CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to prevent the abuse of market dominance by business entities and excessive concentration of economic power and to promote fair and free competition by regulating illegal cartel conduct and unfair trade practices, thereby encouraging creative business activities, protecting consumers, and promoting the balanced development of the national economy.
The terms used in this Act are defined as follows:
| 1. | The term "business entity" means an entity that engages in manufacturing business, service business, or other business; in such cases, executive officers, employees (referring to persons continuously engaging in the business of the company, other than executive officers; hereinafter the same shall apply), agents, and other persons who act for the benefit of the business entity shall be deemed business entities for purposes of applying provisions concerning trade associations; |
| 2. | The term "trade association" means an association or a federation organized by two or more business entities for the purpose of promoting their common interests, regardless of its form; |
| 3. | The term "market-dominant business entity" means a business entity that is a supplier or consumer in a particular business area, in a market position to determine, maintain, or change the price, quantity, quality, or other terms and conditions of transactions of goods or services, either alone or together with other business entities; in such cases, when determining whether a business entity is a market-dominant business entity, its market share, the existence and degree of entry barriers, and the relative size of competitors, etc. shall be comprehensively taken into account; |
| 4. | The term "particular business area" means an area in which any competitive relationship exists or may exist, by the subject, stage, or geographical area of a transaction; |
| 5. | The term "practice substantially restricting competition" means a practice that results in circumstances affecting or likely to affect the determination of price, quantity, quality, or other terms and conditions of transactions, etc. freely to some extent according to the intent of a specific business entity or trade association, due to reduced competition in a particular business area; |
| 6. | The term "executive officer" means any of the following persons: |
| (b) | A chief executive officer (CEO); |
| (c) | A general partner who performs the business; |
| (e) | A person who corresponds to any person specified in items (a) through (d); |
| (f) | A commercial employee who is able to manage the overall business affairs of the main office or a branch office, including a manager; |
| 7. | The term "holding company" means a company whose main business is to control the business of a domestic company through ownership of shares (including equities; hereinafter the same shall apply), and whose total assets are at least the amount prescribed by Presidential Decree; in such cases, the criteria for the main business shall be prescribed by Presidential Decree; |
| 8. | The term "subsidiary" means a domestic company whose business is controlled by a holding company under the conditions prescribed by Presidential Decree; |
| 9. | The term "second-tier subsidiary" means a domestic company whose business is controlled by a subsidiary under the conditions prescribed by Presidential Decree; |
| 10. | The term "financial business or insurance business" means the financial and insurance business under the Korean Standard Industrial Classification publicly notified by the Commissioner of Statistics Korea pursuant to Article 22 (1) of the Statistical Act: Provided, That a general holding company under Article 18 (2) 5 shall not be construed as a company engaging in financial business or insurance business; |
| 11. | The term "business group" means a group of companies whose business is under the de facto control of the same person according to the criteria prescribed by Presidential Decree as classified below: |
| (a) | Where the same person is a company: A group of the same person and one or more companies controlled by the same person; |
| (b) | Where the same person is not a company: A group of two or more companies controlled by the same person; |
| 12. | The term "affiliate" means each member company of the same business group with two or more members, which is referred to as an affiliate of the other party; |
| 13. | The term "shareholding in an affiliate" means an act of a member company of a business group acquiring or owning shares of an affiliate; |
| 14. | The term "company having a shareholding in an affiliate" means an affiliate that acquires or owns shares of another affiliate through shareholding in that affiliate; |
| 15. | The term "issuing company" means an affiliate that has issued shares acquired or owned by a company having a shareholding in that affiliate; |
| 16. | The term "circular shareholding" means a relationship of shareholding in which affiliates are interconnected by establishing a chain of at least three shareholdings, all acting both as a company having a shareholding in an affiliate and as an issuing company; |
| 17. | The term "group of circular shareholding companies" means a group of affiliates in a circular shareholding relationship, among member companies of a business group; |
| 18. | The term "debt guarantee" means a guarantee provided by a member company of a business group to a domestic affiliate in connection with credits granted by any of the following domestic financial institutions: |
| (g) | Other financial institutions prescribed by Presidential Decree; |
| 19. | The term "credit" means any loan or any guarantee or assumption of corporate debts by domestic financial institutions; |
| 20. | The term "practice of resale price maintenance" means an act in a transaction of goods or services whereby a business entity forces another business entity which is the other party to the transaction, or any other business entity in each subsequent transaction stage, to sell goods or to provide services at a price determined by the first-mentioned business entity, or an act of making a transaction under other binding terms and conditions thereon to sell goods or to provide services at the determined price. |
| Article 3 (Application to Acts Conducted Overseas) |
This Act shall apply even to an act conducted overseas if such act affects the domestic market.
