"Economic Prosecution" a Thing of the Past? Fair Trade Commission's Case Handling Performance Hits Lowest in 20 Years

[Sejong=Asia Economy Reporter Son Seonhee] The Fair Trade Commission (FTC) recorded the lowest number of case resolutions in 20 years last year. Known as the "economic prosecutor" for monitoring and sanctioning various unfair practices in the business sector, there are concerns that its enforcement has weakened.

According to the recently published "40 Years of the Fair Trade Commission" report on the 9th, the FTC imposed a total of 1,298 sanctions last year, including indictments, fines, corrective orders, and warnings. This is the smallest number since 2000 (1,027 cases) in 20 years.

By category, there was a noticeable decrease in violations of the Franchise Business Act (-55.9%), prohibited acts by business associations (-55.3%), and unfair labeling and advertising (-31.6%). Sanctions on unfair subcontracting practices such as price gouging also decreased by 20.9%. Sanctions related to unfair trade, unfair contract terms, abuse of market dominance, and violations of the Electronic Commerce Act, Door-to-Door Sales Act, and Installment Transactions Act all declined. Only violations of the Concentration of Economic Power Act, unfair joint actions, and violations of the Large-scale Retail Business Act and Agency Act increased.

The number of FTC sanctions has been on a downward trend every year since 2017, the first year of the Moon Jae-in administration, when it dropped 19.3% from the previous year to 1,840 cases, followed by 2018 (1,820 cases, -1.1%), 2019 (1,728 cases, -5.1%), and 2020 (1,298 cases).

In particular, last year saw a sharp decline of 24.9% compared to the previous year, accelerating the downward trend since Chairman Cho Sung-wook took office in the fall of 2019. All types of sanctions, including indictments, corrective orders, corrective recommendations, and warnings (including voluntary corrections and fines), decreased.

The FTC received criticism for falling short of expectations in improving the gap between dominant and subordinate parties and was rated the lowest in all categories in the "2020 Government Performance Evaluation" after current and former employees were implicated in requests for reductions in fines.

Inside the FTC, there were reports of dissatisfaction that focusing on the enactment of the Online Platform Fairness Act and amendments to the Electronic Commerce Act last year pushed its core duties to the background. This year’s FTC work plan prioritizes "establishing a fair trade order in the digital market" as the top task, while "sanctions on the private interests of chaebol families," which was the top priority until 2018, has been pushed down to third place.

The FTC explained that "the number of cases handled from 2017 to 2020 decreased compared to previous periods," and added, "Since the Agency Act has been in effect since December 2016, related case handling is expected to gradually increase."

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