1. Reasons for Amendment

The Cartel Conduct Review Criteria recognizes unlawfulness of bid rigging as an exception provided business entities are a “de facto single business entity” from a practical and economic perspective, in contrast to other agreements among them, while joint exemption of business entities in a “substantial control relationship” are recognized but there are no provisions on exclusion of bid rigging for the Administrative Pre-Announcement of an Amendment to the Notice on Exemption of Corrective Actions for Voluntary Reporters of Cartel Conduct. 

The determination criteria for a de facto single business entity and a substantial control relationship are regulated under identical terms. Consequently, there is the potential for an irrational outcome of accepting the application for joint exemption and exempting two or more business entities from all dispositions, while recognizing bid rigging by business entities in a substantial control relationship as against the law.

In particular, there are no provisos stating that joint exemption may not be recognized even if the business entities are in competition, in cases where one business entity owns all the shares of another business entity. Hence, it is necessary to clearly exclude business entities that colluded and participated in bidding on the premise of competition from the subjects of application for joint exemption.

Moreover, with respect to provisions prohibiting the recognition of the secondary business entity’s exemption status where there are two business entities engaging in cartel conduct, the Amendment aims to prevent confusion by explicitly specifying the method of calculating the number of business entities when the application for joint exemption is accepted.

2. Major Provisions

A. Subjects of application for joint exemption

Exclude business entities that have not participated as one consortium even they are in a “substantial control relationship,” as bidding is on the premise of competition among each participant.

B. Explicitly specify the method of calculating the number of jointly exempted business entities  

When determining the number of business entities involved in the illegal cartel conduct with respect to the part within the parentheses of Article 51 (1) 3 (a) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, calculate business entities whose applications for joint exemption are recognized as one business entity.