CHAPTER II PROHIBITION OF ABUSE OF MARKET-DOMINANT POSITION
| Article 4 (Remedies for Monopoly or Oligopoly in Market Structures) |
| (1) | The Fair Trade Commission shall establish and implement policies to promote competition in markets in which monopoly or oligopoly situations have continued over an extended period in relation to supply or demand of specific goods or services. |
| (2) | The Fair Trade Commission may present its opinions necessary for the introduction of competition or other measures to improve market structures, etc., to the heads of the relevant administrative agencies, where necessary to promote the policies under paragraph (1). In such cases, the heads of the relevant administrative agencies shall review the opinions of the Fair Trade Commission and send the result of such review to the Fair Trade Commission. |
| (3) | The Fair Trade Commission may perform the following affairs in order to promote the policies under paragraph (1): |
| 1. | Market structure surveys and publication of the survey findings; |
| 2. | Analysis of competitive situation in a specific industry, analysis of the current status of regulation, and establishment of measures to promote competition. |
| (4) | The Fair Trade Commission may request business entities and trade associations to submit materials necessary for performing the affairs specified in the subparagraphs of paragraph (3). |
| (5) | The Fair Trade Commission may entrust the affairs prescribed in paragraphs (3) and (4) to other agencies, as prescribed by Presidential Decree. |
| Article 5 (Prohibition of Abuse of Market-Dominant Position) |
| (1) | No market-dominant business entity shall engage in any of the following practices (hereinafter referred to as "abusive practices"): |
| 1. | Unfairly determining, maintaining, or changing the price of goods or the service fees (hereinafter referred to as "price"); |
| 2. | Unfairly controlling the sale of goods or the provision of services; |
| 3. | Unfairly interfering with the business activities of any other business entity; |
| 4. | Unfairly interfering with the market entry of a new competitor; |
| 5. | Making an unfair transaction to exclude a competitor or substantially undermining consumer interests. |
| (2) | The types of, and criteria for, abusive practices shall be prescribed by Presidential Decree. |
| Article 6 (Presumption of Market-Dominant Business Entities) |
A business entity in a particular business area whose market share amounts to any of the following (excluding a business entity with annual sales or purchases of less than eight billion won in a particular business area) shall be presumed to be a market-dominant business entity: <Amended on Feb. 6, 2024>
| 1. | A business entity's market share is at least 50/100; |
| 2. | The aggregate of the market shares of not more than three business entities is at least 75/100; in such cases, business entities whose market share is less than 10/100 shall be excluded. |
| Article 7 (Corrective Measures) |
| (1) | In the event of any abusive practice, the Fair Trade Commission may order the relevant market-dominant business entity to reduce the price, to suspend the relevant practice, to publish the fact that it has received a corrective order, or to take other necessary corrective measures. |
| (2) | Where a market-dominant business entity that is a company has committed an abusive practice and ceases to exist due to a merger, the Fair Trade Commission may order corrective measures under paragraph (1), by deeming that the abusive practice by the relevant company has been committed by a company surviving the merger or incorporated as a result of the merger. |
| (3) | Where a market-dominant business entity that is a company has committed an abusive practice and is divided or merged after division, the Fair Trade Commission may order corrective measures under paragraph (1), by deeming that such abusive practice committed prior to the date of division or merger after division has been committed by any of the following companies: |
| 1. | A company to be divided; |
| 2. | A new company established through the division or merger after division; |
| 3. | Another company that has merged with a part of a company to be divided and survives after such merger. |
| (4) | Where a market-dominant business entity that is a company has committed an abusive practice and establishes a new company pursuant to Article 215 of the Debtor Rehabilitation and Bankruptcy Act, the Fair Trade Commission may order corrective measures under paragraph (1) by deeming that the abusive practice has been committed by either an existing company or a new company. |
| Article 8 (Penalty Surcharges) |
Where a market-dominant business entity engages in an abusive practice, the Fair Trade Commission may impose on the business entity a penalty surcharge not exceeding 6/100 of the sales prescribed by Presidential Decree (or operating revenues in cases of a business entity prescribed by Presidential Decree; hereinafter the same shall apply): Provided, That the Fair Trade Commission may impose a penalty surcharge not exceeding two billion won in cases prescribed by Presidential Decree where no sales have been made or it is impracticable to calculate the sales (hereinafter referred to as "case of no sales, etc.").
