Whistleblowers who report unfair trade practices such as collusion will be eligible to receive up to 10% of the imposed fines as a reward, with no upper limit. Given the recent frequency of multi-hundred-billion-won fines, rewards reaching tens of billions of won could emerge.
The Fair Trade Commission (FTC) announced on the 21st that it has prepared an amendment to the "Regulations on Reward Payments to Reporters of Violations of the Fair Trade Act," with administrative notice running through the 10th of next month.
The core of the amendment is the abolition of the reward payment ceiling. Previously, reward caps were set by type of violation: 3 billion won for collusion, 2 billion won for unfair support and private benefit-taking, and 500 million won for violations of the Subcontracting, Franchise, and Agency laws. An FTC official explained, "The compensation was not sufficient relative to the risks whistleblowers had to bear, which made them hesitant to report large-scale cases."
President Lee Jae-myung also instructed at a Cabinet meeting on the 20th that legislation on the reward system be pursued to encourage reporting of misconduct such as stock price manipulation and collusion, saying, "If reporting a large organization can yield rewards big enough to change one's life, the deterrent and preventive effects on crime will be significant."
Once the amendment takes effect, reward ceilings for all types of violations will disappear. Accordingly, the larger the fine, the greater the potential reward. The reward calculation method will also be simplified. Previously, rates ranging from 1% to 10% were applied by fine bracket, with reward rates further adjusted based on the level of evidence. Going forward, 10% of the total fine will serve as the baseline, with the final reward determined by the reporter's contribution and the level of evidence.
For example, if a whistleblower reports a collusion case with the highest level of evidence resulting in a 100 billion won fine, the maximum reward under the previous system was 2.85 billion won, but under the amendment it will rise to as much as 10 billion won.
Rewards for reporting private benefit-taking and unfair support will also be strengthened. Previously, only transaction records and trade-condition-related materials were recognized as key evidence, but going forward, internal information needed to prove illegality—such as intent to support the controlling family—will also be included in the reward assessment.
Incentives for reporting technology misappropriation will likewise be expanded. The FTC plans to establish grounds to raise reward rates for activities such as those of "technology protection monitors," who collect and report information on technology theft at subcontracting sites. However, to prevent abuse of the system, rewards may be reduced by up to 30% depending on the reporter's level of cooperation with the investigation and degree of involvement in the violation.
The timing of reward payments will also be partially adjusted. Previously, rewards were paid within three months of the FTC's resolution, but going forward, a base reward will be paid after the fine is actually deposited into the national treasury, with the remaining reward paid after objection procedures such as administrative litigation are concluded.
An FTC official said, "This will encourage active reporting of large-scale violations and send a signal to companies that illegal conduct will inevitably be uncovered," adding, "We plan to finalize and implement the amendment within the first half of the year."
