Companies under Fair Trade Commission investigation will find it harder to delay with voluntary correction plans

Democratic Party Rep. Oh Ki-hyung Proposes Amendment to the Fair Trade Act

[Asia Economy Reporter Kim Eun-byeol] To prevent companies under investigation by the Fair Trade Commission for unfair practices from abusing the voluntary corrective action (consent decree) system to stall and evade sanctions, improvements to the system are being pursued.

On the 29th, according to the National Assembly and the Fair Trade Commission, Democratic Party lawmaker Oh Ki-hyung recently introduced a Fair Trade Act amendment bill that establishes a provision to suspend the statute of limitations on the disposition of the case when a company applies for a consent decree.

The consent decree is a system where if the Fair Trade Commission recognizes the corrective measures voluntarily proposed by the investigated company to remedy consumer and trading partner damages as reasonable, it concludes the case without confirming whether there was a violation of the law. Considering that it takes a considerable amount of time for the Fair Trade Commission to make a sanction decision, the consent decree has the advantage of quickly remedying consumer damages through the company's voluntary correction.

Since the consent decree system was first introduced into the Fair Trade Act in December 2011, 17 applications have been submitted, and 9 have been accepted. The Fair Trade Commission reviews whether the company's actions meet the criteria for prosecution by the prosecution and whether the content of the voluntary corrective measures is balanced with expected sanctions such as fines to decide whether to initiate the process. Even after initiation, if the company fails to implement the voluntary corrective measures without justifiable reasons, the Fair Trade Commission can cancel the consent decree and resume the main case review procedure.

In the case of Samsung Group, during the investigation of unfair support by Samsung Welstory, they submitted a voluntary corrective plan including a 200 billion KRW-scale mutual growth support plan and applied for a consent decree, but it was dismissed on grounds such as the matter being subject to prosecution.

Despite strict procedures and requirements, there are loopholes in the current consent decree system. There is no provision to suspend the statute of limitations on the disposition of the case during the consent decree process, allowing companies to "stall" through the consent decree and evade sanctions.

Under the Fair Trade Act, corrective measures and fines cannot be imposed after 7 years from the end of the violation. If a company receives a decision to initiate a consent decree from the Fair Trade Commission but only stalls without implementing the decision and the 7-year statute of limitations expires, there is no way to sanction the company.

The amendment bill proposed by lawmaker Oh stipulates that when a company applies for a consent decree, the statute of limitations on the disposition of the case for the applicant and other parties under review for the same case shall be suspended. However, the statute of limitations will resume when the applicant cancels the consent decree application, the Fair Trade Commission decides not to initiate the consent decree procedure, the Fair Trade Commission decides not to proceed with the consent decree, the consent decree is fully implemented, or the consent decree is canceled.

The Fair Trade Commission also agrees with the purpose of this bill. In February, when announcing the final consent decree decision on Apple Korea, which was accused of power abuse, Chairman Cho Sung-wook stated, "It took about 19 months from the consent decree application to the final confirmation, which was longer than initially expected," and added, "We plan to thoroughly review the entire system and prepare improvement measures so that the consent decree system can be operated quickly and efficiently in line with its original purpose." Since then, various system improvement measures have been considered, and regarding the statute of limitations issue, the Commission views lawmaker Oh’s amendment as a solution and intends to observe the National Assembly discussions.

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