South Korea Moves to Toughen Penalties for Repeat Corporate Collusion

South Korea’s government and ruling Democratic Party agreed Monday to pursue tougher sanctions against companies that repeatedly engage in collusion, including the possible suspension of operations or cancellation of business registrations.

The proposed enforcement system would apply to companies found guilty of price fixing or bid rigging in 17 industrial sectors. The sectors include safety, energy and transportation, according to Min Byoung-dug, deputy chair of the Democratic Party’s policy committee.

Min announced the agreement after a policy consultation between the party and the government. He said implementation would require amendments to the Fair Trade Act as well as 17 laws governing individual sectors. The scope of the plan indicates that the government is seeking to connect antitrust enforcement with the licenses and operating permissions that companies need to remain in business.

The government and ruling party also plan to extend the statute of limitations for sanctions involving collusive practices. In another enforcement measure, they intend to connect information on large public tenders commissioned by education offices to the Fair Trade Commission’s Bid-Rigging Indicator Analysis System. That linkage is intended to give authorities more information for identifying suspicious bidding patterns in public procurement.

Officials also said they would strictly enforce previously revised laws that permit punitive fines for repeated collusion. The package therefore combines stronger financial consequences with the prospect of direct restrictions on a company’s ability to operate.

Fair Trade Commission Chair Ju Biung-ghi described collusion as a serious unfair practice that damages the foundation of the market economy. He said it allows companies to seek unjust profits at the expense of consumers and other participants in the economy.

Democratic Party policy committee chair Kwon Chil-seung said the market should receive a clear warning that the cost of collusion will far exceed any gains companies expect from the conduct.

The initiative remains a legislative plan rather than an enacted policy. Its practical effect will depend on the wording of the Fair Trade Act revisions and the 17 sector-specific amendments, as well as their passage through the National Assembly. The proposed changes nevertheless signal an effort by the government and governing party to escalate the consequences for repeat offenders beyond conventional antitrust fines.