The Fair Trade Commission (FTC) has announced a plan to abolish its "exclusive indictment power" — the monopoly authority to file criminal complaints against companies for unfair business practices — raising growing concerns about the potential abuse of complaints and litigation.
FTC Chairman Joo Byung-ki reported at a Cabinet meeting on the 31st that "we will prepare an improvement plan in the direction of fully abolishing the exclusive indictment power." The exclusive indictment system was introduced in 1980 so that prosecutors could only indict companies for unfair practices upon the FTC's complaint, aimed at preventing excessive complaints from chilling business activity.
The FTC's monopoly over indictment power has repeatedly faced calls for abolition depending on the political orientation of each administration, amid controversy over the concentration of authority and potential collusion between government and business. The main argument was that the FTC's monopoly led to delayed detection or punishment of corporate misconduct, and that complaint standards were applied arbitrarily. Proponents of abolition also argued that breaking the FTC's power monopoly would invigorate investigations into unfair practices and reduce harm to consumers.
However, the greater concern is the burden on companies from the abuse of complaints and litigation. It is telling that Justice Minister Jeong Seong-ho himself said, "If the right to file complaints is granted to a certain number or more of citizens, there could be problems of complaint abuse." Minister of Trade, Industry and Energy Kim Jeong-gwan also stated, "Cases could arise where competitors use the system to file complaints against rival companies," adding that "careful review is needed during the system design process to ensure that additional burdens are not placed on businesses."
The abolition of the exclusive indictment power must be examined alongside its negative consequences. If competing businesses, subcontractors, or labor unions begin filing criminal complaints and accusations, a deluge of litigation could ensue, and companies could suffer undeserved harm. For businesses, the mere fact of being accused of unfair practices can inflict significant economic damage through reputational harm alone. Small and mid-sized enterprises, which have weaker legal defense capabilities than large corporations, would be especially vulnerable.
The FTC plans to impose restrictions such as requiring a minimum number of citizens or businesses to file a complaint in order to prevent frivolous accusations. Yet rather than pushing ahead with abolition, the proper course is to first conduct thorough discussions on potential side effects. Considering the ripple effects across the broader economy, the government needs to establish measures to prevent the abuse of complaints and litigation, and carefully determine the timing of abolition and the scope of who should be granted the right to file complaints.