CHAPTER III RESTRICTIONS ON BUSINESS COMBINATIONS
| Article 9 (Restrictions on Business Combinations) |
| (1) | No person shall perform any of the following practices (hereinafter referred to as "business combination") substantially restricting competition in a particular business area, either directly or through a person in a special relationship prescribed by Presidential Decree (hereinafter referred to as "related party"): Provided, That this shall not apply where a person, other than a company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales (hereinafter referred to as "large company"), performs an act prescribed in subparagraph 2: |
| 1. | Acquiring or owning shares of any other company; |
| 2. | Concurrently holding an executive position in another company by an executive officer or employee (hereinafter referred to as "concurrently holding an executive position"); |
| 3. | Merging with any other company; |
| 4. | Acquiring by transfer, leasing, or accepting by mandate all or substantial part of the business of another company, or acquiring by transfer all or substantial part of fixed operating assets of another company (hereinafter referred to as "acquisition by transfer of business"); |
| 5. | Participating in the establishment of a new company: Provided, That any of the following cases shall be excluded: |
| (a) | Where no person, other than related parties (excluding a person prescribed by Presidential Decree), participates in the establishment of a new company; |
| (2) | Paragraph (1) shall not apply to any business combination recognized by the Fair Trade Commission as falling under any of the following; in such cases, the relevant business entities shall assume the burden of proof as to whether they satisfy the conditions: |
| 1. | Where the effect of increasing efficiency that is impracticable to achieve by means other than the relevant business combination is greater than the negative effect of restricting competition; |
| 2. | Where the business combination is made with an inviable company, such as a company whose total capital on its balance sheet is less than its paid-in capital for a considerable period, and satisfies the conditions prescribed by Presidential Decree. |
| (3) | A business combination that meets any of the following requirements shall be presumed to substantially restrict competition in a particular business area: |
| 1. | Where the aggregate of the market shares (referring to the aggregate of the market shares of the affiliates; hereafter in this Article, the same shall apply) of companies involved in the business combination (referring to all companies participating in the establishment of a company in the case of paragraph (1) 5; hereinafter the same shall apply) meets the following requirements: |
| (a) | The aggregate of the market shares shall satisfy the presumptive requirements for market-dominant business entities; |
| (b) | The aggregate of the market shares shall be the largest in the relevant business area; |
| (c) | The aggregate of the market shares shall exceed the market share of a company with the second largest market share (referring to a company with the largest market share other than the companies involved in the business combination) by at least 25/100 of the aggregate of the market shares; |
| 2. | Where a business combination conducted either directly by a large company or through its related party meets the following requirements: |
| (b) | The business combination shall bring at least 5/100 of the market share. |
| (4) | The Fair Trade Commission shall determine and publicly notify the criteria for business combinations that substantially restrict competition in a particular business area under paragraph (1) and for business combinations to which paragraph (1) shall not apply pursuant to paragraph (2). |
| (5) | The total assets or sales under the proviso of paragraph (1) shall be the total assets or sales of a company which continues to maintain its status as an affiliate from before the date of business combination until after the date of business combination: Provided, That the total assets or sales of a company under any of the following subparagraphs shall be the amount excluding the total assets or sales of affiliates: <Amended on February 6, 2024> |
| 1. | Where an act falling under paragraph (1) 3 is performed between affiliates, a company classified as follows: |
| (a) | Where a company required to report its business combination under Article 11 (1) or its related party engages an act falling under paragraph (1) 3 with regard to the partner company under that paragraph: The partner company; |
| (b) | Where a company, other than a company required to report its business combination under Article 11 (1), which is of the size equivalent to the partner company, or its related party, engages in an act falling under paragraph (1) 3 with regard to a company required to report its business combination that paragraph: The company required to report its business combination; |
| 2. | A company that transfers its business (including lease of business, delegation of management, and transfer of fixed assets for business use) in the case of business acquisition. |
| Article 10 (Standards for Acquisition or Ownership of Shares) |
Acquisition or ownership of shares under this Act shall be based on the genuine ownership of the shares, regardless of the names on the register.
