This paper investigates the determinants of the surcharges imposed on the cases of Unfair Taking Advantage of a Position in the Business Area clause of Korean Fair Trade Act. The results show that surcharge is imposed only on corporations that caused damages to specific victims. Higher surcharge is likely when the defendant is a principal customer to the victim or when the damages are nationwide. However, the surcharge rate increases less than proportionately with the size of the defendant firm. Theses results imply that the primary purpose of the clause is ex post arbitration of business disputes rather than ex ante prevention of anti-competitive behavior through strong penalties.

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