This article was displayed on the ChosunBiz RM Report website at 5:20 p.m. on Feb. 3, 2026.
Large corporations that have long influenced the prices of flour and sugar, key daily necessities in Korea, have been found to have once again committed an organized cartel crime despite past collusion records. Legal sources analyze that "a structural flaw in which the gains from collusion far outweigh the penalty surcharge is the cause of repeat offenses," as uncovered by a prosecution investigation. Along with punitive penalty surcharges, calls are growing for strong criminal punishment of individual corporate executives and employees.
According to legal sources on the 4th, the Seoul Central District Prosecutors' Office Fair Trade Investigation Department (Director General Na Hee-seok) indicted six flour milling companies on the 2nd on charges of colluding on flour prices. Among them, Daehan Flour Mills, Samyang Corporation, Sajo Dongaone, and Samhwa Flour Mills were found to have been sanctioned by the Korea Fair Trade Commission in 2006 for colluding on flour prices. CJ CheilJedang and Samyang Corporation, which were indicted in Nov. last year on charges of colluding on sugar prices, were also caught by the Korea Fair Trade Commission (FTC) in 2007 on the same charges.
The reasons why corporations previously sanctioned reengage in collusion are complex, but there is criticism that the Korea Fair Trade Commission (FTC)'s penalties lack sufficient deterrent effect. If the penalty surcharge is low compared with the economic gains obtainable from collusion, corporations may come to view collusion as effectively a "profitable deal."
◇ Collusion repeated under "slap-on-the-wrist" penalties
In fact, according to materials submitted by Heo Yeong, a Democratic Party of Korea lawmaker on the National Policy Committee, by the Korea Fair Trade Commission (FTC), cumulative sales related to collusion from 2020 to the first half of 2025 totaled 91.6398 trillion won, but the penalty surcharge amounted to only 2.2764 trillion won. The penalty surcharge-to-collusive sales ratio is about 2.5%.
The Korea Fair Trade Commission (FTC) imposes a penalty surcharge ranging from 0.5% to 20% based on sales directly or indirectly related to the collusion, depending on the severity of the violation. Although the surcharge cap was raised in 2021 from the previous 10% to 20%, actual imposition rates often fall far short of the statutory ceiling.
Recent cases are not much different. On the 21st of last month, the Korea Fair Trade Commission (FTC) found that the four major commercial banks—KB Kookmin, Shinhan, Hana, and Woori Bank—colluded on the loan-to-value (LTV) ratio for mortgage loans and imposed a total penalty surcharge of 272 billion won. Compared with the 6 trillion won in related sales calculated by the Korea Fair Trade Commission (FTC), the penalty surcharge is about 4%.
The case of sales incentives collusion by the three telecom companies—SK Telecom, KT, and LG Uplus—was similar. The Korea Fair Trade Commission (FTC) imposed a penalty surcharge of 96.3 billion won last year on charges that the three companies shared number portability subscriber information and restricted competition for about seven years starting in 2015. Considering that the Korea Fair Trade Commission (FTC) estimated related sales from number portability subscribers at about 10 trillion won, the penalty surcharge comes to around 1%. This is a sharp reduction compared with the maximum 5.5 trillion won surcharge outlook stated in the examination report, the equivalent of an indictment by prosecutors.
The problem is that imposed penalty surcharges can be reduced or canceled through administrative litigation. In the steel scrap collusion case, Hyundai Steel received a cancellation ruling on 90.9 billion won in surcharges at the Seoul High Court in Jan. this year and was ordered to have them recalculated, and in 2022 the Supreme Court canceled the Korea Fair Trade Commission (FTC)'s disposition in the case involving feed companies such as Harim Holdings and Daehan Feed, resulting in the full cancellation of 75 billion won in surcharges. However, the Korea Fair Trade Commission (FTC)'s win rate in administrative lawsuits against corporations has been rising, from 67% in 2017 to 90% in 2024.
◇ "Penalty surcharges alone are not enough… punish individuals more harshly"
Major countries overseas view collusion as a serious crime that undermines the order of free competition and respond more strictly. The European Union (EU) can impose a penalty surcharge of up to 10% of a problem corporation's worldwide sales, regardless of the size of the collusive gains. In the United States, the 2004 amendment to the Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA) raised the cap on criminal fines for colluding corporations from $10 million (about 14.4 billion won) to $100 million (about 144.3 billion won).
The government also appears to share the need to strengthen penalty surcharges. President Lee Jae-myung said at the Korea Fair Trade Commission (FTC) work briefing held at Government Complex Seoul on Dec. 19 last year, "We must make them feel that if they do it, they will get caught no matter what," and added, "There is a need to impose large-scale penalty surcharges on corporations." The Korea Fair Trade Commission (FTC) is currently preparing an amendment to the Monopoly Regulation and Fair Trade Act to raise the cap on collusion penalty surcharges from 20% to 30% of related sales.
Within the prosecution, which directly investigates collusion cases through the "right to request a complaint," there are calls that to eradicate recurring collusion, criminal punishment for individuals must be greatly strengthened. Since collusion is ultimately a crime in which individuals make decisions and carry them out, penalty surcharges on corporations alone lack deterrent power.
Recordings obtained by prosecutors during the intensive investigation of this collusion case also confirmed multiple remarks to the effect of "It ends with a fine," "You will get a suspended sentence," and "Don't worry, the company will take care of everything." This is interpreted to mean that the perception has hardened that even if one participates in collusion, individuals do not bear substantive responsibility.
Under Korea's Fair Trade Act, current criminal penalties are limited to up to three years in prison or fines of up to 200 million won. In contrast, the United Kingdom allows up to five years in prison or unlimited fines; Canada, up to 14 years in prison or unlimited fines; and Australia, up to 10 years in prison or fines of up to about 690 million won. Denmark provides for up to six years, and Romania and Japan for up to five years in prison.
In the United States, individuals bear strong criminal liability in collusion cases. Individuals can face up to 10 years in prison or fines of up to $1 million (about 1.4434 billion won). According to statistics from the Ministry of Justice Antitrust Division, from 2015 to 2024, 312 individuals were indicted for violations of antitrust laws such as collusion. Of these, 260 were convicted, and 142 were sentenced to prison and taken into custody in court.
A prosecution official said, "In investigations of suspects in Fair Trade Act violation cases, false, downplayed, and concealed statements repeatedly appear," adding, "Because the statutory penalty is low, individuals do not seem to fear punishment." The official added, "Only when the level of criminal punishment is raised will individuals actually feel the burden and refrain from participating in collusion."