Fair Decision?
South Korea’s Fair Trade Commission (FTC) made a final decision on July 18 to disallow SK Telecom from owning cable TV content provider CJ HelloVision and merging between its subsidiary SK Broadband and CJ HelloVision on the grounds that the deal may effectively limit competition in the paid broadcasting market as well as the telecom retail and wholesale markets.
The FTC added that the merger would damage competition through horizontal and vertical mergers, unlike previous cases in the broadcasting and communications sectors, so it is difficult to solve the problem with behavioral measures and partial asset sales alone.
As the FTC blocked the possibility of business consolidation, the Ministry of Science, ICT and Future Planning and the Korea Communications Commission (KCC), which have the final say over whether to approve the deal, canceled the review. SK Telecom and CJ HelloVision expressed regret that the deal had been rejected, but they would accept the FTC’s decision.
Accordingly, SK Telecom cannot acquire stocks of CJ HelloVision and merge between CJ HelloVision and SK Broadband.
Meanwhile, KT and LGU, which have opposed to the merger of the two companies, said in a corporate announcement, “The two companies have been concerned that SK Telecom’s plan to acquire and merge with CJ HelloVision would deepen the monopoly in the broadcasting and telecom market and harm consumer benefits. We believe that the FTC have made the decision considering such concerns.”