Fair Trade Commission to Reduce Up to Half of Penalties for Voluntary Correction of 'Subcontracting Gapjil'

[Asia Economy Sejong=Reporter Dongwoo Lee] Businesses that voluntarily correct unfair practices will be able to receive a reduction of up to half of the fines.

The Korea Fair Trade Commission (KFTC) announced on the 7th that it will hold an administrative notice from the 8th to the 28th regarding the revision of the fine notification in the fields of subcontracting, franchising, distribution, and agency.

Under the current regulations, if unfair practices in the fields of subcontracting, franchising, distribution, and agency are voluntarily corrected, fines can be reduced by up to 30%, and in the case of agency-related unfair practices, fines can be reduced by up to 20%.

The revision plan expands the maximum reduction of fines to 50% for voluntary correction. The revision is scheduled to take effect in early January next year.

The KFTC explained, "This revision was prepared to encourage prompt relief of damages through voluntary correction by businesses violating the law."

Even if the KFTC issues corrective measures for unfair practices in subcontracting, franchising, distribution, and agency fields, small and medium-sized enterprises (SMEs) or small business owners must file additional damage compensation lawsuits to receive relief.

Since it is important for SMEs or small business owners with limited financial resources to receive quick relief, the plan is to increase the reduction rate of fines so that businesses violating the law voluntarily correct their mistakes and proceed with damage relief.

The KFTC also decided to raise the upper limit of the fixed fine applied when it is difficult to calculate the violation amount of unfair subcontracting practices from the current 1 billion KRW to 2 billion KRW.

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