Unreasonable Sanctions?... Last Year Fair Trade Commission's Complete Victory Rate Hits All-Time High

FTC Announces 2024 Litigation Trends
120.2 Billion KRW Refunded Due to Lawsuit Losses Over Five Years

Yonhap News

In administrative lawsuits with final court rulings last year, the Fair Trade Commission (FTC) achieved a record-high winning rate since the related statistics began to be compiled.

The amount of fines imposed for unfair practices such as abuse of power but returned to companies due to lawsuit losses totaled 120.2 billion KRW over the past five years.

According to the '2024 Litigation Trends' data released by the FTC on the 6th, out of 2.3876 trillion KRW in fines with confirmed court rulings from 2020 to last year, the legality of the disposition was upheld for 2.2674 trillion KRW (95%).

The total refund amount returned to companies due to administrative lawsuit losses over the past five years was approximately 120.2 billion KRW. This amount did not include additional interest payments added when refunding the fines. The interest is calculated based on the average interest rate of regular deposits at commercial banks for the period from the date the company paid the fine to the date of refund.

During this period, out of 441 lawsuits, the FTC won 401 cases (including partial wins), recording a winning rate of 90.9% based on the number of cases. The number of losses was 40 cases (loss rate 9.1%).

Looking at last year alone, out of 91 cases with final court rulings, the FTC won 83 cases (including partial wins), achieving a winning rate (including partial wins) of 91.2%.

The FTC’s full victory rate was 82.4%, up 10.6 percentage points from 71.8% the previous year. This is the highest full victory rate since the related statistics began in 2001. The number of losses was 8 cases (8.8%), and the refund amount returned to companies due to losses was about 8.1 billion KRW.

By sector, in the cartel field, the FTC achieved full victories in 40 out of 42 lawsuits last year and partial victory in 1 case. In the unfair trade field, out of 9 lawsuits, the FTC won 6 fully and 2 partially, while in the subcontracting field, out of 16 lawsuits, the FTC won 12 fully and 2 partially.

In the unfair support field, the FTC fully won 5 out of 8 lawsuits and partially won 3 cases. In other lawsuit fields including constitutional complaints, the FTC won 12 out of 16 lawsuits.

The case with the largest fine amount among the FTC’s confirmed victories last year was the bid-rigging case involving 11 contractors related to a steel rebar contract ordered by the Public Procurement Service. Eleven steel companies including Hyundai Steel were found to have colluded on bid quantities and prices in rebar bids worth about 1 trillion KRW annually ordered by the Public Procurement Service over several years. In November 2022, they received corrective orders and fines totaling 256.5 billion KRW.

Following this, seven companies including Hyundai Steel, Dongkuk Steel, and Daehan Steel filed lawsuits disputing the disposition, and court battles began in March 2023. However, the FTC won fully in the second trial as well. The Supreme Court ruling in December last year confirmed the FTC’s full victory.

Additionally, the FTC achieved complete victories in the unfair support case of Changshin INC (fine of 34.7 billion KRW) and the unfair subcontracting trade cases of LSMtron and Cooper Standard Industrial (fine of 1.3 billion KRW).

Since July last year, the FTC has been releasing analysis results of court rulings twice a year. This follows some criticisms that the FTC’s investigations, sanctions, and fine impositions were excessive after consecutive losses in major cases such as the SK Group’s private interest infringement allegations and the SPC Group affiliate unfair support sanctions.

An FTC official stated, "Since losses in some cases could undermine the overall credibility of the FTC’s dispositions, we plan to strictly respond to violations of the law while reducing losses through more precise and accurate analysis during investigations and deliberations going forward."

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