Economic analysis has become a vital component in proving collusion as (i) Korean courts are less favorable to allegations made by the Korea Fair Trade Commission (KFTC) and (ii) suspected firms are more inclined to counter with economic analysis than ever before. Accordingly, this study examines the feasibility of economic analysis as a form of indirect circumstantial evidence in legally proving collusion conspiracies.

In response to the lack of existing research that systematically summarizes the economic analysis methodology to prove collusion, techniques were first categorized and analyzed by econometrics methodology, variable for analysis, environment of the analyzed market, data availability, etc. Indeed, the competition authorities could directly utilize such methods according to research conditions such as data availability and market specific practices. Additionally, they could make a manual to conduct analyses if the methodologies were systematically organized

This study also sought ways to improve the system for utilizing economic analysis in the collusion-proving process. The first and foremost factors in analyzing cartels are the quantity and quality of the workforce. The KFTC is now only at the initial stages of economic analysis and considerable efforts are still needed to secure specialized personnel and to educate existing research teams when compared to the organizations and use of manpower of the US and other advanced countries.

Besides, even with a reliable manual and competent analytical staff to carry out the economic analyses, competition authorities need adequate data to achieve the desired results. The procedure to secure data was centered on the examination of the US subpoena system. It was concluded that the introduction of the system would not be an easy task considering the differences in the legal environment between the US and Korea. Instead, a review was conducted on the recently introduced penal clause and charge for compelling compliance for intereference in KFTC investigations. The clause and charge have very similar mechanisms to the US subpoena system with regards to forcing the cooperation of suspected firms in investigations. Thus, the effectiveness of these schemes need to be closely monitored over time.

Progressive changes are also needed in the court’s rulings. Indeed, in some cases, the excessive demand for evidence resembles that of a criminal trial. Economic analysis is not without fault. However, it offers valuable insight into market conditions and colluding firms’ incentive structure which can be used as indirect circumstantial evidence to prove the collusion.

Finally, this study discusses legislations to punish information exchanges in competition. Unlike the US and EU and despite ample research that proves the contrary, such behavior is not penalized under current Korean law if there is no agreement on collusion. But, since some information exchanges can increase economic efficiency, an economic analysis may be required to confirm whether a specific information exchange behavior does in fact lessen competition.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Necessity of Enhancing Collusion-Proving Capabilities
　Section 1 Importance and Current Status of Cartel Cases
　Section 2 Current State of Collusion-Proving Practices
　Section 3 Changing Environment in Collusion-Proving
　Section 4 Status of Economic Analysis Utilization

Chapter 3 Economic Analysis in Collusion Investigations
　Section 1 Economic Theories on Cartels
　Section 2 Types of Economic Analysis by Econometric Methodology
　Section 3 Types of Economic Analysis by Object of Analysis

Chapter 4 Application of Economic Analysis in Collusion Investigations
　Section 1 Cases Where Similar Markets Exist
　Section 2 Cases with Both Colluding and Non-Colluding Firms
　Section 3 Cases Where Non-Collusion Period Data Is Available
　Section 4 Cases Without Suitable Comparative Data
　Section 5 Cases Where Cost Information Sharing Is Feasible
　Section 6 Cases Where Cost Information Sharing Is Difficult
　Section 7 Cases Where Regulations or Administrative Guidance Exist
　Section 8 Conclusion

Chapter 5 Institutional Improvements for Economic Analysis Utilization
　Section 1 Organizational Structure and Workforce Enhancement for Economic Analysis
　Section 2 Improvement of Data Acquisition Methods
　Section 3 Changes in Judicial Precedents Regarding the Fair Trade Act
　Section 4 Regulation of Anti-Competitive Information Exchanges

Chapter 6 Conclusion

References
ABSTRACT