The Fair Trade Commission (FTC) of South Korea has announced plans to substantially increase the minimum fines imposed on companies found guilty of violating fair trade laws, particularly concerning collusion and personal gain from unfair advantages. The new measures will see severe collusion fines increased to a minimum of 18% of the related revenue, nearing the legal cap of 20%. Furthermore, the fines for unfair support and personal gain will increase from 20% to 100% of the total support amount, making the penalties more reflective of the financial benefits obtained through these violations. The FTC explains that the previous fines were inadequate in preventing habitual violations by firms.

The announcement follows a critique from President Lee Jae-myung earlier in the year, who stated that existing fines often resulted in minimal actual penalties being enforced, diminishing their deterrent effect. The FTC aims to address these concerns by ensuring that the fines imposed not only reclaim the illicit gains obtained from these illegal practices but also serve as a strong deterrent to prevent such behaviors in the future. Chairperson Jo Byeong-gi also highlighted issues with the previous fine consistency during recent parliamentary discussions, further pointing to the need for more stringent enforcement measures.

Under the newly proposed guidelines, the minimum fines for collusion will increase from 0.5% to 10%, while the upper limits will also rise, reflecting the severity of the violations. Significant collusion violations will have a revised range of fines increased from a maximum of 10.5% to 20%, with even the least severe infractions facing enhanced penalties. This overhaul is part of a broader strategy by the FTC to strengthen market integrity and ensure that firms adhere to fair competition practices in South Korea, indicating a significant shift in regulatory approach to business conduct.