[2026 National Assembly Audit] "Investigating Brand-Use Fees Without Guidelines Is Human Experimentation on Businesses," Critics Say... Joo Byungkee: "We Will Prepare Standard Guidelines"

Controversy Over Ex Post Facto Regulation of "Brand-Use Fees"
FTC Acknowledges Lack of Rules and Pledges to Develop Guidelines

The Fair Trade Commission faced fierce criticism at the parliamentary audit for squeezing businesses with ex post facto regulations and unchecked investigative powers, without clear advance guidelines.

Fair Trade Commission Chairman Joo Byeong-gi answers lawmakers’ questions during a parliamentary audit at the National Assembly on the 12th. Yonhap News.

At the National Assembly's Political Affairs Committee audit on October 12, People Power Party lawmaker Song Eonseok put the regulation of brand-use fees charged by large business groups under scrutiny, taking aim at the Fair Trade Commission's arbitrary approach. Song criticized the commission for launching investigations without first providing any clear and appropriate guidelines on brand-use fees, and then making ex post facto judgments about whether the fees exceeded arm's-length prices. He described the commission's conduct as follows: "Launching an investigation before setting any standards is just like saying, as they did in the Joseon Dynasty, 'You know what crime you have committed.'" He added, "The policy authorities are intervening excessively in the affairs of citizens and businesses, the economic actors, as if they were conducting human experiments."

The Fair Trade Commission's authority to conduct on-site investigations, which falls outside the scope of judicial oversight by the courts, also came under heavy fire. Song said, "Searches and seizures by prosecutors or police are, in principle, subject to court oversight through warrants issued by judges. But even though Fair Trade Commission investigations are merely administrative, the commission can impose fines if a business fails to comply with an order to submit materials." He said that the only recourse was to go to court after the fact to seek a stay of enforcement, effectively making the commission a grim reaper for businesses.

Song also strongly condemned the commission's indiscriminate collection of materials. "Companies under investigation say that investigators also look into matters unrelated to the original case," he said. "In the past, they checked only text messages exchanged between employees of companies that had colluded. Now, they take entire mobile phones and investigate separate allegations, including unfair support."

In response, Fair Trade Commission Chair Joo Byung-kee acknowledged that there are currently no established rules on brand-use fees, saying, "It is a very important point that the commission should provide businesses with appropriate rules and guidelines." He added, "The commission is currently examining whether there was coercion or improper intervention in the process of raising trademark prices, and is also developing standard guidelines. I will provide a detailed update later." Addressing concerns about excessive on-site investigations, he explained, "Fair Trade Commission investigations are intended to obtain only the minimum information necessary." He also pledged, "The point that we need to increase the predictability of law enforcement is a very important principle, and we will do our best to achieve that."

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