The Fair Trade Commission (FTC) will eliminate the cap on reward payments related to violations of the Direct Sales Law. Additionally, the commission will now provide rewards to employees involved in such violations, aiming to facilitate the early detection of concealed infractions.
On August 4, the FTC announced that it will prepare a revision of the enforcement decree for the Direct Sales Law, which will be open for public comment until September 14. This revision follows changes made in June to the reward payment regulations for whistleblowers reporting violations of the Fair Trade Act.
Currently, the reward payment cap is set at 10 million won. Unlike other laws overseen by the FTC, the Direct Sales Law directly stipulates this cap in its enforcement decree. As a result, merely amending the reward regulations was insufficient to increase the reward amount.
The proposed revision will remove the reward cap, allowing whistleblowers to receive up to 10% of the maximum penalty imposed for violations under the revised reward regulations.
Furthermore, the scope of eligible recipients for rewards will be expanded to include employees involved in the violations. The current enforcement decree excludes both the violating business operators and their employees from receiving rewards.
By allowing rewards for employees involved in violations, the FTC believes it will enhance the likelihood of securing evidence related to infractions, thereby increasing the chances of early detection of concealed violations. Additionally, the possibility of internal whistleblowing may deter future violations.
The FTC stated, "Through the revision of the enforcement decree, we aim to promote internal reporting of violations of the Direct Sales Law, which are often concealed. We believe this will enhance the effectiveness of law enforcement and help prevent consumer harm by enabling early detection of violations and rapid mitigation of damage."
* This article has been translated by AI.
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