This article was displayed on the ChosunBiz RM Report website at 3:38 p.m. on Mar. 25, 2026.
Prosecutors currently investigating alleged price collusion by the four major refiners have carried out a search and seizure of the industry group Korea Petroleum Association (KPA). Legal circles are watching whether this case could become the first criminal case to put "information-exchange collusion" at the forefront. If the investigation leads to a complaint by the Korea Fair Trade Commission and an indictment, the new type of collusion introduced by the 2021 amendment to the fair trade law will appear in a criminal court for the first time.
According to legal sources on the 25th, prosecutors have been conducting searches and seizures since the 23rd at the four refiners SK Energy, GS Caltex, S-Oil, and HD Hyundai Oilbank. The Korea Petroleum Association (KPA) was also included among the targets. Prosecutors are said to be widely securing materials not only from the period when international oil prices spiked due to the recent Middle East situation, but also from past periods of high oil price volatility.
◇Prosecutors target the association as well… confirming the "information-exchange channel"
Legal attention is focused on the search of the association. There is an interpretation that prosecutors, as they look into how prices were set among refiners, are trying to confirm whether the association served as a channel for information exchange.
As the basis for the investigation, Article 40 of the amended fair trade law, enforced in Dec. 2021, is being cited. It defines exchanging competitively sensitive information such as prices and production volumes that restrict competition as a new type of collusion. It includes costs, shipment volume, inventory, sales volume, transaction terms, and payment terms.
Unlike traditional price agreements, output restrictions, or bid rigging, information-exchange collusion is classified as a "soft cartel." Unlike conventional collusion, whose anticompetitive effects are relatively clear, proving that information exchange actually led to a restriction of competition is more demanding.
The key issue is the role of the association. The crux is whether it was merely a window for compiling statistics or a medium that connected information among refiners. The Korea Fair Trade Commission (FTC) views indirect information exchange through a business association as potentially illegal. On the other hand, if the information was not shared externally, it is also possible to interpret that it is difficult to deem it collusion.
Prosecutors' search of the association also aligns with this. Through meeting materials, distributed documents, and communication records, they aim to reconstruct what information was delivered to whom.
An attorney at a major law firm who requested anonymity said, "The fact that prosecutors searched the association likely means they are looking to see whether there were information exchanges or contacts through the business association," adding, "In practice, there are not a few cases where signs that information such as prices or shipment volumes passed through association-led gatherings become the key issue." The attorney added, "By looking at internal association documents, it should be possible to confirm what information was delivered to whom."
◇"Not easy to prove"… a high bar to criminal punishment
Information-exchange collusion is not easy to prove. In a 2015 instant noodle price case, the Supreme Court found that the fact of information exchange alone could not establish price collusion. Although the law was amended to define information exchange as a separate type, the burden of proof still lies with prosecutors.
In particular, unlike other forms of collusion, this provision does not apply the "presumption of agreement." Prosecutors must prove the content, frequency, timing, and intent of the information exchange, as well as its linkage to the actual price trajectory.
As a comparison, observers cite a recent case in which the Korea Fair Trade Commission first applied this provision to the loan-to-value (LTV) case involving the four major commercial banks. At the time, the commission found that the banks exchanged internal information and maintained similar levels, and imposed a penalty surcharge in the 200 billion won range. However, that was an administrative sanction, and there was no criminal referral to prosecutors, because the evidentiary standard required in criminal trials is higher.
The refiners are likely to argue that prices converged due to market factors such as international oil prices, exchange rates, taxes, and refining margins. They are also expected to counter that association materials were for industry analysis or government response.
There is also the hurdle of criminal procedure. Collusion is punishable by up to three years in prison or a fine of up to 200 million won, but a complaint from the Korea Fair Trade Commission is required to indict. As this case began without an FTC complaint, whether prosecutors can bring about such a complaint is seen as the biggest variable.