34 MIZAN LAW REVIEW, Vol. 11, No.1 September 2017
1. The Trade Competition and Consumer Welfare Nexus
Laws on trade competition envisage certain core elements of a market economy,
i.e., “a market equipped with mechanisms allowing competition between
businesses, and the resulting strive for technological progress”,7 market share,
productivity and competitiveness. In centrally planned economies, where the
means of production are state-owned, the economic position of public
enterprises is “institutionalized by the socialist economic order itself” and the
protection of competition “did not make sense”.8
In Hungary, for instance, “competition law fell into a state of hibernation
between 1948 and the 1960s” because “the earlier competition acts were not
officially abolished” under the socialist government “but in practice they were
regarded as ineffective”.9 Citing Kornai,10 Ceres states that the shortage
economy that existed in Hungary during the period, “created a safe market for
the seller and the producer”, and they were as a result “neither interested in nor
motivated by quality investment, product innovation, or delivery times”.11
An economic system need not necessarily be socialist or centrally planned
for competition law to be dormant because other factors, as well, affect the level
of application of competition law. Based on South Korea’s experience, Choi
states that until 1980, “most competition laws appear[ed] to be dormant” owing
to “the absence of a competition law culture and inexperience with
enforcement”.12 Moreover, Choi notes that “competition policy will tend to lose
out in cases of serious conflict with other policy objectives, such as when the
government intervenes in private activities” thereby impeding “the development
of competition law enforcement” and making it “difficult to establish a
competition law culture”.13
South Korea’s competition law regime, “used to be similar to that of other
developing countries before its comprehensive competition law, the Monopoly
Regulation and Fair Trade Act (MRFTA), was first introduced in 1980”.14 Even
7 Magdalena Tulibacka (2009), Product Liability Law in Transition: A Central European
Perspective, Ashgate, p. 4.
8 Katalin Cseres (2004), “The Hungarian Cocktail of Competition Law and Consumer
Protection: Should It Be Dissolved?” Journal of Consumer Policy, 27: p. 46.
10 Kornai, J. (2000). The Hungarian reform process: Visions, hopes and reality. In: J. Kornai,
Evolution of the Hungarian economy 1848–1998, Volume II, Paying the bill for the
Goulash communism, pp. 7–119. New York: Columbia University Press, pp. 59, 71.
11 Cseres (2004), supra note 8, p. 46.
12 Yo Sop Choi (2014), “The Rule of Law in a Market Economy: Globalisation of
Competition Law in Korea”, European Business Organization Law Review 15: p. 420.
13 Id. p. 435.