"Earned 100 Won, Paid Back 2"...Gyeongsilryeon: "580 Trillion Won in Unjust Revenues Over 21 Years, Only 11 Trillion Won in Fines...Fair Trade Commission Must End 'Slap on the Wrist' Sanctions"

Government Sanctions Deemed Insufficient to Prevent Recurrence
Calls Grow for Expanding Class Action System to Provide Consumer Relief

The Economic Justice Practice Citizens' Coalition (Gyeongsilryeon) has released an analysis showing that while companies amassed 580 trillion won in revenue over approximately 21 years through illegal activities such as collusion and unjust support, the fines imposed by the Korea Fair Trade Commission amounted to less than 2% of the related sales. The coalition also pointed out the need to increase the effectiveness of administrative sanctions, and urged the enactment of a comprehensive consumer class action system across all sectors so that consumers can receive collective compensation for small but widespread damages.

Full Survey of 4,800 Cases Over 21 Years...Imposition Rate Less Than 2% of Related Sales

The "Coalition for the Enactment of the Collective Litigation Act for Consumer Protection," consisting of 19 consumer and civic groups, held a press conference in front of the National Assembly main gate on September 1, demanding the passage of the Collective Litigation Act. Economic Justice Practice Citizens' Union.

On September 16, Gyeongsilryeon held a press conference at its auditorium in Dongsung-dong, Jongno-gu, Seoul, titled “Analysis of Fair Trade Commission Penalty Impositions and the Need for Systemic Reform,” and released the full survey results of fines imposed by the commission on 4,822 companies over 1,856 cases from 2005 through July 2026. Over the past 21 years, the total amount of related sales in these commission cases reached 580.2548 trillion won, while the total fines imposed amounted to 11.2451 trillion won. The average imposition rate (calculated as fines divided by related sales) was just 1.94%. In other words, for every 100 won in revenue generated from egregious conduct, the commission imposed less than 2 won in fines. Gyeongsilryeon explained, “The investigation aimed to reveal the toothlessness of the government’s administrative sanctions.”

Looking at the annual trend of imposition rates: in 2006 it was 1.13%, dropping to 0.97% in 2011, rising to 1.72% in 2016, and 2.77% in 2021. By July of this year, it had reached a gradual increase to 3.50%. Over the last 21 years, the top 10 companies by related sales posted a combined 171.422 trillion won—29.54% of the total. However, fines imposed on these companies totaled 2.0524 trillion won—just 18.25% of the total amount—and the imposition rate was 1.20%, below the overall average. Across 15 cases involving three SK Group affiliates (SK, SK Innovation, and SK Telecom), the average imposition rate was only 0.47%.

On a cumulative fines basis, the top 10 companies paid 2.7647 trillion won, accounting for 24.59% of the total. The average imposition rate—relative to their 126.7499 trillion won in related sales—was 2.18%. Qualcomm Korea and Qualcomm, which were each sanctioned with fines of 602.5 billion won and 428.6 billion won, respectively, in 2017 for abuse of market dominance, paid over 1 trillion won in a single case; their imposition rates were both just 2.70%. Leading South Korean construction companies, such as Hyundai Engineering & Construction, Samsung C&T, and DL E&C (formerly Daelim Industrial), which have repeatedly been involved in bid-rigging on public tenders, each racked up cumulative fines in the hundreds of billions of won. Yet their fine-to-sales ratios hovered around just 1-3%.

Calls for Immediate Expansion of Class Action System to All Sectors...Fair Trade Commission Speeds Up Penalty Reform

Gyeongsilryeon stated, “The penalty system must be reformed so that the burden of sanctions exceeds the expected gains from illegal behavior,” adding, “Given that fines are paid into the national treasury, a class action law covering all sectors must be enacted without delay, to provide practical redress for consumer harm caused by unfair practices and to prevent such incidents.” A class action system allows a small subset of victims to bring a lawsuit and, if they win, all affected victims—including those not directly involved in the suit—receive compensation. Currently, such a system is only in place for securities cases. The Ministry of Justice is pursuing the introduction of a class action system for minor and widespread consumer damages as a major initiative for the latter half of the year, and numerous bills expanding class action eligibility to broader consumer damages are already before the National Assembly. Prime Minister Han Seongsook has also recently spoken publicly about institutionalizing the system. 

Meanwhile, the Fair Trade Commission is in the process of a comprehensive overhaul of the penalty system across seven laws, including the Fair Trade Act, focused on three major pillars: increasing penalties, expanding aggravated sanctions for repeat violators, and reducing the scope of cooperation-based mitigation. For cartel cases, the minimum fine will be raised to 10% of related sales (from the previous 0.5%), and the maximum will be expanded to 30% (from the previous 20%). At the same time, the maximum penalty multiplier for habitual violators will be increased to 100% (double the current rate), while the reduction for cooperation will be narrowed to 10% (down from 20%), thereby tightening sanctions. An official from the commission commented, “Statistics covering 20 years include many past cases where standards for penalties were relatively weak and do not necessarily reflect the current policy tone,” adding, “We will finalize the system reform in the second half of this year to strengthen deterrence against legal violations.”

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