| Article 11 (Reporting on Business Combinations) |
| (1) | Where a company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales (referring only to large companies, in cases of a business combination conducted in the manner specified in subparagraph 3; hereafter in this Article referred to as "company required to report its business combination") or its related party conducts a business combination in any of the manners specified in subparagraphs 1 through 4 with another company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales (hereafter in this Article referred to as "partner company"); or a company required to report its business combination or its related party conducts a business combination in the manner specified in subparagraph 5 jointly with the partner company or its related party; and where a company whose scale is equivalent to the scale of the partner company, other than a company required to report its business combination, or its related party conducts a business combination in any of the manners specified in subparagraphs 1 through 4 with a company required to report its business combination; or a company whose scale is equivalent to the scale of the partner company, other than a company required to report its business combination, or its related party conducts a business combination in the manner specified in subparagraph 5 jointly with a company required to report its business combination or its related party; they shall report the combination to the Fair Trade Commission, as prescribed by Presidential Decree: <Amended on Feb. 6, 2024> |
| 1. | In cases where a company becomes to own at least 20/100 (or 15/100 for a stock-listed corporation under the Capital Markets and Financial Investment Business Act (hereinafter referred to as "listed corporation")) of the total number of shares issued by another company (excluding the number of non-voting shares under Articles 344-3 (1) and 369 (2) and (3) of the Commercial Act; hereafter in this Chapter, the same shall apply); |
| 2. | In cases where a person that owns at least the percentage specified in subparagraph 1 of shares issued by another company becomes the largest investor by acquiring additional shares of the company; |
| 3. | In case of concurrently serving as an executive: Provided, That the following cases shall be excluded: |
| (a) | Where he or she concurrently serves as an executive officer of an affiliate; |
| (b) | Where the number of executive officers who concurrently hold office is less than 1/3 of the total number of executive officers of the company for which the executive officer concurrently holds office, and he or she concurrently holds office of an executive officer who is not the representative director; |
| 4. | Where he or she commits an act falling under Article 9 (1) 3 or 4 (excluding the case of merger or acquisition by transfer of business between a parent company and a subsidiary under Article 342-2 of the Commercial Act); |
| 5. | In cases of participating in the establishment of a new company and becoming the largest investor in the company. |
| (2) | Where a company required to report its business combination or its related party conducts a business combination specified in paragraph (1) 1, 2, or 4 with another company that is not comparable with the partner company in terms of the total assets or sales (hereafter in this Article referred to as "small acquiree"); or where a company required to report its business combination or its related party conducts a business combination specified in paragraph (1) 5 jointly with a small acquiree or its related party; they shall report the combination to the Fair Trade Commission as prescribed by Presidential Decree only when all of the following requirements are met: |
| 1. | The total value paid or invested in consideration for a business combination (including payments or investments made by the relevant company through its related party) shall be at least the amount prescribed by Presidential Decree; |
| 2. | A small acquiree or its related party shall perform acts at a substantial level prescribed by Presidential Decree, such as selling or providing goods or services in the domestic market, or possessing or utilizing domestic research facilities or research personnel. |
| (3) | Notwithstanding paragraphs (1) and (2), no report is required in any of the following cases: <Amended on Dec. 28, 2021; Jun. 20, 2023; Jan. 9, 2024; Feb. 6, 2024> |
| 2. | Where a new technology venture capitalist or a new technology venture capital fund defined in subparagraph 14-3 or 14-5 of Article 2 of the Specialized Credit Finance Business Act becomes to own at least the percentage specified in paragraph (1) 1 of shares of a new technology business entity defined in subparagraph 1 of Article 2 of the Korea Technology Finance Corporation Act (hereinafter referred to as "new technology business entity"), or becomes the largest investor by participating in the establishment of a new technology business entity, jointly with another company; |
| 3. | Where a company required to report its business combination becomes to own at least the percentage specified in paragraph (1) 1 of shares of any of the following companies, or becomes the largest investor by participating in the establishment of any of the following companies, jointly with another company: |
