South Korea’s antitrust agency plans fines of up to 50% more for repeat disclosure violations

South Korea's Fair Trade Commission plans to increase administrative fines for large business groups that repeatedly violate disclosure requirements. The agency will publish the proposed revisions for public comment from Sept. 8 to Sept. 28.

Under the current rules, companies that violated disclosure obligations four to six times during the previous five years, including the inspection year, face a 10% increase. Companies with seven or more violations face a 20% increase. The proposed rules would impose increases of 10% after one repeat violation, 30% after two and 50% after three or more.

The commission said more than 50 companies repeatedly violated disclosure requirements at least twice between 2021 and 2025, suggesting that the current penalties have provided limited deterrence. The draft would also remove a 20% reduction for first-time violations or companies with no violations in the previous five years. It would eliminate reductions tied to filing delays, which currently range from 20% for delays of up to 30 days to 75% for delays of up to three days.

The proposal would additionally remove a cap limiting the basic fine for small companies to 1% of the larger of their paid-in capital or total equity. The commission said this would eliminate overlapping reductions because a company's financial condition is already considered when the final fine is determined.

The agency said the changes would encourage compliance, make conglomerate ownership and governance more transparent, strengthen market oversight and help curb undue economic concentration. It will review stakeholder comments before finalizing the revisions through a full commission deliberation and vote.

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We expect this to encourage companies to comply with disclosure obligations, ensure transparent disclosure of the ownership and governance structures of business groups, strengthen market oversight and effectively curb undue economic concentration.