Executives Out for Collusion, Companies Expelled for Repeat Offenses... KFTC to Eradicate Collusion with Strong Measures

Introduction of Executive Dismissal Orders for Collusion

Repeated Collusion May Lead to Registration or License Revocation for Companies

Going forward, executives at companies that lead or participate in collusion will be dismissed, and companies that repeatedly engage in collusion may have their registrations or licenses revoked. The introduction of "structural measures," such as forcing businesses to be sold to third parties, is also being pursued.

Koo Yoon-chul, Deputy Prime Minister for the Economy and Minister of Strategy and Finance, is presiding over the Ministerial Task Force for Special Management of Living Expenses Prices. Ministry of Strategy and Finance.

On April 23, the Korea Fair Trade Commission announced these measures in its "Measures to Eradicate Repeated Collusion" at the Special Task Force on Managing Living Costs. This is a powerful step aimed at putting an end to chronic collusion among major operators, even in the face of fines. The focus is on "personnel and structural expulsion," which isolates the executives and companies leading collusion from the market, in addition to strengthening economic sanctions.

According to the plan, the government is considering introducing an executive dismissal order system, which would require the dismissal or suspension of executives involved in collusion. This measure is being considered because collusion often recurs when personnel networks among executives or companies remain intact. Restrictions on rehiring in the same industry after dismissal may also be implemented. Similar systems are already in place in the United States, the United Kingdom, and Australia. Domestically, in April of last year, the Financial Services Commission implemented a system restricting the appointment and reappointment of executives at listed or financial companies for those who violated the Capital Markets Act through unfair trading or illegal short selling.

Corporate penalties will also be raised to the "market exit" level. The Korea Fair Trade Commission will establish a legal basis allowing it to directly request the cancellation of business registration or suspension of operations for companies that repeatedly engage in collusion. The plan is to expand the application of such measures—already in effect for construction companies under the Framework Act on the Construction Industry, which allows for the cancellation of registration in cases of repeated bid rigging—to other industries where collusion is frequent. A system will be introduced whereby relevant ministries can be asked to cancel registrations or suspend operations, and the ministries receiving such requests will implement the necessary actions.

If there are structural issues in a business that lead to repeated collusion, the introduction of "structural measures" to resolve these issues is also being considered. A Korea Fair Trade Commission official stated, "Possible measures may include forcing the sale of businesses involved in collusion to third parties, among others," adding, "Specific plans will be announced after review." The introduction of structural measures, executive dismissal orders, and market exit measures for colluding companies are all targeted for implementation in the second half of the year.

Joo Byungki, Chairperson of the Korea Fair Trade Commission, said, "We will maintain a high level of vigilance and do our utmost to monitor and correct market-disrupting and unfair trade practices that exploit external supply chain instability."

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