``Three Violations Provoke Direct Inspection``

The Free Trade Commission (FTC) approved yesterday in the entire staff meeting `the regulations on fair newspaper competition`, drawn by the Korea Newspapers Association (KNA).

The FTC announced that it decided to accept the original draft because the regulations are not against the newspaper notification system implemented in July. The KNA plans to confirm the regulations in the board meeting on 12th.

The `regulations` ban giving gifts to the newspaper subscribers and allow the distribution of free copies within 20 percent of paid circulation. And the KNA established a new regulation that proscribes the delivery of free copies to new subscribers and subscription extension requesters over 20 days.

As soon as the KNA confirms the regulations, the FTC will pass over the currently reported cases to the KNA, which will calm them down. And it will sign with the KNA on a memorandum of understanding (MOU) about the operation liaison plan such as the case transmission standard of the FTC.

The FTC will also include in the MOU the contents which states that the Commission will apply the three-strike-out system against the newspaper companies that violate the regulations more than three times. In this case, the FTC will put on the sanctions such as `correction order`, `warning`, and `impose of the fine` through the direct investigation.

With the confirmation of the regulations, the FTC is able to lead the KNA to establish the regulations for the free competition, and simultaneously able to exert the right to direct investigation. Some have pointed out that the regulations are the compulsory stipulations pretending the free competition.

In particular, the regulations allow the FTC to impose the levy up to maximum 3 percent of the total sales against the dominant companies in the market. This is enough to provoke the criticism that the government artificially intervenes into the newspaper market.

In case that the market share of three newspaper companies exceeding 75 percent, the FTC applies the regulation on the dominant companies. Currently, the market share of Donga Ilbo, Chosun Ilbo and Jungang Ilbo is estimated to reach around 70 percent.

And it is forecasted that there are likely to be much dispute over the representativeness and the neutrality regarding the personal composition of `the committee for the free newspaper competition`, comprised of 11 members such as the representatives from the civic organizations and the journalism scholars.

yhchoi65@donga.com