Record-Breaking Cartels, Record-Breaking Fines... Fair Trade Commission Imposes 1 Trillion Won in Just Four Months

The total amount of fines imposed by the Fair Trade Commission this year has exceeded 1 trillion won in just four months. This is the result of a strong determination to investigate cartel cases and a significant acceleration in the handling process. As the minimum base rate for fines is also set to be significantly raised, corporate risks related to regulatory affairs are expected to increase further.

Chairman Byeonggi Joo of the Fair Trade Commission speaking at the inauguration ceremony of the 3rd 2030 Advisory Group held at the Fair Trade Commission's mediation center on the 28th. Photo by Yonhap News.

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According to a comprehensive review by the Fair Trade Commission as of April 29, which examined all publicly announced fines (including penalty surcharges) imposed from January of this year to the date of this report, a total of 1.068 trillion won was levied across 36 cases. This marks the third time the annual total has surpassed 1 trillion won, following 2017 (1.3308 trillion won) and 2021 (1.0083 trillion won). Last year’s total was approximately 354.7 billion won (provisional figure).

Although this year’s tally includes fines that are still provisional and may differ from the actual collected amounts, it is expected that historical records will be easily broken, considering the scale of major pending cases. The fines for the starch syrup and flour price-fixing cases, which may be finalized as early as next month, are each expected to approach up to 1 trillion won.

This “record-breaking pace” has been driven by investigations into “unfair collaborative acts,” which are essentially cartel cases. Of the total fines, 96.6% (1.0322 trillion won) were related to cartel cases. Last year, the proportion was 61.7%, and historically it has ranged from about 60% to 70%. This is due to the resolution of several large-scale cases, including the four major banks' loan-to-value (LTV) ratio collusion case (January, 272 billion won), the sugar price-fixing case (February, 408.3 billion won), and the paper products price-fixing case (April, 338.3 billion won).

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The background to these results lies in the Fair Trade Commission’s organizational “restructuring.” In response to repeated criticism over “delayed investigations” during past National Assembly audits, the Commission established the position of Investigation Management Officer in 2023 and systematically separated the functions of “investigation” and “policy.” This was a major shift from a 33-year-old system in which each sector had both policy and investigation departments, creating an environment where dedicated investigation units-such as the Cartel Investigation Bureau-can focus solely on processing cases. As a result, case-handling speed has dramatically increased. In February, Chairman Joo Byung-Ki announced that “the average duration for processing cartel cases last year was 281 days, more than 50% shorter than three years ago.”

Furthermore, the speed of the Commission has been enhanced by activating the “case-handling task force (TF)” system, which deploys multiple investigators simultaneously to large-scale or high-impact cases, and by actively utilizing the “simplified procedures” system, which involves written deliberations. An official from the Commission explained, “The reduction in processing time is not something that happened overnight, but the result of continuous efforts to improve the system.”

Although some have expressed concerns that faster processing may lead to poor investigations or a higher likelihood of losing administrative litigation, the Commission’s legal response capabilities remain robust. Over the past five years since 2020, the win rate for finalized lawsuits was 90.9% in terms of the number of cases and 95% measured by the amount of fines. While there have been occasional losses, such as in the recent Samsung Welstory lawsuit, the overall legitimacy of law enforcement continues to be recognized by the courts.

The Fair Trade Commission’s regulatory “blade” is expected to become even sharper. After increasing the number of staff by 167 this year, the Commission plans to add another 200 personnel next year, which would raise its workforce to 1,000 if the plan proceeds as intended. At the first cabinet meeting after taking office in June last year, President Lee Jaemyung repeatedly emphasized the need to reinforce the Commission’s staff, saying, “There are rumors that many issues are being neglected due to a shortage of personnel at the Fair Trade Commission.”

The level of sanctions will also be significantly strengthened. From April 30, the Fair Trade Commission will implement a revised notice that allows the minimum base rate for fines to be increased by up to 20 times depending on the degree of violation. In cartel cases, a minimum base rate of 10% will be applied upon detection. If a company has received even one order to pay fines for cartel conduct within the past 10 years, the fine may be doubled, meaning the burden on companies found in violation will increase even further.

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