"Caution on Competition Law Violations in Indian Business Activities"

Fair Trade Commission Publishes Guidebook on Indian Competition Law

[Asia Economy Reporter Moon Chaeseok] The Korea Fair Trade Commission (KFTC) announced on the 19th that it has published a booklet explaining competition law to ensure that Korean companies operating in India do not suffer disadvantages due to violations of local competition laws.

This booklet is the first publication related to Indian competition law. In addition to the main contents of the law, it also includes recent law enforcement cases.

As the Indian competition authority has actively enforced the law by handling a total of about 240 cases over the past three years, Korean companies need to familiarize themselves with the key provisions of Indian competition law.

According to the booklet published by the KFTC, in India, penalties for abuse of market dominance can be imposed up to 10% of the average related sales revenue over the past three years, and corporate divestiture orders can also be issued.

In particular, regarding resale price maintenance and exclusive dealing, while only the initiating business operator is subject to sanctions in Korea, in India these transactions are treated as vertical collusion. In other words, business operators who comply with such transactions can also be sanctioned.

Meanwhile, for individual employees, while in Korea sanctions apply only if they are involved in unfair practices, in India sanctions can also be imposed if they neglect their duty of care as managers, so caution is required.

Although the Indian competition authority’s merger review is generally required to be completed within seven months, many cases exceed this deadline, so it is necessary to make full use of the 'prior consultation system.'

Detailed information on Indian competition law is available on the KFTC’s Overseas Competition Policy website.

Hwang Taeho, Director of International Cooperation at the KFTC, said, "We expect that the booklet published this time will significantly contribute to Korean companies operating in India avoiding sanctions from the Indian competition authority and conducting their business activities more freely."

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