Starting on the 30th, if a company is caught colluding, it must pay at least 10% of the related sales as a penalty surcharge. This is 20 times higher than the current level (0.5% of related sales).
The Korea Fair Trade Commission said on the 28th it will implement on the 30th a revision to the "Notice on detailed standards for imposing penalty surcharges" reflecting these changes. The core of the revision is raising the lower bound of the imposition standard rate. When calculating a penalty surcharge, a certain percentage is multiplied by the sales gained from the illegal act, depending on the level of severity; this percentage is the imposition standard rate. If the lower bound of the imposition standard rate rises, the minimum level of the penalty surcharge also increases.
The Korea Fair Trade Commission (FTC) raised the minimum imposition standard rate for all violations of the Fair Trade Act, including collusion. In the case of collusion, the current minimum imposition standard rate is 0.5% for low severity, 3% for high severity, and 10.5% for very high severity. Going forward, these will be raised to 10%, 15%, and 18%, respectively.
The lower bound of the imposition standard rate for providing unfair benefits to related parties also rose from 20% to 100%. The upper bound increased from 160% to 300%. For businesses that repeatedly violate the law, penalty surcharges will be further aggravated. Currently, if there is one violation in the past five years, the surcharge is increased by 10%, and up to 80% depending on the number of violations. Going forward, even with only one prior violation, it can be increased by up to 50%, and up to 100% depending on the number of violations.
Businesses that cooperated during the Korea Fair Trade Commission (FTC)'s investigations and deliberations could have their penalty surcharge reduced by up to 20%, but this will be cut to 10%. The reduction rate for voluntarily remedying violations will also be reduced from 30% to 10%.
The Korea Fair Trade Commission (FTC) said, "A basis has been established to impose strong sanctions on collusion that harms people's livelihoods, regardless of whether companies are large or small," adding, "We expect collusion, which has caused significant damage to markets and the livelihood economy, to be dramatically eradicated."