaining position of large retail businesses; and (3) the issue of balancing tests of the positive and negative effects of buyer power. We argue that the distinctive approaches to buyer power under the competition laws of Korea and Japan reflect incentives different from those of other competition regimes with regard to the different legislative structure. This article finally gives further suggestions focusing on practical matters.