This article was displayed on the ChosunBiz RM Report site at 11:11 a.m. on Sept. 11, 2026.
Court battles are mounting between corporations and the Korea Fair Trade Commission (FTC) over the agency's on-site investigation methods.
Hanwha took issue with a Researcher directly viewing an employee's mobile phone and keeping it for an extended time, while Coupang objected to an on-site investigation conducted without prior notice. The scope and procedures of the Korea Fair Trade Commission (FTC)'s administrative investigations, which proceed without a court warrant, have in succession landed before the judiciary.
Legal circles note that although the Korea Fair Trade Commission (FTC)'s probe is formally an administrative investigation, it is effectively quite coercive, as criminal penalties are on the books for refusing or obstructing an investigation. As corporations have begun to actively contest not only the content of investigations but the procedures themselves, attention is on whether this will affect the commission's investigative practices.
◇ Hanwha: "Directly manipulating an employee's phone, keeping it for 30 hours"
According to legal sources on the 11th, the Administrative Division 7 of the Seoul High Court (Presiding Judge Kwon Sun-hyung, Director General judge) on the 9th granted Hanwha's request to suspend execution against the Korea Fair Trade Commission (FTC). As a result, the effect of the commission's order for Hanwha to submit materials was suspended until Jan. 31 next year. This is the first time a court has suspended the effect of the Korea Fair Trade Commission (FTC)'s order to submit materials.
According to A's side, a Researcher from the Korea Fair Trade Commission (FTC) directly manipulated the mobile phone screen of Hanwha employee A while checking text messages exchanged between A and an accountant. The phone was kept in the investigation room for about 30 hours, and no document was provided explaining the circumstances and procedures of the custody, the person said.
It was also reported that male Researchers opened A's locker to check personal belongings in a public area and recorded the investigation without prior consent. The attorney present on-site objected to the scope and method of the investigation. A later reported psychological distress and is currently on leave, according to reports.
◇ Coupang: "It must be notified 7 days in advance"… Lawsuit over on-site probe without prior notice
Coupang challenged a different procedure. The Korea Fair Trade Commission (FTC) launched an on-site investigation at Coupang starting on the 19th of last month to secure materials related to alleged violations of the Large-scale Distribution Act.
However, Coupang did not comply, saying it had not been notified of the investigation in advance. Citing Article 17 of the Framework Act on Administrative Investigations, Coupang argues that the Korea Fair Trade Commission (FTC) must notify the investigation in writing seven days before it begins.
Under current law, administrative investigations in principle require prior notice, but some of the statutes under the Korea Fair Trade Commission (FTC)'s jurisdiction are excluded from application. However, since the Large-scale Distribution Act is not separately designated as an exception statute, it is subject to prior notice, in Coupang's view.
Coupang filed a lawsuit seeking to overturn the Korea Fair Trade Commission (FTC)'s on-site investigation decision along with a request to suspend execution. The court first temporarily suspended the effect of the on-site investigation decision until the 23rd of this month.
Attorney Jeon Min-jae of Sunun Law said, "The Korea Fair Trade Commission (FTC)'s on-site investigation presumes consent, but it is hard in practice to verify whether that consent was voluntary," and added, "This creates the possibility of excessive or broad viewing of digital data such as mobile phones."
Jeon added, "The Hanwha case showed that judicial control can, albeit in a limited way, intervene in the Korea Fair Trade Commission (FTC)'s investigations," and said, "It is meaningful in that it prompted a full-fledged discussion of whether past investigative practices were lawful."
◇ Refusing an investigation brings penalties… "Effectively highly coercive"
On-site investigations by the Korea Fair Trade Commission (FTC) are administrative investigations based on the Monopoly Regulation and Fair Trade Act and other laws. Public officials of the commission may enter the business sites of corporations under investigation to check ledgers, documents, and digital data, and may demand their submission.
However, from the corporations' standpoint, there is criticism that the Korea Fair Trade Commission (FTC)'s investigations are considerably coercive. This is because, without just cause, failure to submit materials or items, or refusing or obstructing an investigation, can lead to criminal penalties or sanctions such as fines.
Attorney Seok Geun-bae of Shin & Kim LLC said, "As the intensity of the Korea Fair Trade Commission (FTC)'s investigations and the level of sanctions such as the penalty surcharge have risen recently, corporations, when they judge there are procedural defects, are responding by raising issues more actively than in the past."
There are legal limits to the Korea Fair Trade Commission (FTC)'s investigations. It must not demand materials beyond the purpose and scope of the investigation, and if it keeps submitted materials, it must follow related procedures. Procedures to return or dispose of materials unrelated to the investigation are also required.
◇ Admitting Korea Fair Trade Commission (FTC) administrative-investigation materials as evidence in criminal trials is a 'point of contention'
If materials secured in an administrative investigation by the Korea Fair Trade Commission (FTC) lead to a prosecutorial complaint and a criminal trial, the issue could expand into a dispute over evidentiary admissibility. The Criminal Procedure Act in principle limits the admissibility of evidence collected without following due procedures.
However, the extent to which procedural illegality during an administrative investigation affects evidentiary admissibility in a subsequent criminal trial can be judged on a case-by-case basis, so it is hard to say a clear standard has been established.
In the Hanwha case, the core issue is whether the methods of viewing and keeping the mobile phone and the subsequent order to submit materials exceeded these limits. In the Coupang case, the court will decide whether the prior-notice obligation applies to investigations under the Large-scale Distribution Act and whether there were grounds for exceptions allowing omission of prior notice.
Professor Lee Hwang of Korea University School of Law said, "Because the Korea Fair Trade Commission (FTC)'s investigation is considerably coercive, if materials were secured amid procedural defects, their evidentiary admissibility may become an issue in a subsequent criminal trial."