韩国公平交易委员会拟对三星电子处以200亿韩元罚款：游戏广告存在误导

English version

What happened

South Korea's antitrust regulator said it plans to impose a provisional fine of 200 billion won on Samsung Electronics, on the grounds that its advertising was misleading.

The economics

The case illustrates competition policy: a regulator investigates and proposes a fine against a firm with market power in order to constrain its conduct and protect competitive market outcomes. The misleading advertising also reflects information failure, since consumers decide on incomplete information, so government intervention is used to correct the resulting misallocation.

Figures to quote

• 200 billion won

Evaluation

Whether the fine changes behaviour depends on how large it is relative to the firm's size; regulation also raises compliance costs, and consumers may not benefit directly in the short run.

Practice question

Using the case of the proposed fine on Samsung Electronics, analyse the case for and limitations of government intervention when consumers face information failure.