[Editorial] For Whom Does the FTC Work?

When the government causes instability in corporate management rights and reduction in corporate efficiency and productivity, is it trying to revive the economy or stifle it?

The Fair Trade Commission (FTC) did not approve SAMICK Musical Instrument’s bid to acquire Young Chang Pianos on the grounds of a monopoly. Young Chang finally declared bankruptcy on September 21, 12 days after the ruling, which was expected by the FTC.

The domestic piano industry is in such a dire situation that it can no longer delay restructuring for fear of a monopoly. All of the domestic piano makers might perish if the restructuring process is further delayed, and a cutthroat competition continues.

Unfortunately, however, the FTC implements policies inflexibly, failing to see the broad picture, and we are left alone wondering whether the FTC is up to the job of managing the national economy. We are worried about the FTC pushing for the revision of the Fair Trade Act, which might shake the industrial sovereignty of Korea.

Samsung Electronics released an internal report showing that it might be vulnerable to foreign shareholders who try to take the management right away if the revision is implemented as it is now. The revision of the act will decrease the limit of the voting right of financial affiliates, resulting in Samsung Chairman Lee Kun-hee and his family having a seven percent less voting right than its 10 major foreign shareholders.

Whether or not the FTC likes the corporate governance of Samsung Electronics, it is the flagship company that leads the entire Korean industry in terms of high-tech prowess, sales, exports, brand recognition, and profits. If the FTC enforces the revision risking Samsung Electronics, then President Roh’s will to boost businesses would be put on shame.

The Asian Development Bank (ADB) recently pointed out, regarding Korea’s reform policies, “Korea should turn its policy direction from focusing on enhancing the transparency of big corporations or improving distribution, to improving economic efficiency and productivity in order to restore investment and trust in national policies.” If the FTC and the ruling party continue to disregard such advice, then they will soon face the public, asking: for whom does the government serve?