South Korea proposes cutting fine reductions for late cartel whistleblowers

The Fair Trade Commission (FTC) in South Korea is proposing changes to its leniency program for companies involved in cartels. Under the current system, companies that self-report and provide evidence of cartel activities can receive significant reductions in fines, even if they do so after an investigation has commenced.

However, the FTC is considering revising the enforcement decree of the Fair Trade Act to cap the maximum fine reduction at 75% for companies that self-report after an investigation has started. This proposed change aims to create a clearer distinction between the incentives offered to those who come forward voluntarily before an investigation begins and those who cooperate only after the authorities have initiated their inquiry.

Currently, the regulations allow for a full exemption from both fines and corrective actions for the first 신고자 (whistleblower) who submits evidence proving the cartel before the investigation starts. Even if the investigation has begun, a full fine exemption is possible if the FTC lacks sufficient information. The proposed amendment would maintain the current system for those who report before the investigation starts but reduce the maximum fine reduction to 75% for those who self-report afterward.

This adjustment is part of a broader review of the leniency program. The FTC previously announced measures to combat repeat offenders, stating that companies caught engaging in cartels again within 10 years of a previous violation would face a halving of their leniency benefits. The current rules only reduce benefits if a repeat offense occurs within five years.