(1) No person shall perform any of the following practices (hereinafter referred to as "business combination") substantially restricting competition in a particular business area, either directly or through a person in a special relationship prescribed by Presidential Decree (hereinafter referred to as "related party"); provided, this shall not apply where a person, other than a company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales (hereinafter referred to as "large company"), performs an act prescribed in subparagraph 2:
1. Acquiring or owning shares of any other company;
2. Concurrently holding an executive position in another company by an executive officer or employee (hereinafter referred to as "concurrently holding an executive position");
3. Merging with any other company;
4. Acquiring by transfer, leasing, or accepting by mandate all or substantial part of the business of another company, or acquiring by transfer all or substantial part of fixed operating assets of another company (hereinafter referred to as "acquisition by transfer of business");
5. Participating in the establishment of a new company; provided, any of the following cases shall be excluded:a. Where no person, other than related parties (excluding a person prescribed by Presidential Decree), participates in the establishment of a new company;b. Where a person participates in the establishment of a new company by division under Article 530-2(1) of the Commercial Act.
(2) Paragraph (1) shall not apply to any business combination recognized by the Fair Trade Commission as falling under any of the following; in such cases, the relevant business entities shall assume the burden of proof as to whether they satisfy the conditions: <Amended on Jan. 21, 2025>
1. Where the effect of increasing efficiency that is impracticable to achieve by means other than the relevant business combination is greater than the negative effect of restricting competition;
2. Where the business combination is made with an inviable company, such as a company whose total capital on its statement of financial position is less than its paid-in capital for a considerable period, and satisfies the conditions prescribed by Presidential Decree.
(3) A business combination that meets any of the following requirements shall be presumed to substantially restrict competition in a particular business area:
1. Where the aggregate of the market shares (referring to the aggregate of the market shares of the affiliates; hereafter in this Article, the same shall apply) of companies involved in the business combination (referring to all companies participating in the establishment of a company in the case of paragraph (1)5; hereinafter the same shall apply) meets the following requirements:a. The aggregate of the market shares shall satisfy the presumptive requirements for market-dominant business entities;b. The aggregate of the market shares shall be the largest in the relevant business area;c. The aggregate of the market shares shall exceed the market share of a company with the second largest market share (referring to a company with the largest market share other than the companies involved in the business combination) by at least 25/100 of the aggregate of the market shares;
2. Where a business combination conducted either directly by a large company or through its related party meets the following requirements:a. The business combination shall be conducted in a business area where small and medium enterprises under the Framework Act on Small and Medium Enterprises occupy at least 2/3 of the whole market share;b. The business combination shall bring at least 5/100 of the market share.
(4) The Fair Trade Commission shall determine and publicly notify the criteria for business combinations that substantially restrict competition in a particular business area under paragraph (1) and for business combinations to which paragraph (1) shall not apply pursuant to paragraph (2).
(5) The total assets or sales under the proviso of paragraph (1) shall be the total assets or sales of a company which continues to maintain its status as an affiliate from before the date of business combination until after the date of business combination; provided, the total assets or sales of a company under any of the following subparagraphs shall be the amount excluding the total assets or sales of affiliates: <Amended on1. Where an act falling under paragraph (1)3 is performed between affiliates, a company classified as follows:a. Where a company required to report its business combination under Article 11(1) or its related party engages an act falling under paragraph (1)3 with regard to the partner company under that paragraph: The partner company;b. Where a company, other than a company required to report its business combination under Article 11(1), which is of the size equivalent to the partner company, or its related party, engages in an act falling under paragraph (1)3 with regard to a company required to report its business combination that paragraph: The company required to report its business combination;
2. A company that transfers its business (including lease of business, delegation of management, and transfer of fixed assets for business use) in the case of business acquisition.