If the Top Whistleblower in Collusion Cannot Succeed the Position, at Least the Second Whistleblower Will Receive a Reduction

Fair Trade Commission to Implement Revised Voluntary Reporters' Reduction System Operation Notice on the 10th

[Sejong=Asia Economy Reporter Joo Sang-don] Previously, if the first-priority voluntary reporter did not cease collusion and thus failed to receive a reduction due to their own fault, the second-priority voluntary reporter without any particular fault also faced the possibility of not receiving a reduction. Going forward, however, reductions will be guaranteed in proportion to the contribution to the detection of collusion.

The Fair Trade Commission (FTC) announced on the 9th that it has revised the "Operation Notice on Reduction System for Voluntary Reporters of Unfair Joint Acts, etc." and will implement it starting June 10.

The voluntary reporter reduction system is a system that reduces sanctions for businesses that voluntarily report their collusive acts and actively cooperate with investigations. The first voluntary reporter (first-priority reduction recipient) who reports the fastest is exempt from 100% of fines, corrective orders, and prosecution. The second voluntary reporter (second-priority reduction recipient) is exempt from prosecution like the first-priority reporter and receives a reduction of 50% on fines and corrective orders.

According to the existing reduction notice, when there are two or more voluntary reporters, if the first-priority voluntary reporter's reduction application is not recognized, the subsequent voluntary reporter automatically inherits the earlier voluntary reporting rank. In this case, if the first-priority reporter fails to meet the recognition requirements?such as ▲providing sufficient materials ▲sincerely cooperating with the investigation ▲ceasing the collusion voluntarily?the second-priority reporter automatically becomes first-priority, but must fulfill the first-priority recognition requirements.

Because of this, second-priority voluntary reporters who do not meet the first-priority requirements have been unable to receive reduction benefits for either the first or second priority voluntary reporters. This is because when the first-priority voluntary reporter has already submitted various materials diligently, the FTC has already secured sufficient evidence to prove collusion by the time the second-priority business reports voluntarily, making it difficult for the second-priority voluntary reporter to meet the requirements.

Accordingly, the FTC decided that if the first-priority voluntary reporter's reduction application is not recognized due to their own fault, the second-priority voluntary reporter will receive at least the second-priority reduction depending on whether they can meet the first-priority requirements. If the first-priority requirements cannot be met, the first-priority rank will not be automatically inherited, and the second-priority reduction will be granted. If the first-priority requirements can be met, the second-priority reporter will inherit the first-priority rank and receive the first-priority reduction as before.

Regulations related to the additional reduction system were also supplemented. Since 2005, the FTC has operated an "additional reduction system" that further reduces fines for businesses that voluntarily report or cooperate in investigations of collusion A and then additionally report another collusion B as first-priority. To receive the additional reduction, the voluntary report on collusion B must be made ▲after the earlier of the investigation start date or voluntary report date for collusion A ▲and before the FTC's deliberation date on collusion A.

The scope of voluntary report corrections was also improved. Under current regulations, when voluntarily reporting, only an overview of the collusion is initially recorded, and detailed materials or supplementary details can be submitted later. Corrected materials are recognized as submitted on the original voluntary report date. If a single voluntary report is corrected to be considered a joint voluntary report, such correction is only allowed within the regular correction period of 75 days. Also, reflecting precedent that submission of materials beyond the originally reported scope of collusion cannot be considered a correction of the original report, submissions related to separate collusions are regarded as separate voluntary reports, not corrections.

An FTC official said, "With this revision of the notice, some shortcomings of the leniency system have been improved and regulations clarified, enhancing predictability for businesses and increasing incentives for active cooperation in investigations. We expect the leniency system to be more vitalized." He added, "Accordingly, detection and prevention of collusion through the operation of the leniency system are expected to be more effective."

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