Samick Musical Instrument Co. Decision No.2004-271
Lee, Min Ho (Attorney, Lee & Ko LLC)
Given that the KFTC rarely imposes remedies for a violation of the merger regulation and the merging parties seldom sue against such remedies, there are only few judicial precedents relating to merger cases. This case is significant in that it was the first merger case to receive the Supreme Court judgment. The ruling represents an important precedent for future law enforcement relating to mergers.
The main legal issues in this case lied in ① how to evaluate the impact secondhand pianos have on competition, ② how pianos made by Japanese and Chinese manufacturers affected competition, ③ criteria for determining efficiencies generated through merger, ④ whether the failing firm defense was established, and ⑤ whether the proposed remedies were appropriate.
The Supreme Court ruling established legal principles relating to mergers, especially, horizontal mergers. The Supreme Court, in its judgment, provided basic criteria for defining relevant markets, for determining the anticompetitive effects of a merger, and for evaluating an efficiency defense and a failing firm defense.
Especially, the ruling is significant in that the Supreme Court recognized the former merger review guidelines to be the norm by accepting almost all of the criteria stated under the former rules. At the same time, the Court was flexible enough to consider extra factors not stipulated under the former guidelines to the extent necessary. Such flexibility may have been exercised based on the Court’s understanding that the former guidelines were purely illustrative.
Samick Musical Instrument Co. Decision No.2004-271
Lee, Min Ho (Attorney, Lee & Ko LLC)
Given that the KFTC rarely imposes remedies for a violation of the merger regulation and the merging parties seldom sue against such remedies, there are only few judicial precedents relating to merger cases. This case is significant in that it was the first merger case to receive the Supreme Court judgment. The ruling represents an important precedent for future law enforcement relating to mergers.
The main legal issues in this case lied in ① how to evaluate the impact secondhand pianos have on competition, ② how pianos made by Japanese and Chinese manufacturers affected competition, ③ criteria for determining efficiencies generated through merger, ④ whether the failing firm defense was established, and ⑤ whether the proposed remedies were appropriate.
The Supreme Court ruling established legal principles relating to mergers, especially, horizontal mergers. The Supreme Court, in its judgment, provided basic criteria for defining relevant markets, for determining the anticompetitive effects of a merger, and for evaluating an efficiency defense and a failing firm defense.
Especially, the ruling is significant in that the Supreme Court recognized the former merger review guidelines to be the norm by accepting almost all of the criteria stated under the former rules. At the same time, the Court was flexible enough to consider extra factors not stipulated under the former guidelines to the extent necessary. Such flexibility may have been exercised based on the Court’s understanding that the former guidelines were purely illustrative.
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