FKCCI: "Increase Opportunities for Corporate Defense During Fair Trade Commission Investigations"

Submission of Opinion on Administrative Notice Regarding Case Handling to the Fair Trade Commission

The government received requests for supplementation regarding the 'Subordinate Regulations for Revising and Establishing Procedures and Standards for Fair Trade Commission (FTC) Case Handling,' which was administratively announced last month. The requests include easing related standards to expand opportunities for corporate defense and establishing provisions to limit excessive on-site investigations by the Fair Trade Commission.

The Federation of Korean Industries (FKI) announced on the 6th that it submitted an opinion letter containing these points to the FTC.

The FKI explained that the monetary and number of respondents criteria set too high in the administrative notice of the case procedure rules result in insufficient opportunities for companies to express their opinions during the review process. They also argued that to achieve the amendment's purpose of expanding corporate defense opportunities as stated by the FTC, the related standards should be lowered to about half.

Article 37 of the administrative notice stipulates that cases with a maximum expected fine amount of 100 billion KRW or more, or with five respondents as business operators, must undergo FTC review at least twice. However, looking at the fine imposition status for abuse of market dominance cases over the past five years, there were only one case each in 2017 and 2021 where the total fine amount exceeded 100 billion KRW.

The FKI also proposed that to improve the practice of revising FTC investigation official letters, provisions should be established requiring FTC deliberation when issuing and revising official letters. They further argued that the 'specific illegal acts' in the investigation official letters should be specified, and the investigation target 'address' should be limited.

Article 10 of the administrative notice on investigation procedures requires specifying the investigation period range, transaction fields, or types of acts in the investigation official letters. The FKI explained that in such cases, on-site FTC investigations could become excessively broad and invasive, comparable to criminal case searches and seizures, merely by revising the official letters.

On-site, voices have emerged calling for improvement of the FTC’s practice of prioritizing investigations of corporate compliance departments, which infringes on corporate defense rights. Article 11 of the administrative notice on investigation procedures principally prohibits investigations of compliance departments, which had been highly requested by companies, but includes exceptional cases where investigations are allowed.

The FKI viewed that the related standards are unclear and broad, which could lead to abuse of investigation authority. Therefore, they argued that the exception should be narrowed only to cases where the compliance department of the investigated company is directly involved in illegal acts or evidence destruction.

The FKI also proposed that when the FTC distributes press releases on major cases, it should conduct consultations with respondents to protect trade secrets. Choo Kwang-ho, head of the FKI’s Economic and Industrial Headquarters, said, "The direction of this administrative notice is desirable," but added, "Some contents need to be adjusted realistically to enhance effectiveness."

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