This article was displayed on the ChosunBiz RM Report website at 5:14 p.m. on Mar. 23, 2026.
The four major commercial banks were hit with a 272 billion won penalty surcharge by the Korea Fair Trade Commission on allegations that they restricted the loan limit through an "information exchange" during the process of adjusting the loan-to-value (LTV) ratio.
The banks filed administrative lawsuits in protest, but the case did not proceed criminally because the Korea Fair Trade Commission (FTC) did not refer it to prosecutors. In legal and financial circles, various interpretations are emerging about why the assessments diverged between administrative sanctions and criminal liability.
According to the legal and financial sectors on the 24th, KB Kookmin, Shinhan, Hana, and Woori Bank are said to have filed lawsuits the previous day seeking to overturn the Korea Fair Trade Commission (FTC)'s imposition of a 272 billion won penalty surcharge. The previous day was the filing deadline for administrative suits.
This case is the first application of the "information exchange collusion" clause introduced by the 2021 amendment to the Fair Trade Act. The Korea Fair Trade Commission (FTC) determined that, as the banks adjusted their LTV ratios by referencing one another's information, the amount available for loans was reduced, thereby restricting market competition. The benchmark revenue used to calculate the penalty surcharge was about 6.8 trillion won.
◇Seventh-largest penalty surcharge on record, but no criminal referral
Although the banks were hit with the seventh-largest amount on record in terms of the penalty surcharge, there has been no movement on criminal proceedings. Under the exclusive referral system for Fair Trade Act violations, prosecutors can bring charges only if the Korea Fair Trade Commission (FTC) files a referral. But according to prosecutors, there was no referral from the Korea Fair Trade Commission (FTC) in connection with this LTV collusion case.
In legal circles, some say the decision may have been influenced by the difficulty of proving illegality and intent in criminal court for "soft concerted practices" such as information exchange. Traditional collusion (hard-core concerted practices) like price-fixing, output restrictions, and bid rigging has clear anti-competitive effects and thus clear illegality, but soft concerted practices such as information exchange may have ambiguous actual anti-competitive effects and require more meticulous investigation.
An antitrust specialist attorney at a major law firm said, "The Supreme Court has also shown that it should be cautious in recognizing intent for conduct where the anti-competitive nature is not clear," adding, "If it is difficult to conclude that a business operator clearly recognized at the time of the information exchange that anti-competitive effects would occur, the Korea Fair Trade Commission (FTC) may have felt burdened about referring the case to prosecutors."
However, the legal and financial sectors also note that if proving anti-competitive effects was difficult, the penalty surcharge should not have been imposed in the first place. They also say that, considering that the Korea Fair Trade Commission (FTC) recently imposed about 3.1 billion won in penalty surcharges in the pork price-fixing case and then referred it to prosecutors, corporations face significant uncertainty as to what criteria determine whether a referral is made.
◇No investigation without a Korea Fair Trade Commission (FTC) referral... will the exclusive referral system be scrapped?
Observers say the case also reexposed structural problems with the Fair Trade Act's exclusive referral system. The system was designed to prevent the overuse of complaints and referrals and thereby avoid constraining corporate management, but criticism has persisted that whether criminal proceedings begin can hinge on the Korea Fair Trade Commission (FTC)'s judgment. In fact, the number of Korea Fair Trade Commission (FTC) referrals and the number of individuals referred have been trending downward recently.
Even within the government, there are calls to abolish the exclusive referral system. President Lee Jae-myung said at a Cabinet meeting on Feb. 3, "Why must fair trade cases necessarily be referred by someone, and why is investigation, indictment, and even punishment impossible without a referral?" noting the need for reform. Korea Fair Trade Commission Chair Ju Biung-ghi also said during a National Policy Committee report on the 23rd of the same month, "In principle, it is desirable to abolish the exclusive referral system. That is my conviction."
As the possibility is raised that the investigative function for fair trade cases could be transferred to the Serious Crimes Investigation Agency, some say that for cases with criminal penalty provisions, investigative agencies should be able to review the nature of the case at a certain stage.
A lawyer who formerly served as a chief prosecutor said, "There have in fact been frequent cases where investigations could not even begin because there was no Korea Fair Trade Commission (FTC) referral," adding, "If a case could result in criminal penalties, there needs to be at least a channel for investigative agencies to check the relevant information."