"Antitrust enforcement has become so stringent that a single violation of the Fair Trade Act can now drive a company out of the market."
Sun Jung-ho, the attorney heading Lee & Ko's antitrust group, and Lee Soong-kyu, senior professional adviser, made the remarks in a recent interview with Seoul Economic Daily at the law firm's headquarters in Jung-gu, Seoul. "Sparing no expense in building a pre-emptive compliance system is the most efficient management strategy," they said.
The two experts assessed that the Korea Fair Trade Commission's (KFTC) enforcement stance has grown significantly tougher than in the past. A representative example is the strengthened standards for imposing fines in collusion cases. With the revision of related guidelines, the minimum fine has been raised by up to 20-fold, leaving the conventional approach of seeking mitigating factors after detection to reduce risk increasingly inadequate.
The KFTC's organizational restructuring is also cited as a factor adding to corporate burdens. The commission is pushing to revive its Investigation Bureau, once dubbed the "grim reaper for conglomerates." Plans under review would expand and elevate the current seven-member focused investigation team into an investigation bureau of 30 to 40 members. If revived, it would mark the bureau's return 21 years after its abolition in 2005.
"The reborn Investigation Bureau is likely to take a comprehensive approach, examining a specific company's violations across the board, rather than dividing individual cases such as collusion, abuse of market dominance, and subcontracting among different departments," Lee said. "Not only conglomerates but also small and mid-sized enterprises are increasingly likely to come under investigation."
The direction of investigations is also changing. "The key keyword in recent fair trade enforcement is 'people's livelihoods,'" Sun said. "The KFTC's attention is shifting to areas where consumers can directly feel price changes, such as sugar and flour."
Lee & Ko advised that companies must move beyond formal training or "showcase" compliance programs and equip themselves with internal control systems that actually function. "One-off inspections are no longer sufficient for compliance," Sun stressed. "Compliance standards must be linked to employee performance evaluations (KPIs) and disciplinary structures for the organization to actually move."
The recently introduced attorney-client privilege (ACP) in Korea is also heightening the need for pre-emptive risk reviews. A path has been opened for content diagnosed and advised on through law firms in advance to receive legal protection. "The cost of weeding out risks in advance is far lower than the cost of responding after an incident breaks out," Lee said. "There is an urgent need for management to change its perception of viewing compliance investment merely as a cost."
The two experts also see fair trade risks growing in emerging industries such as mergers and acquisitions (M&A), artificial intelligence (AI), and platforms. "Going forward, new forms of unfair practices arising at the intersection of algorithms and platform technologies will become the hottest battleground in the antitrust field," Sun said.
