Test-takers wait for their papers to be handed out at a public servant examination site in Seoul, March 2. Yonhap

Mega Study Chairman Son Joo-eun / Courtesy of Mega Study

Mega Study failed to acquire ST Unitas after the country's antitrust agency rejected the move on the grounds it would cause a monopoly over the country's cram school market for those wishing to become public servants, according to the antitrust agency, Thursday.

The Fair Trade Commission (FTC) released its decision that Mega Study, the country's second-biggest private education provider for adults and students from elementary to high schools, cannot acquire a 95.8 percent in ST Unitas, the market's biggest player. The authority said the merged entity would likely wield dominance over the market and threaten fair competition.

"We've surveyed a broad range of experts, from currently active instructors to officials from cram schools in the industry, to ascertain the deal's legitimacy," an FTC official said. "There are 400,000 students in the country who are now preparing for public servant examinations by paying to attend cram schools in the country. And the deal will pose a direct influence on them."

The FTC said if the market's two biggest schools were combined, students and instructors would concentrate on one giant school and the students could face a possible hike in membership fees. The authority predicted that the two schools, if combined, would claim a market share of between 67.9 percent and 75 percent.

"We've run an analysis to figure out how the deal would influence the market," the official said. "We've reached a conclusion that it would increase membership fees for the students. We've also found that a massive number of the country's most popular instructors would be concentrated in the combined school. It will prevent local cram schools in lower ranks from hiring popular instructors and jeopardize their competitiveness."

ST Unitas debuted on the market in 2012 and attracted many students nationwide by introducing an unprecedented special pass that allows students to take online lessons for unlimited time during a certain period. It caused many popular instructors to move to the company and gradually pushed it to take the market's biggest share. The school's membership fees soared.

But after Mega Study emerged in the market in 2019 and started rising in the market by hiring a large number of popular instructors, a rivalry between the two schools started shaping up. This prompted ST Unitas to lower its membership fees to attract more students.