Unjustified Price Setting and Maintenance Explicitly Brought Under Rules... KFTC Overhauls Rules for Monopolistic Businesses for First Time in 25 Years

Significantly strengthening enforcement against unjustified price abuse
Explicitly codifying penalties for "consumer exploitation," previously left in a legislative vacuum

The Korea Fair Trade Commission (KFTC) is comprehensively revising, for the first time in 25 years, the Enforcement Decree provisions related to the abuse of market dominance under the Fair Trade Act. The aim is to remove an outdated regulatory framework designed for the traditional manufacturing sector and prevent market-dominant companies from using pricing tricks to raise prices, engaging in new forms of platform abuse, and exploiting consumers in changing market conditions, including the digital transformation.

The KFTC announced on November 6 that it would publish a legislative notice on amendments to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (the Fair Trade Act), with the comment period running from November 6 through December 16. The amendments will create and refine three categories of conduct—price abuse, obstruction of business activities, and harm to consumer interests—with the aim of significantly strengthening the KFTC’s ability to address monopolistic businesses.

The most notable change is a substantial strengthening of the standards for penalizing price abuse by monopolistic businesses. The current Enforcement Decree addresses only unjustified price changes, limiting the ability to prevent companies from raising product prices immediately when costs rise while keeping them at those elevated levels when costs fall, thereby making excessive profits. The KFTC will broaden the scope of the rules so that unjustified price setting or maintenance can also be penalized as abuse. It will also revise the assessment criteria to compare prices not only with supply costs but also with prevailing market prices. In addition, it will lower the standard from “substantiality” to “reasonableness,” significantly improving the effectiveness of law enforcement in response to criticism that the requirement was virtually unenforceable because it was excessively difficult to prove.

The rules on obstruction of business activities are also being reshaped to fit the modern economy, leaving behind their outdated framework. The narrow provision, which had been based on manufacturing and covered only interference with the purchase of raw materials, will be expanded to cover obstruction of the purchase, access, use, or movement of tangible or intangible goods or services, making it applicable across all industries. The measure is aimed squarely at the emerging digital economy, where intangible assets such as data and technology are central to competition. The amendments will also expressly prohibit anticompetitive tying, a new category not covered by the current Enforcement Decree. They will strictly prohibit the improper use in competition of nonpublic information obtained during business dealings, as well as interference with direct transactions between businesses and consumers that bypass the business operator. Provisions in the KFTC’s public notice that have been frequently enforced—including refusal to deal, the imposition of unjustified conditions, and discrimination in prices or terms of trade—will be elevated to the Enforcement Decree to make the rules more predictable for those subject to them.

Protections against consumer exploitation, which had been left unaddressed by a gap in the law, will also be strengthened. A new provision on conduct that harms consumer interests will explicitly make it subject to sanctions when monopolistic businesses impose unjustified terms of trade on consumers, noticeably reduce the quality of goods or services, or unfairly restrict consumer choice and impose disadvantages.

The KFTC plans to gather comments from stakeholders and relevant government agencies during the legislative notice period, then complete the remaining procedures, including review by the Ministry of Government Legislation, and finalize the amendments to the Enforcement Decree in the first half of 2027.

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