President Lee Jae-myung said the system of exclusive complaint authority held by the Korea Fair Trade Commission needs improvement. He signaled concern that, under a structure concentrating complaint authority in the Korea Fair Trade Commission (FTC), it is difficult to effectively punish large-scale unfair trade.
At a Cabinet meeting at the Blue House on the 3rd, President Lee said, "The Korea Fair Trade Commission has too much power," adding, "We should either abolish the exclusive complaint authority or allow a certain number of citizens to file complaints."
President Lee continued, noting the structural limits of the system: "Why is it that in fair trade cases someone must file a complaint, and if no one does, there can be no investigation, no indictment, and no punishment? Isn't that strange?"
Under the current Fair Trade Act, criminal punishment for collusion or unfair trade practices requires a complaint by the Korea Fair Trade Commission (FTC). The system was introduced to prevent the chilling of corporate activity and the overuse of complaints, but criticism has persisted that it restricts the start of investigations themselves. However, the prosecution or the Ministry of SMEs and Startups can request that the Korea Fair Trade Commission (FTC) file a complaint.
Citing a recent case in which prosecutors indicted company officials over price collusion in sugar and flour, President Lee examined the problems of the exclusive complaint authority from the perspective of consumer harm. He said, "Flour and sugar are not related to (small businesses vulnerable to over-reporting), and ordinary consumers are harmed," adding, "Consumers ended up eating expensive bread due to (price collusion), but consumers are not allowed to file complaints, are they?"
He also criticized explanations regarding the Korea Fair Trade Commission (FTC)'s staffing shortages. President Lee said, "From what I hear, it's because there is a severe lack of personnel (to handle cases at the Korea Fair Trade Commission (FTC)), but it is a problem of a society that violates too much. If they say they only take on cases that are reported because there are too many, that is too arbitrary," adding, "If everyone is violating the rules but they only go after people they dislike or those with special reasons, does that make sense? That is not a normal society."
President Lee said, "Why is it that someone who steals eggs is always caught and punished, but when corporations commit such massive crimes against the public, there are so many obstacles to punishment?" He added, "It would be good to change things fundamentally and dramatically."
At the meeting, Korea Fair Trade Commission Chairperson Ju Biung-ghi reported on the flour and sugar collusion case, saying, "We will handle this as sternly as possible to send a strong warning." In response, President Lee said, "We really need to sound a warning," adding, "When the bell rings, people should be startled, but they are not. It's a warning only if they are startled."
The Cabinet also discussed measures to substantially strengthen monetary sanctions for collusion and other unfair practices. Chairperson Ju reported that if the severity of collusion is determined to be moderate or serious, the Korea Fair Trade Commission will push to introduce a penalty surcharge floor so that the amount cannot be reduced below a certain level. The aim is to enhance the effectiveness of disgorging unjust gains by revising enforcement decrees or notifications.
Use of the Korea Fair Trade Commission (FTC)'s price readjustment orders will also be greatly expanded. Chairperson Ju said he would revise related operating guidelines to more actively apply price readjustment orders as corrective orders to return prices raised by collusion to normal levels, an authority that has so far been used sparingly.
Plans to raise the ceiling on penalty surcharges will proceed in parallel. Chairperson Ju explained that he is preparing an amendment to the Fair Trade Act to increase the proportional penalty surcharge ceiling, currently set at 20% of relevant sales, to 30%. In response, President Lee Jae-myung said that if the level of punishment is low compared to the profits from the crime, it is difficult to prevent recidivism, and he ordered, "Establish strict rules."