On May 21, the FTC stated that it will conduct a 20-day public notice period until June 10 for a proposed amendment to the regulations governing rewards for whistleblowers reporting violations of the Fair Trade Act.
The amendment aims to encourage insiders to report unfair trade practices, such as collusion, to enhance the detection and correction of legal violations. Ultimately, it seeks to strengthen deterrence against corporate misconduct and establish a fair market economy.
The current reward limits range from 100 million won to 3 billion won, which the FTC believes have deterred potential whistleblowers due to insufficient compensation relative to the risks involved in reporting. The amendment reflects the understanding that collusion among companies often occurs secretly, making it difficult to detect or prove violations without insider reports.
To address these issues, the FTC plans to simplify the reward calculation method, setting the reward at 10% of the total fines imposed, while also considering the whistleblower's contribution. The FTC believes that larger rewards will incentivize more active reporting of significant legal violations.
Additionally, the timing of reward payments will be adjusted. Under the current system, rewards are paid within three months of a legal ruling on the violation, which can lead to issues when the final legal status of the fines is not yet determined.
Moving forward, the FTC will pay a basic reward once the fines are initially paid into the national treasury, with the remaining rewards distributed after the final determination of the fines.
An FTC official stated, "Through the improvement of the whistleblower reward system, we aim to reinforce our strict response to collusion and other unfair practices, while encouraging active reporting from both insiders and outsiders. We expect this will further strengthen the deterrent effect against legal violations."
* This article has been translated by AI.
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