A set of amended merger control regulations (the “Amended Regulations”) relating to the amended Monopoly Regulation and Fair Trade Act (the “MRFTA”) went into effect on August 7, 2024. These Amended Regulations included (i) the enactment of the Detailed Operational Guidelines for the Voluntary Remedy Proposal System in Business Combinations, (ii) amendments to the Rules on the Korea Fair Trade Commission (the “KFTC”) Meetings and Handling of Cases, and (iii) amendments to the Merger Filing Guidelines.

The Amended Regulations (i) introduce a pre-filing consultation process, (ii) establish a voluntary remedy proposal system, and (iii) expand the scope of exemptions from the merger notification requirement. It is expected that they will enable the KFTC to more effectively operate its merger filing and review system.

The key details of the Amended Regulations are as follows:
 

• Types of transactions subject to pre-filing consultation process: The pre-filing consultation process is available for all types of reportable transactions, including those that are eligible for simplified filing.

• Application deadline: Applications (and related materials) for pre-filing consultation must be submitted at least two weeks before the formal filing.

• Method for application and conclusion of pre-filing consultation process: An applicant must submit an application and related materials to merger@korea.kr. The KFTC will notify the applicant of the outcome of the consultation via email (however, if the formal filing is submitted prior to the conclusion of the pre-filing consultation process, then either the outcome of the consultation may be communicated verbally or the consultation process may be concluded without a separate notice to the applicant).

• During the pre-filing consultation process, the KFTC may allow the transacting parties to exclude or submit at a later time information that is not directly pertinent to the competitive assessment (e.g., financial information) or that requires substantial time and effort to prepare (e.g., market status).

• Even if the case handler assigned to review the formal filing is not the case handler who handled the pre-filing consultation process, the review of the formal filing will be conducted based on the outcome of the pre-filing consultation, unless there has been a significant change in either the details of the transaction or the relevant market status since the conclusion of the pre-filing consultation process.
   

• The new voluntary remedy proposal system consists of the following stages: (i) the KFTC case team notifies an applicant of its preliminary assessment relating to potential anti-competitive concerns if it is deemed that the proposed business combination may raise such concerns, (ii) the applicant submits a remedy proposal, (iii) the KFTC case team evaluates and notifies the applicant of its evaluation of the remedy proposal (at this stage, the case team may listen to opinions of experts or request an amended proposal), and (iv) the case team prepares an examiner’s report by considering the submitted remedy proposal.

• If the applicant agrees to the examiner’s report in writing, the KFTC hearing needs to be held within 15 days (shortened from 30 days) from the date on which the applicant’s response to the examiner’s report is submitted. Moreover, a final written decision must be issued within 20 days (shortened from 35 days) from the date on which the KFTC hearing is held. Accordingly, it is expected that the review process will proceed in an expedited manner.
   

• The (i) establishment of Private Equity Funds (“PEFs”), (ii) statutory mergers/consolidations and business transfers between a parent company and its subsidiary, (iii) interlocking directorship involving less than 1/3 of executive officers (excluding the representative director), (iv) inter-affiliate mergers involving a target (on a stand-alone basis) with total assets or worldwide revenue of less than KRW 30 billion), and (v) partial transfer of a company’s business for which the purchase price of the transferred business is less than 10% of the total assets of the seller and also less than KRW 10 billion (raised from KRW 5 billion).
   

As a result of the introduction of the pre-filing consultation process and voluntary remedy proposal system, it is expected that the merger filing review process will be simplified and that burdens on companies will be alleviated. However, as the effectiveness of these systems are contingent on close cooperation with the KFTC, it will be all the more important to effectively communicate with the KFTC going forward. Furthermore, as the systems are still in their early stages, the particulars regarding how they will be operated in practice by the KFTC remain to be seen.

[Korean Version]