FKCCI "79% of Corporate Punishments under the Fair Trade Commission's Jurisdiction Need Improvement"

"'82% of Cases Violate the Constitutional Principle of Prohibition of Excessiveness'
FKCCI: 'Criminal Punishments Are Excessive and Frequent'"

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] The Korea Fair Trade Commission (KFTC) imposed a fine of 300 million KRW for failure to submit materials and obstruction of on-site access during the administrative investigation of Apple Korea, and reported one Apple corporate officer to the prosecution. The KFTC emphasized that in the 2017 investigation, an Apple executive A delayed the investigator's on-site access for about 30 minutes together with security personnel. The issue was that the prosecution judged that the KFTC did not properly follow procedures such as presenting official identification and notifying the execution of official duties at the start of the investigation. Even if the KFTC had followed the related procedures, it stated that the delay of less than an hour was not a level of legal violation requiring criminal punishment. For this reason, the Seoul Central District Prosecutors' Office dismissed charges against Apple Korea and former executive A.

The Federation of Korean Industries (FKI) analyzed 10 economic criminal penalty provisions under the jurisdiction of the KFTC and revealed that out of 274 corporate penalty items, 217 (79.2%) require improvement. They argued that the strong sanctions based on criminal law are excessive compared to similar laws, turning managers and companies into offenders, and thus need to be revised.

According to the 'Suggestions for Improvement of Economic Criminal Penalties under the KFTC' released by the FKI on the 16th, the most common reason for improvement was 'concerns over violation of the constitutional principle of prohibition of excess' with 178 cases (82%). This means the FKI acknowledges that there are many excessive regulations. The laws handled by the KFTC include the Act on Fair Transactions in Franchise Business, the Act on Fair Transactions in Large Retail Business, and the Monopoly Regulation and Fair Trade Act.

Among the items requiring improvement, 160 (73.7%) need to be converted to administrative sanctions. The abolition of criminal penalties accounted for 35 cases (16.1%), and mitigation of criminal penalties for 18 cases (8.3%) were also pointed out as issues. Reviewing the status of improvement plans by law, the Act on Door-to-Door Sales had the most cases requiring improvement with 86 (39.6%), followed by the Fair Trade Act with 43 cases (19.8%).

Most of the top laws requiring improvements need conversion to administrative sanctions. In particular, all cases under the Subcontracting Act, the Electronic Commerce Act, the Framework Act on Consumers, the Act on Labeling and Advertising, and the Act on Terms and Conditions were found to require conversion to administrative penalties.

Reviewing the reasons for improvement of the 217 items, 178 (82%) were found to violate the constitutional principle of prohibition of excess, accounting for the largest proportion. Among these, 173 items involved dual punishment provisions that penalize both the corporation and the individual actor.

Yoo Hwan-ik, head of the Industrial Headquarters at the FKI, said, "Excessive criminal punishment of managers undermines entrepreneurial spirit and may hinder new investments and job creation." He added, "The FKI will continue to propose improvements to economic criminal penalties to contribute to improving the business environment and national economic development."

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