On the 28th, the Democratic Party of Korea and the government decided to push for amendments to the law so that businesses that have repeatedly engaged in collusion can have their registrations canceled or their business suspended.
Min Byeong-deok, senior vice-chairman of the Democratic Party's Policy Committee, met with reporters after the party-government consultation on "eradicating repeat collusion" at the National Assembly and said, "We will introduce a registration cancellation and business suspension system for businesses that engage in repeated collusion in 17 industries."
According to the Fair Trade Commission, in the case of these 17 industries, measures are being taken to strengthen the level of sanctions so that if they repeatedly engage in collusion more than twice within 5 years, they can even be kicked out of the market.
To this end, the party and government plan to promote the revision of 17 individual laws that govern these industries and the Monopoly Regulation and Fair Trade Act (Fair Trade Act).
Registration cancellation and business suspension are newly introduced in four laws, including the Fire Protection Facilities Business Act, Electrical Construction Business Act, Electric Power Technology Management Act, and Spatial Information Management Act.
Business suspension regulations are added to 13 laws, including the Petroleum Business Act, Pharmaceutical Affairs Act, Passenger Business Act, Cargo Business Act, Metering Act, Environmental Technology Act, Environmental Testing and Inspection Act, Sewage Act, Waste Disposal Act, Elevator Management Act, Outdoor Advertising Act, Marine Waste Act, and High-Pressure Gas Safety Management Act.
In addition, to increase the detection rate of repeated collusion, it was decided to extend the statute of limitations on collusion from the current 12 years to a maximum of 15 years and establish a legal basis to link public bidding information on orders from education offices with large budgets to the Fair Trade Commission's Bid-Rixing Signs Analysis System (BRIAS).
Vice Chairman Min also explained, “To improve effectiveness, we decided to establish a legal basis for price re-determination orders and to pursue a plan to not grant corrective action reduction benefits to businesses that voluntarily report collusion.”
As a type of corrective action under the Fair Trade Act, we plan to specify 'an order to re-determine the price to the level that restores competition before collusion'.
Currently, the Fair Trade Commission is imposing price re-determination orders based on ‘other necessary corrective measures.’ However, this year, courts have repeatedly blocked the Fair Trade Commission's price re-determination orders issued to paper and milling companies. Legislation is being promoted to reduce the occurrence of such situations and ensure the effectiveness of sanctions.
The corrective action reduction benefits granted to self-reporting businesses will also be reformed. Accordingly, the Fair Trade Commission is expected to be able to issue active corrective measures, such as ordering price re-determination, to all participants in the collusion.
Representative Park Sang-hyuk, the ruling party secretary of the National Assembly's Political Affairs Committee, said, "After the National Assembly audit, there will be full-fledged discussions on the budget and legislation," and emphasized, "The eradication of collusion is an important issue that is directly related to the livelihood and welfare of consumers, so we will try to deal with it quickly."
We plan to strongly enforce punitive fines in response to repeated collusion based on already revised laws and regulations.
At the meeting that day, the party and government defined collusion as a "grave unfair act" and confirmed their intention to impose strong sanctions.
Joo Byeong-ki, chairman of the Fair Trade Commission, said, "I think that in the future, the imposition of fines that significantly exceed unfair profits will become a new standard." He added, "It will not happen that Korea weakly punishes or sanctions serious violations of the law by large companies as it did in the past."
Chairman Joo said, “Collusion is a gravely unfair act that undermines the foundation of the market economy and exploits consumers and other economic entities to seek unfair profits,” and promised, “We will continue efforts to eradicate collusion in areas closely related to the people’s lives.”
Kwon Chil-seung, policy committee chairman of the Democratic Party, said, "We must send a clear warning to the market that the costs of collusion are greater than the benefits," and added, "We must establish institutional mechanisms to ensure that habitual collusion operators who destroy market trust and bruise the national economy are kicked out of the market to eradicate rampant collusion in our economy."
