Fair Trade Commission Initiates First Consent Procedure in Subcontracting Sector

[Asia Economy Reporter Eunju Lee] The Fair Trade Commission (FTC) has decided to initiate the consent decree procedure related to Eugene General Construction's unfair subcontracting transaction practices. This decision marks the first case in which the FTC has accepted an application to initiate the consent decree procedure since introducing the system in the subcontracting sector.

On the 21st, the FTC announced through a subcommittee review that it had decided to commence the consent decree procedure requested by Eugene General Construction. The consent decree system is a mechanism that allows for the swift resolution of cases without confirming legal violations if the corrective measures proposed by the business operator are deemed reasonable. The FTC decided to initiate the consent decree procedure, recognizing that the corrective measures proposed by Eugene General Construction could promptly remedy the damages suffered by subcontractors.

On October 13, Eugene General Construction applied to initiate the consent decree procedure regarding the unfair subcontracting transaction practices under investigation by the FTC. The FTC has been investigating the case, finding that Eugene General Construction violated the Subcontracting Act by failing to pay additional construction fees during the process of entrusting facility construction to subcontractors in March 2019. Eugene General Construction proposed corrective measures including additional payment of subcontracting fees, civil compensation, and completion of Subcontracting Act education.

This decision is the first case of initiating the consent decree procedure since the FTC introduced the consent decree system into the Subcontracting Act in July this year to resolve principal-subcontractor issues. The FTC stated, "Through the consent decree system, even civil damages suffered by subcontractors due to unfair special agreements that cannot be subject to payment orders under the Subcontracting Act can be promptly restored, and the activation of the consent decree system is expected in the future."

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