The Fair Trade Commission (FTC) is tightening regulations on large business groups in the second half of this year. The agency plans to amend laws to impose fines on the heads of conglomerates if they fail to include affiliated companies in their submissions for designation as large business groups. Additionally, the FTC will expand disclosure requirements related to corporate ESG (environmental, social, and governance) management.
On August 4, the FTC announced its "2026 Second Half Major Work Plan" at the Blue House. The agency aims to establish a foundation for fair growth and reform monopolistic structures, focusing on four key tasks: establishing fair trade order in the livelihood sector, reducing power imbalances among economic entities, creating an innovative ecosystem in the digital market, and alleviating economic concentration among large business groups.
To begin with, the FTC will improve the regulatory framework for large business groups in the second half of the year. It plans to significantly strengthen penalties for omitting affiliated companies in designation submissions. Fines of up to 10% of the total assets and sales of the omitted affiliates will be imposed on the heads of conglomerates, and the criteria for reporting serious and repeated omissions will also be tightened.
The FTC will also enhance regulations related to self-dealing. Under the revised law, treasury stock will be excluded from the equity calculation for self-dealing regulations, and penalties will be applicable for omissions that occurred during unspecified periods. Appropriate fines will be imposed in proportion to the unjust profits gained by the heads of conglomerates through self-dealing.
Reforms will also be made to improve ownership and governance structures. To strengthen ESG management among large business groups, the FTC will add disclosure items such as the results of minority shareholder rights exercises and the status of compliance program operations. The penalty rates for repeated violations of disclosure obligations will be increased to enhance the effectiveness of sanctions. Additionally, new evaluation indicators for large business groups will be developed.
In the digital market, the FTC will focus on monitoring practices such as demanding best treatment from delivery apps, tying sales, and deceptive practices in online shopping. To this end, the agency will clarify types of legal violations and revise detailed criteria for applying laws in response to changes in the economic environment. Furthermore, it plans to investigate and rectify unfair advertising practices that mislead consumers regarding smartphone-related products and will conduct thorough checks on dark patterns in AI subscription services.
To reduce power imbalances among economic entities, the FTC will remove barriers that hinder collective bargaining. Small and medium-sized enterprises and small business owners will be excluded from collusion regulations in collective negotiations, and the right to form associations for subcontractors and dealers will be explicitly stated. Unfair subcontracting practices in national infrastructure industries such as shipbuilding and plants will be closely monitored, and standard dealer contracts in the petroleum distribution sector will be revised to reflect current realities.
Improvements will also be made to establish a fair trade order in the livelihood sector. The FTC plans to closely monitor collusion in the chemical, paint, and petroleum product sectors to prevent market disruption amid the chaotic international crude oil situation. Structural measures, including divestitures and business transfers, will be introduced to fundamentally resolve monopolistic structures in cases of abuse of dominant market positions.
The FTC will also rationalize its enforcement system in the second half of the year. To eliminate concerns about abuse of power, it will operate a "prosecution review committee" for individual agencies following the reform of the exclusive prosecution system. Starting in October, the FTC plans to refer legal violations to the Serious Crimes Investigation Agency.
Nam Dong-il, the FTC's vice chairman, stated, "In the second half of the year, we will work to alleviate economic concentration among large business groups and strengthen market monitoring through disclosure reforms," adding, "We are currently reviewing specific fines for profits gained through self-dealing."
* This article has been translated by AI.
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