| 4. | Where a company required to report its business combination becomes the largest investor by jointly participating in the establishment of a private equity fund under Article 9 (19) of the Capital Markets and Financial Investment Business Act with other companies; |
| (4) | Paragraphs (1) and (2) shall not apply where the head of the relevant central administrative agency has had a prior consultation with the Fair Trade Commission about the relevant business combination in accordance with other statutes. |
| (5) | Shares owned by related parties to the relevant company shall be aggregated for the purpose of calculating the ratio of shares owned or acquired, or determining whether the company or related party becomes the largest investor pursuant to paragraph (1) 1, 2, or 5. |
| (6) | A report on a business combination under paragraph (1) shall be filed within 30 days after the date of the business combination: Provided, That a report on any of the following business combinations shall be filed within a period beginning on the date prescribed by Presidential Decree, such as the date a merger contract is concluded, and ending on the date prior to the date of the business combination: |
| 1. | A business combination conducted in the manner specified in paragraph (1) 1, 2, 4, or 5 (excluding cases prescribed by Presidential Decree) in which one or more large companies are involved; |
| 2. | A business combination conducted in the manner specified in paragraph (2). |
| (7) | Upon receipt of a report filed pursuant to paragraph (6), the Fair Trade Commission shall review whether the business combination reported is subject to Article 9 within 30 days after the filing date of the report and shall give notice of the results thereof to the person who has filed the relevant report: Provided, That the Fair Trade Commission may extend the period by up to 90 days, where deemed necessary. |
| (8) | No person required to report under the proviso, with the exception of the subparagraphs, of paragraph (6) shall own shares, file for merger registration, fulfill a contract for acquisition by transfer of business, or subscribe for shares, until the person is given notice of the results of review by the Fair Trade Commission under paragraph (7). |
| (9) | A person who intends to conduct a business combination may request the Fair Trade Commission to review whether the business combination is categorized as practices substantially restricting competition, even before the reporting period under paragraph (6). |
| (10) | Upon receipt of a request for review under paragraph (9), the Fair Trade Commission shall give notice of the results thereof to the person who has made the request within 30 days after the request: Provided, That the Fair Trade Commission may extend the period by up to 90 days, where deemed necessary. |
| (11) | Where two or more persons are required to file a report under paragraphs (1) and (2), they shall jointly file a report: Provided, That where the Fair Trade Commission, upon request of one of the member companies of the business group to which the person required to file a report belongs, designates the relevant company as an agent to file a report on business combination, as prescribed by Presidential Decree, the agent may file a report thereon. |
| (12) | Article 9 (5) shall apply mutatis mutandis to the total assets or sales of a company required to report its business combination and its partner company under paragraph (1). |
| Article 12 (Special Cases concerning Procedures for Reporting Business Combinations) |
| (1) | A person that applies for approval, approval for change, etc. (hereafter in this Article referred to as "approval, etc.") of establishment or merger of a corporation, change of the largest investor, etc. falling under any of the following (hereafter in this Article referred to as "establishment, etc. of a corporation") may submit a document for reporting business combinations together when applying for approval, etc. to the competent administrative agency in charge of granting approval, etc. (including the Korea Communications Commission; hereafter in this Article, the same shall apply) where the establishment, etc. of a corporation is required to report pursuant to Article 11 (1) or (2): |
| 1. | A merger of a corporation under Article 15 (1) 1 of the Broadcasting Act (limited to a corporation that is a CATV broadcasting business entity under subparagraph 3 (b) of Article 2 of that Act; hereafter in this Article referred to as "CATV broadcasting business entity"); |
| 2. | Where a person intends to become the largest investor of a CATV broadcasting business entity or to substantially control the management of a CATV broadcasting business entity pursuant to Article 15-2 (1) of the Broadcasting Act. |
| (2) | Where an applicant for approval, etc. submits a document for reporting business combinations to the competent administrative agency pursuant to paragraph (1), the date such agency receives the document shall be deemed the date of reporting under Article 11 (1) and (2). |
| (3) | Upon receipt of a document for reporting business combinations submitted pursuant to paragraph (1), the competent administrative agency shall without delay forward such document to the Fair Trade Commission. |
