The Korea Fair Trade Commission said on the 23rd it will push a plan to order the dismissal of executives at corporations caught colluding. The Korea Fair Trade Commission (FTC) said it prepared the plan by referring to overseas cases in the United Kingdom and Australia.
The United Kingdom and Australia are said to allow courts, under the Company Directors Disqualification Act and the Competition and Consumer Act, respectively, to order the disqualification of executives at corporations that engaged in collusion. In fact, there have been cases in which courts, finding collusion allegations substantiated, ordered executives to be dismissed.
◇ U.K. court orders dismissal of executives at construction firms for "collusion"… appeal also dismissed
According to ChosunBiz reporting, the Competition and Markets Authority (CMA) requested court orders in 2023 to dismiss four executives for involvement in bid-rigging in a case involving 10 construction companies. A U.K. court found the evidence showed they were involved in collusion and issued dismissal orders.
Nicholas Brown, CEO of construction firm Brown and Mason, who received a dismissal order at the time, applied to the court for an exception, saying "allow me to continue running the company," but the High Court in February 2024 dismissed the request.
Australia's Competition and Consumer Act provides that a court may prohibit a person who engaged in collusion from involvement in managing corporations. In 2024, an Australian court ordered the CEOs of Sydney-area waste disposal companies Bingo Industries and Aussie Skips, accused of colluding on service prices, to be prohibited from corporate management and serving as directors for five years.
An official at the Korea Fair Trade Commission (FTC) said, "The U.K. and Australia treat collusion as a serious crime, so court rulings tend to be strict," adding, "Businesses may raise various concerns, such as excessive interference in management, but because the policy goal is to eradicate the serious crime of collusion, we are prioritizing stronger penalties."
◇ Korea Fair Trade Commission (FTC) also reviewing structural measures such as business divestitures… EU orders equity disposal
Meanwhile, the Korea Fair Trade Commission (FTC) said it will also review structural measures against colluding corporations. Structural measures mean imposing direct sanctions on a corporation's property rights or organizational structure, such as ordering a business divestiture. The Korea Fair Trade Commission (FTC) did not specify which measures it would take. Overseas, there are cases in which authorities order the sale of the problematic business unit as a structural remedy for corporations that violated competition laws.
The European Union (EU) executive body last year ordered Delivery Hero (DH), the parent company of the Baemin food delivery app, to sell its equity in its affiliate, Spanish delivery service company Glovo, on suspicion of sharing trade secrets with Glovo. DH has filed a lawsuit with the European Court of Justice (ECJ) against the equity sale order. DH said, "Equity ownership is a legitimate investment activity, and ordering its sale is an excessive infringement of property rights."