South Korea Scraps Reward Cap for Reporting Collusion, Boosts Whistleblower Incentives

The Fair Trade Commission (FTC) in South Korea is set to abolish the existing reward cap for whistleblowers reporting unfair trade practices, such as bid-rigging and cartels. Currently, the maximum reward is capped at 3 billion won (approximately $2.2 million USD), but this limit will be removed entirely. This significant policy shift, announced on May 21st, aims to incentivize individuals to come forward with crucial information, particularly regarding clandestine cartel activities that are difficult to detect.

The FTC will also standardize the reward calculation to a maximum of 10% of the total fine imposed. Previously, the calculation was complex, involving tiered percentages based on the fine amount and the quality of evidence, making it difficult for whistleblowers to predict their potential earnings. Under the new system, a whistleblower could receive up to 10 billion won (approximately $7.3 million USD) if a 100 billion won fine is levied, a substantial increase from the previous maximum of 2.85 billion won in such a scenario.

This initiative aligns with President Lee Jae-myung's strong emphasis on combating unfair trade practices. He previously urged the FTC to offer substantial rewards, suggesting that whistleblowers should feel like they've 'hit the lottery' by reporting cartels, even if it meant paying out tens of billions of won. The commission is also expanding the scope of evidence considered for unfair support and self-dealing practices, including information related to the intent behind such actions, not just transaction details. This comprehensive approach signals a robust effort by the South Korean government to foster a fairer and more transparent market environment by empowering those who expose corporate misconduct.

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If you report collusion, give them a reward that will change their fortune. Make them think, 'I'd rather dig for collusion than play the lottery.'