Seoul suspends new antitrust bill on trade conflict fears

South Korea has postponed the introduction of a new law aimed at expanding its authority beyond Korean entrepreneurs, people familiar with the matter said on Sunday.

The world’s 10th largest economy by GDP had pushed for a revision to antitrust laws to prevent monopoly and monitor any unlawful practices of company chief executives, who are non-Korean citizens but their businesses are based in South Korea.

The revised bill, supposed to be announced earlier this week, took aim primarily at the American citizen Kim Beom-seok, the chief executive of the US-listed e-commerce player Coupang Inc.

Under the current law, the owner-cum-heads of Korean conglomerates can bypass domestic laws on regulatory disclosures and antitrust regulations, if they are not Korean citizens.

The revised bill was aimed at applying the same disclosure and antitrust rules to both Korean and foreign entrepreneurs, who manage Korean companies.

But the Ministry of Trade, Industry and Energy put the brake on the legislation on the premise that if the revised rule comes into force, the head of S-Oil Corp., a majority owned by Saudi Aramco, should also be subject to the tightened antitrust legislation.

Otherwise, South Korea would violate a clause contained in the Free Trade Agreement between South Korea and the US: none of American companies are discriminated against the companies from other countries when they invests in South Korea.

The Ministry of Economy and Finance also agreed to suspend the bill on concerns that any strict monitoring of foreign-controlled companies could have an adverse effect on foreign investments in the country.

Now the revised bill is put on the shelf, it is open for further discussion between the ministries of economy, foreign affairs and trade, the sources said.

“Nothing has been determined about the timing of its announcement nor the direction in the law,” said an official of South Korea's Fair Trade Commission..

Kim, a Korean American, set up Coupang in South Korea in 2010 and list the country's largest e-commere platform on Nasdaq in 2021.

In the same year, Coupang joined the ranks of conglomerates since its assets surpassed 5 trillion won ($3.8 billion) on the back of the rapid growth in sales.

But its CEO Kim has avoided the disclosure requirement of financial information and shareholdings to Korean regulators for the reason that Kim, as a foreign nationale, was not designated as the owner-cum-head of a local company subject to the rules.

Write to So-Hyeon Kim at By alpha@hankyung.com
Yeonhee Kim edited this article