| (4) | A person required to report a business combination pursuant to the proviso, with the exception of the subparagraphs, of Article 11 (6) may submit a document for approval, etc. of establishment, etc. of a corporation together when filing a report on a business combination with the Fair Trade Commission. |
| (5) | Upon receipt of a document for approval, etc. of establishment, etc. of a corporation submitted pursuant to paragraph (4), the Fair Trade Commission shall without delay forward such document to the competent administrative agency. |
| Article 13 (Prohibition of Acts of Circumventing Law) |
| (1) | No person shall commit an act to evade the application of Article 9 (1). |
| (2) | The types of, and criteria for, acts of circumventing law under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 13-2 (Submission of Correction Schemes) |
| (1) | A person required to report a business combination pursuant to Article 11 (1) and (2) may submit to the Fair Trade Commission the corrective measures necessary to resolve concerns about the restriction on competition caused by the business combination subject to such report. |
| (2) | A person who intends to submit a correction scheme pursuant to paragraph (1) shall submit it in writing within the review period under Article 11 (7). |
| (3) | If the Fair Trade Commission deems that the correction scheme submitted pursuant to paragraph (1) fails to meet the following requirements, the Fair Trade Commission may request the person who has submitted the correction scheme to revise and resubmit the correction scheme: |
| 1. | The correction scheme shall be sufficient to ease the concerns over a possible restriction on competition (hereafter in this Article referred to as "concerns over a possible restriction on competition") caused by the business combination; |
| 2. | The correction scheme necessary for effectively easing the concerns over a possible restriction on competition shall be able to be implemented within an appropriate period. |
| (4) | The period required to revise the correction scheme under paragraph (3) shall not be included in the review period under Article 11 (7). |
| (5) | Except as provided in paragraphs (1) through (4), matters necessary for the methods, procedures, etc. for submitting correction schemes shall be determined and publicly notified by the Fair Trade Commission. |
[This Article Newly Inserted on Feb. 6, 2024]
| Article 14 (Corrective Measures) |
| (1) | Where a violation of Article 9 (1) or 13 is or is likely to be committed, the Fair Trade Commission may order the relevant business entity (in cases of a violation of Article 9 (1), referring to the company involved in the business combination (including its related party, where it is impracticable to rectify the negative effects of competition restrictions only by taking corrective measures against the companies involved in the business combination, or it is necessary to rectify the negative effects of competition restrictions in the business area in which the related party to the company involved in the business combination conducts business)) or the relevant violator to take the following corrective measures; in such cases, upon receipt of a report under the proviso, with the exception of the subparagraphs, of Article 11 (6), an order to take corrective measures shall be issued within the period under paragraph (7) of that Article: |
| 1. | Cessation of the violation at issue; |
| 2. | Disposition of all or some of the shares; |
| 3. | Resignation of executive officers; |
| 5. | Publication of a fact that a corrective order has been issued; |
| 6. | Restrictions on business methods or scope of business that can prevent the negative effects of competition restrictions resulting from business combinations; |
| 7. | Other measures necessary to correct the violation of law. |
| (2) | Where the Fair Trade Commission intends to order a company to take corrective measures under paragraph (1) because a business combination reported pursuant to Article 11 (1) and (2) violates or is likely to violate Article 9 (1) and where a correction scheme is submitted pursuant to Article 13-2 (1) with respect to the business combination, the Fair Trade Commission may issue an order to take corrective measures under paragraph (1) in consideration of the correction scheme (where a correction scheme has been submitted after revision pursuant to paragraph (3) of that Article, including such revised correction scheme). <Newly Inserted on Feb. 6, 2024> |
| (3) | Where companies are merged or a company is established in violation of Article 9 (1) or 11 (8), the Fair Trade Commission may file a lawsuit to nullify such merger or establishment. <Amended on Feb. 6, 2024> |
| (4) | The criteria for imposing corrective measures under the subparagraphs of paragraph (1) on violations of Article 9 (1) shall be determined and publicly notified by the Fair Trade Commission. <Amended on Feb. 6, 2024> |
| (5) | Article 7 (2) through (4) shall apply mutatis mutandis to corrective measures specified in the subparagraphs of paragraph (1) following a merger, division, merger after division, or the establishment of a new company, etc. In such cases, "market-dominant business entity" shall be construed as "business entity". <Amended on Feb. 6, 2024> |
| Article 15 (Enforcing Compliance with Corrective Measures) |
No person issued with an order to dispose of shares pursuant to Article 14 (1) shall exercise voting rights in such shares from the date of receiving such order.
