Introducing 'Triple Lawsuit and Consent Resolution System' for Dealership Collective Bargaining Rights and Remedial Measures

'Partial Amendment to the Agency Act' Passed at the Cabinet Meeting

Explicit Provision of Collective Organization Rights and Prohibition of Disadvantageous Treatment
Addition of Retaliatory Measures to Triple Damages Application Targets
Introduction of Consent Decision System for Violations of the Agency Act

[Sejong=Asia Economy Reporter Joo Sang-don] To enhance the bargaining power of agencies and enable prompt and substantive relief for damages, the rights to form agency collectives and the consent decision system will be introduced.

The Fair Trade Commission announced that the partial amendment bill of the Agency Act containing these provisions passed the Cabinet meeting on the 22nd.

The partial amendment bill of the Agency Act, which passed the Cabinet meeting this time, was previously announced for legislative notice from July 29 to September 7 this year. The main contents include ▲explicit provision of agency collective organization rights ▲introduction of triple damages for retaliatory measures ▲introduction of the consent decision system ▲establishment of grounds for recommending model transaction standards ▲introduction of bottom-up procedures for the establishment and revision of standard contracts ▲and establishment of grounds for conducting and entrusting education and counseling related to agencies.

First, the amendment explicitly provides the right of agencies to form collectives. Although freedom of association is guaranteed under the Constitution, allowing free formation of collectives even without provisions in the Agency Act, there was a passive aspect toward collective formation and activities due to the lack of explicit legal grounds in the Agency Act. According to an actual agency status survey, the rate of agency business entity membership was only about 14.9% to 23.0% between 2017 and 2019. Accordingly, the amendment explicitly provides the right to form agency collectives and prohibits suppliers from providing disadvantages based on such collective formation, membership, or activities.

Triple damages for retaliatory measures will also be introduced. Retaliatory measures that disadvantage agencies due to dispute mediation applications, reports to the Fair Trade Commission, or cooperation with investigations are considered the most malicious prohibited acts under the Agency Act. However, they were excluded from the current triple damages (punitive damages) targets, limiting the compensation liability for illegal acts. Therefore, the amendment adds retaliatory measures to the targets for triple damages application.

The consent decision system will also be introduced for violations of the Agency Act. The consent decision system allows a business under investigation or review by the Fair Trade Commission to submit corrective measures to the Commission. If the Commission recognizes these measures as appropriate, it concludes the case by making a decision with the same intent as the corrective measures without judging the illegality of the act. This system is introduced to promptly and effectively remedy damages suffered by agencies due to unfair acts.

Additionally, the amendment includes provisions allowing the Fair Trade Commission to establish desirable industry-specific transaction standards and recommend them to suppliers, and allowing suppliers and agencies to request the establishment or revision of standard agency contracts to the Commission. It also enables education and promotion activities to establish orderly agency transactions and allows entrustment of these activities to specialized institutions.

The Fair Trade Commission plans to submit the amendment bill to the National Assembly after presidential approval and other procedures. Even after submission to the National Assembly, it will actively support the legislative review process to ensure the amendment bill passes promptly.

This content was produced with the assistance of AI translation services.