South Korea’s Fair Trade Commission (KFTC) is grappling with criticism as courts nullify punitive measures taken against companies under the previous Moon Jae-in administration. The backlash intensifies as industry officials reveal the KFTC’s losses in multiple lawsuits, raising questions about the fairness and legality of its actions.
Recent Court Rulings: Last Thursday, the Seoul High Court delivered a blow to the KFTC by nullifying a 3.4 billion won ($2.5 million) fine imposed on Taiwan’s Evergreen. The fine, alleging 15 years of collusion in fixing freight rates, was contested for undermining collaborative actions allowed under international law.
In the same vein, a combined 96.2 billion won in fines on 11 foreign shipping firms and 12 Korean companies faces scrutiny. The Ministry of Oceans and Fisheries challenges these penalties, arguing against the prohibition of collaborative actions permitted by international law.
Impact on Companies: Industry insiders express concerns over the KFTC’s sanctions tarnishing the brand images of Korean companies and inflicting substantial legal expenses. Korea Shipowners’ Association Vice Chairman Yang Chang-ho states that the court rulings have corrected the KFTC’s mistakes and justified the collaborative actions maintained for four decades.
Notable Cases: Further setbacks for the KFTC include the nullification of a 3.3 billion won fine on Coupang for discouraging supplier discounts on other online shopping platforms. SPC Group also succeeded in a lawsuit, reclaiming 64.7 billion won in fines imposed in 2020 for alleged illegal financial support.
On January 24, the court nullified a combined 1.6 billion won fine on SK Group Chairman Chey Tae-won and his company for allegations related to share acquisition hindering new business opportunities.
Source: Korea Times