| Article 16 (Enforcement Fines) |
| (1) | The Fair Trade Commission may impose on a person that has failed to implement a corrective measure imposed pursuant to Article 14 for violating Article 9 (1) within the specified period, an enforcement fine not exceeding 3/10000 of the following applicable amount per day from the date the implementation deadline has expired: Provided, That a person that has conducted a business combination under Article 9 (1) 2 may be subject to an enforcement fine not exceeding two million won per day from the date the implementation deadline has expired: |
| 1. | In cases of a business combination under Article 9 (1) 1 or 5: The aggregate of the book value of shares acquired or owned and liabilities underwritten; |
| 2. | In cases of a business combination under Article 9 (1) 3: The aggregate of the book value of shares distributed in return for the merger and liabilities underwritten; |
| 3. | In cases of a business combination under Article 9 (1) 4: The price for the acquisition by transfer of business. |
| (2) | Matters necessary for the imposition, payment, collection, refund, etc. of enforcement fines shall be prescribed by Presidential Decree: Provided, That enforcement fines in arrears shall be collected in the same manner as delinquent national taxes. |
| (3) | The Fair Trade Commission may entrust the Commissioner of the National Tax Service with the affairs related to the collection of enforcement fines or disposition on delinquency under paragraphs (1) and (2), as prescribed by Presidential Decree. |
CHAPTER IV RESTRICTIONS ON CONCENTRATION OF ECONOMIC POWER
| Article 17 (Reporting on Establishment of, or Conversion into, Holding Companies) |
A person that has established a holding company or has converted his or her company into a holding company shall file a report thereon to the Fair Trade Commission, as prescribed by Presidential Decree.
| Article 18 (Restrictions on Acts by Holding Companies) |
| (1) | The terms used in this Article are defined as follows: |
| 1. | The term "joint stock corporation" means a corporation in which two or more investors (any person other than a person prescribed by Presidential Decree, among investors in a relationship as related parties, shall be deemed a single person) who own substantial amounts of equity that entitle them to exercise influence on corporate management, substantially restrict the transfer of equity shares by means of a contract or other equivalent means, thereby making it impracticable to make any changes in equity shares owned by investors; |
| 2. | The term "venture holding company" means a holding company meeting the criteria prescribed by Presidential Decree, which has a venture business or a small and medium enterprise prescribed by Presidential Decree as its subsidiary. |
| (2) | No holding company shall perform any of the following acts: |
| 1. | Holding liabilities in excess of twice the total capital (referring to the total assets minus the amount of liabilities, as presented on the balance sheet; hereinafter the same shall apply): Provided, That where a holding company holds liabilities in excess of twice its total capital as at the time the company is converted into, or incorporated as, a holding company, it may hold liabilities in excess of twice its total capital for two years from the date it is converted into, or incorporated as, a holding company; |
| 2. | Owning less than 50/100 of the total number of shares issued by its subsidiary (it shall be 30/100 where the subsidiary is a listed corporation, a corporation listed on foreign stock exchanges publicly notified by the Fair Trade Commission whose listing requirements, such as the diversification of stock ownership, are equivalent to the listing requirements on the domestic securities market prescribed by Presidential Decree as a securities market under the Financial Investment Services and Capital Markets Act (hereinafter referred to as "overseas listed corporation"), or a joint stock corporation; and it shall be 20/100 in cases of a subsidiary of a venture holding company; hereafter in this Article referred to as the "subsidiary shareholding standards"): Provided, That this shall not apply to any holding company that falls short of the subsidiary shareholding standards on any of the following grounds: |
| (a) | Where a holding company owns shares of its subsidiary, falling short of the subsidiary shareholding standards, as at the time it is converted into, or incorporated as, a holding company, and it is within two years from the date such company is converted into, or incorporated as, a holding company; |
| (b) | Where a holding company ceases to meet the subsidiary shareholding standards as its subsidiary that was a listed corporation, an overseas listed corporation, or a joint stock corporation ceases to be such corporation, and it is within one year from the date the subsidiary ceases to be such corporation; |
| (c) | Where a company that was a venture holding company ceases to be such holding company and thereby ceases to meet the subsidiary shareholding standards, and it is within one year from the date it ceases to be such holding company; |
| (e) | Where a non-subsidiary becomes a subsidiary of a holding company and thereby the holding company falls short of the subsidiary shareholding standards, and it is within one year from the date the non-subsidiary becomes its subsidiary; |
| (f) | Where a holding company ceases to meet the subsidiary shareholding standards in the course of making its subsidiary become a non-subsidiary, and it is within one year from the date it ceases to meet such standards (limited to where the subsidiary becomes a non-subsidiary within the same period); |
