Friday, December 22, 2006

Collusion in High-Tech Industries

This is a test blog. Recent cases of collusion in semiconductors and LCD monitors involving Korean executives has made the extraterriorial application of antitrust law a hot topic in Korea. The real issue, however, may be uncertainty in the enforcement of horizontal cooperation rules in a global setting.

There is an international consensus that so-called "hard-core" cartels are illegal, yet in Korea all forms of illegal cartel are treated essentially the same, i.e. through corrective measures and administrative fines for firms. Prosecutions are hard to find since the Korea Fair Trade Commission has been reluctant to file such complaints except in the case of serious - e.g. collusion maintained by means of threats or force - or repeated violations. (Min Ho Lee, "Recent Developments in the Treatment of Collusion by Korean Courts", Journal of Korean Law, Vol. 4 No. 2, p. 161)

It is also unlikely that presumptions of agreement under Art. 19(5) of the Monopoly Regulation and Fair Trade Act could be prosecuted criminally.

Not only are cartels not punished criminally as a rule for the above reasons, but guidance on illegality for other cooperative behaviour is insufficient. While the rule of reason applies generally to these acts, there is no indication as to how this would operate in the context of high-tech markets. Thus, there is a lack of legal certainty with regards to standard setting, cross-licenses, patent pools, patent settlements, etc. On this point, I am interested in the work of Professor Carl Shapiro and the US exeperience in general.

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