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p. 55 of 62 BACK | NEXT Purpose and Structure of the Toolkit Overview of Practices Controlled by Competition Law Countries with Competition Law Systems Benefits of Competition Policy Practices Controlled by Competition Law Key Concepts and Tools Competition, Privatization, and Regulation Emerging Economies Enforcement Mechanisms Role of the Legislature, the Government and Ministers Independent Competition Authorities Accountable Competition Authorities Design of the Competition Authority Procedures of the Competition Authority Transparent Decision-Making Powers of the Competition Authority Sanctions Leniency Program Competition Law Compliance Programs Administrative Guidance Role of the Courts Miscellaneous Points ADB Resources and Projects Other Resources Glossary and List of Abbreviations

Competition Law Toolkit : Enforcement Mechanisms

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J. Competition Law Compliance Programs

Companies should be made aware of the desirability of having a competition law compliance program.

• the declaration of the commitment to competition laws by a company’s executives; appointment of compliance officer;
• formulation and dissemination of a compliance manual;
• operation of education programs;
• establishment of a monitoring system;
• providing sanctions to be meted to individuals who violate competition-related laws; and
• the establishment of document management system.

According to Dong-kyu Lee, KFTC Director General for Headquarters on Competition Policy, the Compliance Program was introduced because conventional ways of law enforcement meet with limited success if the private sector does not voluntarily comply with competition laws and regulations. Investigations require a huge amount of administrative resources. Companies have to pay enormous costs for being involved in investigations. Officers of these companies risk punishment for violations. Offending companies will be levied surcharges and will need to incur legal costs. There are also intangible consequences such as a tarnished corporate image. But when compliance programs successfully takes root, companies voluntarily abide by competition laws. Social costs generated from law enforcement are minimized.

KFTC benchmarked the experience of developed countries with regard to introducing voluntary compliance schemes to the private sector. Companies that have adopted the KFTC Compliance Program have their own in-house team that monitors and regulates their activities to make sure they comply with competition laws. By the end of 2005, there were 257 companies with compliance programs in Korea.

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