South Korea raises minimum antitrust fines for cartels to 10%, seeks full recovery for unfair support

The Fair Trade Commission will sharply raise the minimum rates used to calculate administrative fines for violations of South Korea’s Fair Trade Act, including a steep increase for cartels and tougher penalties for unfair support and private-benefit schemes.

The FTC said on the 29th it will enforce revised fine guidelines starting on the 30th. Violations that ended before the effective date will be handled under the previous guidelines.

Under the act, the FTC calculates fines based on sales related to the violation, multiplied by a rate that varies by the seriousness of the conduct. The revision significantly raises the minimum rate applied across violation types.

For cartels, the minimum rate will rise to 10% from 0.5%. For serious cartels, it will increase to 15% from 3%, and for very serious cartel conduct, to 18% from 10.5%.

For unfair support and private-benefit schemes, where fines are based on the amount supported or provided multiplied by a rate, the minimum rate will rise to 100% from 20%. That allows the FTC to recover the full amount of support or provision as a fine regardless of the assessed seriousness. The maximum rate will also jump to 300% from 160%, enabling punitive-level fines.

Surcharges for repeat offenders will be strengthened. Currently, a company with one violation in the past five years faces an increase starting at 10%, rising up to 80% depending on the number of violations. Under the revision, a single prior violation can trigger an increase of up to 50%, and the increase can reach up to 100% depending on the number of violations. For cartels, any prior record of an order to pay fines within the past 10 years can lead to an increase of up to 100%.

The FTC will also remove or narrow discretionary reductions. Companies that cooperate during the investigation and deliberation stages can currently receive reductions of 10% at each stage, up to 20% total. Under the revision, a reduction of up to 10% will be available only when a company cooperates consistently from the investigation through the end of deliberations. The maximum reduction for voluntary corrective action will be cut to 10% from 30%, and a 10% reduction for minor negligence will be eliminated.

The FTC said the revision is intended to end the practice of treating fines as a routine cost of doing business and to strengthen fair competition. It added that the new rules provide a basis for strong sanctions against cartels that harm people’s livelihoods and said it expects cartel conduct to be dramatically curbed.



* This article has been translated by AI.

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