Chairperson Joo Byunggi: "Coupang's Kim Beomseok Designated as Owner Due to 'False Pledge'... Prosecution and Criminal Sanctions Inevitable"

Chairman Kim Beom-seok's Designation as De Facto Owner Stressed as Legitimate Procedure
New Penalty Introduced: Up to 20 Billion Won Fine Directly on Owner
New Bureau-Level "Special Investigation Planning Team" Targeting Platform Monopolies

Joo Byung-gi, Chairperson of the Fair Trade Commission, stated that the change of Coupang's de facto owner (Dongil-in) to Chairman Kim Beom-seok of Inc was conducted in accordance with legal procedures, and announced that criminal sanctions will be imposed in the future. In addition, to eradicate the practice of submitting false designation materials, the Fair Trade Commission will introduce a new economic penalty imposing a fine of up to 20 billion won directly on the owner. The commission also introduced a series of strong regulatory measures, including the launch of a "Special Investigation Planning Team" to act as a watchdog against monopoly abuses by large platforms and the implementation of a "corporate split order."

"Kim Beom-seok's claim of 'no family management' found to be false... Future prosecution and criminal sanctions"

Joo Byungki, Chairman of the Korea Fair Trade Commission, speaking at the press corps meeting commemorating the 1st anniversary of the inauguration of the People’s Sovereignty Government. Fair Trade Commission.

At a press corps meeting marking the first anniversary of the launch of the government, held at the Sejong Government Complex on the 26th, Chairperson Joo announced these key future policy initiatives. Regarding the controversy over Chairman Kim's designation as the de facto owner, Joo stated, "We will, of course, comply with the court's injunction procedures, but since the pledge that no family members would participate in management was violated, our position is firm that the designation was made through legitimate procedures. If falsehoods are proven, prosecution and criminal sanctions will inevitably follow."

Previously, the Fair Trade Commission determined that Chairman Kim's younger sibling was in fact participating in Coupang's management, thus disqualifying the company from an exemption and, for the first time in five years, changed the de facto owner from a corporation to the individual Chairman Kim. In response, Coupang filed a lawsuit to nullify the decision, and the court has currently placed a temporary suspension on the measure.

Under current law, submitting false designation materials as a public disclosure conglomerate is subject to a fine of up to 15 million won or imprisonment for up to two years. Chairperson Joo said, "A fine alone is not a sufficient deterrent against violations," and added, "We will push for legal amendments so that, if false submissions are detected in the future, a flat fine of up to 20 billion won can be imposed directly on the owner." He further stated, "As in the case of Youngone Corporation, we will also establish a legal basis to scrutinize private interest appropriation and unfair support in companies that intentionally omit affiliates to evade regulation."

'Blocking tricks by Coupang and Baemin... Launching a 'task force' to crack down on complex cartels"

The Fair Trade Commission will further expand its personnel and organizational structure by adding 237 staff members, following an increase of 167 in the first quarter of this year. In particular, to curb the increasingly sophisticated monopoly abuses by big tech platforms, a new "Special Investigation Planning Team" comprising 40 members at the bureau level will be established. This is due to the judgment that, so far, splitting cases among multiple divisions has made efficient response difficult.

Chairperson Joo explained, "Existing organizations cannot effectively respond to complex unfair practices related to platforms. The Special Investigation Planning Team will function as an 'agile task force' that tackles complicated issues head-on, and as a specialized unit to address structural problems such as unfair transfers of wealth and management succession by second to fourth generation owners in large business groups." Addressing concerns that the team may resemble the "watchdog of the business world" that the former Investigation Bureau was called, he clarified, "This is not a regulation tailored to suit the current administration, but an organization dedicated to improving the lives of the people," adding, "We will focus on investigations that align with public expectations and interests."

To regulate algorithm and data monopolies, the Fair Trade Commission will also elevate the economic analysis function from the division level to a new "Bureau of Economic Analysis" with 37 staff members. Additionally, 30% of the increased personnel (70 staff) will be assigned to regional offices to closely monitor unfair practices targeting local small business owners.

Statute of limitations for collusion extended to 15 years... Announcement of 'corporate split order' legislation in the second half

To uncover large-scale collusion that has been concealed for long periods, the statute of limitations for administrative action will be significantly extended. Chairperson Joo stated, "Currently, collusion is subject to a basic limitation of seven years, with an additional five years for certain cases, making a maximum of 12 years. We will push to amend the law to extend the basic limitation to 10 years, allowing up to 15 years in total." Combined with the increase in the standard rate for fines (from a maximum of 20% to 30%), business risks are expected to rise further.

Furthermore, to address situations where fines alone are insufficient to remedy unfair monopoly practices, the commission declared its plan to legislate "structural measures (corporate split orders)" during the second half of this year, which would allow forced breakups of companies. Chairperson Joo emphasized, "For industries such as power grids, networks, and platforms, simply having the structural measure option in place will act as a powerful deterrent against legal violations."

Finally, Chairperson Joo stated, "We will expedite the review of the starch sugar and government bond collusion cases within the third quarter of this year, and also swiftly determine whether to initiate consent decree proceedings for delivery app cases, such as Coupang Eats' request for most-favored-nation treatment."

This content was produced with the assistance of AI translation services.