FTC chief seeks 1% revenue fines for companies blocking probes

Ju Biung-ghi, chairman of South Korea’s Fair Trade Commission (FTC), said on Sunday that the agency plans to pursue fines of up to 1 percent of a company’s revenue for refusing to cooperate with investigations.

Appearing on a KBS program, Ju said the FTC could enforce the law effectively with its existing administrative investigative powers. Rather than imposing what he described as token penalties for obstructing investigations, he said, fines equivalent to around 1 percent of revenue would improve enforcement.

President Lee Jae-myung previously instructed officials at a Cabinet meeting last year to consider granting the FTC compulsory investigative powers to make economic sanctions more effective.

Ju, however, reiterated that he does not believe the agency needs compulsory investigative authority, pointing instead to stronger fines as an alternative.

Under the current Monopoly Regulation and Fair Trade Act, companies that refuse to cooperate with or obstruct FTC investigations face up to three years in prison or a fine of up to 200 million won. Ju said Korea’s competition laws need to be brought in line with international standards, noting that the Act on Fair Transactions in Large Retail business allows only administrative fines and provides no criminal penalties.

His comments highlighted the limited sanctions available when companies such as Coupang Inc. refuse on-site inspections by the FTC.

In the National Assembly, Representative Kim Nam-geun of the ruling Democratic Party has proposed an amendment to the Fair Trade Act that would allow fines of up to 1 percent of revenue. The bill has been referred to a subcommittee.