The government's anti-trust watchdog has reiterated the need to scrap the nation's screen quota system, citing that the import restriction is outdated and conflicts with free market principles.

In a report submitted to a ruling party lawmaker, the Fair Trade Commission said Sunday that lifting or abolishing the quota is part of a long-term strategy to develop local movies, adding that the system is counterproductive.

The commission said local filmmakers have churned out low-quality productions to meet the quota, resulting in a waste of money and human resources.

Under the current quota system, domestic theaters are required to show Korean movies at least 40 percent of their screening days. The regulations are aimed at protecting the local movie industry from competition from overseas, mostly from Hollywood blockbusters.