The Korea Fair Trade Commission (KFTC) has expanded the use of its investigation data for damage lawsuits filed by affected companies. The revised law will also establish a procedure allowing whistleblowers to request a reinvestigation when the KFTC determines there is no violation.
The KFTC announced that amendments to the Fair Trade Act and the Subcontracting Act passed the National Assembly on August 20.
Under current law, while courts can request the KFTC to send case records, the KFTC is not explicitly obligated to comply. Concerns about breaching confidentiality obligations when submitting materials obtained during investigations have limited the use of KFTC data in civil lawsuits.
The amended law allows courts to order the KFTC to submit materials after the KFTC has concluded its disposition on a case, provided that the parties involved have made significant efforts but still cannot secure necessary evidence. However, materials related to leniency for voluntary reporting, internal documents created for investigation and review, and documents restricted from disclosure under other laws are excluded from this requirement.
While trade secrets are generally protected, courts can require their submission if deemed essential for proving legal violations or damages. In such cases, the court may limit who can access the materials and the scope of that access.
A new confidentiality order system will be introduced to prevent the use of trade secrets obtained during litigation for purposes outside the trial or their disclosure to third parties. The grounds for a court to order the submission of materials will expand from merely proving damages to also include proving legal violations. The scope of application will also broaden from certain collusion and unfair trade cases to all damage claims under the Fair Trade Act.
The same data submission system will apply to damage lawsuits under the Subcontracting Act. This will enable affected subcontractors to utilize KFTC investigation data to prove the primary contractor's illegal actions and the extent of damages.
A new procedure for whistleblowers to request a reinvestigation will also be established. If the KFTC decides there is no violation, it must inform the whistleblower in writing of the decision and the reasons for it. The whistleblower can then request a reinvestigation within 30 days of receiving the notification.
The validity of the reinvestigation request will be reviewed by a 'Whistleblower Reinvestigation Request Review Committee' composed of public officials and private members. If the request is deemed valid, the KFTC must assign a different investigator from the original case handler to conduct the reinvestigation. Specific procedures will be determined by presidential decree.
The amendment also includes provisions to exclude the duration of effectively conducted dispute resolution from the calculation of the possible disposition period for subcontracting cases. However, periods during which a resolution request is withdrawn or dismissed, or where litigation halts the resolution process, will still be included in the disposition period. The starting point for calculating the period will change from the 'date of reporting' to the 'date of receipt of the report.'
The revised law will be promulgated after passing through the government and the State Council, and is expected to take effect one year after its promulgation.
* This article has been translated by AI.
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