Fair Economy Law 'Advances'... Fair Trade Act Included in 37 Joint Bills by Ruling and Opposition, Commercial Act Remains a Matter for Discussion

Franchise Business, Agency, Subcontracting, and Other 'Gap-Eul Issues' Resolution Bills Included

Lee Nak-yeon, leader of the Democratic Party of Korea, and Kim Jong-in, emergency committee chairman of the People Power Party, are attending the luncheon meeting hosted by National Assembly Speaker Park Byeong-seok for the leaders of negotiation groups at Sarangjae in the National Assembly on the 10th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea and the People Power Party have included an amendment to the Fair Trade Act, one of the 'Three Fair Economy Acts,' among the 37 bills they agreed to jointly pursue during this regular session of the National Assembly. Related bills concerning subcontracting, franchise businesses, and agency transactions aimed at resolving the so-called 'Gap-Eul problem' will also be promoted from the perspective of economic democratization.

However, the amendment to the Commercial Act and the enactment of the Financial Group Integrated Supervision Act, which are part of the 'Three Fair Economy Acts,' were excluded from the joint bill list due to differing views between the two parties, and it was decided to gather opinions through further discussions. Contentious bills such as profit-sharing between large corporations and small and medium enterprises (SMEs) and regulations on large retail stores are also treated similarly.

On the 11th, a Democratic Party official told Asia Economy in a phone interview, "We included the amendment to the Fair Trade Act as a bill on which we found consensus with the People Power Party from the perspective of economic democratization, but the Commercial Act and the Financial Group Integrated Supervision Act were classified as future tasks for consultation since the People Power Party had previously expressed opposition."

He added, "Amendments to the Subcontracting Fairness Act, Franchise Business Fairness Act, and Agency Transaction Fairness Act were also included in the jointly pursued bills, along with amendments to the Special Act on Financial Innovation Support to revitalize fintech, the Capital Market Act, and the Free Economic Zone Act to foster startup companies."

At a luncheon meeting hosted by National Assembly Speaker Park Byeong-seok the previous day, Democratic Party leader Lee Nak-yeon and People Power Party Emergency Committee Chairman Kim Jong-in agreed to have the chairpersons of both parties' policy committees negotiate and handle common issues among their general election pledges and party platforms. Immediately after the meeting, Lee told a Democratic Party caucus, "We extracted about 37 common items. I proposed legislating them during this regular session, and Chairman Kim Jong-in agreed." He added, "Regarding the Three Fair Economy Acts, I said, 'Chairman Kim is widely recognized as 'Mr. Economic Democratization,' so let's do this as well,' to which he replied, 'If we negotiate, a solution can be found.'" In response, People Power Party spokesperson Kim Eun-hye explained, "It was not a positive answer but rather a statement indicating a willingness to discuss the matter in principle."

The government-proposed amendment to the Fair Trade Act focuses on increasing fines, abolishing the exclusive prosecution system by the Fair Trade Commission for hard cartel cases to expand prosecution by the prosecution, and promptly remedying the rights of victims of unfair trade practices. It aims to address issues such as preferential treatment of affiliated companies and improving governance structures. The People Power Party reflected in its recently revised basic policy, 'Walking with the Weak and Realizing Economic Democratization,' that "all unfair acts among economic actors participating in the market will be strictly punished, and an institutional foundation will be established to achieve co-growth and harmony between large corporations and SMEs." Seong Il-jong, the People Power Party floor leader on the National Assembly's Political Affairs Committee, recently told Asia Economy that regarding the amendment to the Fair Trade Act, "Rather than opposing it by reflecting the business community's position, we will review it from the perspective of efficiency."

The government-proposed amendment to the Commercial Act centers on the multiple derivative suit system and the separate election of audit committee members to protect minority shareholders' rights. It allows shareholders of a parent company holding more than 1% of shares to file derivative suits against directors of subsidiaries who have caused damage to the subsidiary, aiming to limit the influence of major shareholders. This issue is directly related to the control of major shareholders, and the business community opposes it, arguing that it is an anti-business bill and may be unconstitutional.

The Financial Group Integrated Supervision Act aims to manage risks at the group level in addition to supervision of individual financial companies. Depending on shareholding relationships with other affiliates, additional capital increase obligations may arise.

Democratic Party lawmakers have proposed numerous bills such as the 'Act on Promotion of Mutual Cooperation between Large and Small-Medium Enterprises,' which includes profit-sharing systems between large corporations and SMEs and prevention of technology theft, and amendments to the Distribution Industry Development Act, which restricts large-scale stores and limits operations of complex shopping malls. However, these also face considerable opposition as measures to constrain large corporations, indicating that thorough discussions will be necessary going forward.

This content was produced with the assistance of AI translation services.