| (g) | Where a holding company ceases to meet the subsidiary shareholding standards as its subsidiary has merged with another company, and it is within one year from the date it ceases to meet such standards; |
| 3. | Owning shares of a domestic non-affiliate (excluding a company that operates a private investment project in the manner prescribed in subparagraphs 1 through 4 of Article 4 of the Act on Public-Private Partnerships in Infrastructure; hereafter in this subparagraph, the same shall apply) in excess of 5/100 of the total number of shares issued by the domestic company (not applicable to a venture holding company, or a holding company that owns shares of any domestic non-affiliate, the total value of which is less than 15/100 of the total value of the shares of its subsidiaries); or owning shares of a domestic affiliate other than its subsidiary: Provided, That this shall not apply to either any domestic non-affiliate or any domestic affiliate that owns shares on any of the following grounds: |
| (a) | Where a holding company owns shares as prescribed in the main clause of this subparagraph as at the time it is converted into, or incorporated as, a holding company, and it is within two years from the date it is converted into, or incorporated as, a holding company; |
| (b) | Where it is within one year from the date a holding company owns shares as prescribed in the main clause of this subparagraph in the course of making a non-affiliate become its subsidiary (limited to where the non-affiliate becomes its subsidiary within the same period); |
| (c) | Where a holding company makes a domestic affiliate whose shares are not owned by the company become its subsidiary, during which the holding company acquires shares of the domestic affiliate; and it is within one year from the date the holding company acquires such shares (limited to where the affiliate becomes its subsidiary within the same period); |
| (d) | Where it is within one year from the date a subsidiary of a holding company is excluded from its subsidiaries in the course of making the subsidiary become a non-subsidiary; |
| 4. | Owning shares of a domestic company that is not a company engaging in financial business or insurance business (including a company meeting the criteria prescribed by Presidential Decree, such as having a close relationship to financial business or insurance business) in cases of a holding company that owns shares of its subsidiary engaging in financial business or insurance business (hereinafter referred to as "financial holding company"): Provided, That if the holding company owns shares of a domestic company other than a company engaging in financial business or insurance business as at the time of conversion into, or incorporation as, a financial holding company, the holding company may own the shares of the domestic company for two years from the date of conversion into, or incorporation as, a financial holding company; |
| 5. | Owning shares of a domestic company engaging in financial business or insurance business in cases of a holding company that is not a financial holding company (hereinafter referred to as "general holding company"): Provided, That if the holding company owns shares of a domestic company engaging in financial business or insurance business as at the time of conversion into, or incorporation as, a general holding company, the holding company may own the shares of the domestic company for two years from the date of conversion into, or incorporation as, a general holding company. |
| (3) | None of the subsidiaries of a general holding company shall perform any of the following acts: |
| 1. | Owning less than 50/100 of the total number of shares issued by its second-tier subsidiary (it shall be 30/100 where the second-tier subsidiary is a listed corporation, an overseas listed corporation, or a joint stock corporation; and it shall be 20/100 in cases of a subsidiary of a venture holding company (limited to a venture holding company that is a subsidiary of a general holding company); hereafter in this Article referred to as the "second-tier subsidiary shareholding standards"): Provided, That this shall not apply to any subsidiary that falls short of the second-tier subsidiary shareholding standards on any of the following grounds: |
| (a) | Where a company owns shares of a second-tier subsidiary, falling short of the second-tier subsidiary shareholding standards, as at the time it becomes a subsidiary; and it is within two years from the date it becomes a subsidiary; |
| (b) | Where a subsidiary of a general holding company ceases to meet the second-tier subsidiary shareholding standards as its second-tier subsidiary that was a listed corporation, an overseas listed corporation, or a joint stock corporation ceases to be such corporation, and it is within one year from the date the second-tier subsidiary ceases to be such corporation; |
| (c) | Where a subsidiary of a general holding company ceases to be a venture holding company and thereby ceases to meet the second-tier subsidiary shareholding standards, and it is within one year from the date such subsidiary ceases to be a venture holding company; |
| (d) | Where a subsidiary of a general holding company ceases to meet the second-tier subsidiary shareholding standards, as its second-tier subsidiary preferentially allots shares to the employee stock ownership association pursuant to Article 165-7 of the Financial Investment Services and Capital Markets Act while offering and selling shares, or a claim is filed for converting convertible bonds or bonds with warrant issued by its second-tier subsidiary pursuant to Article 513 or 516-2 of the Commercial Act or the preemptive right is exercised; and it is within one year from the date the subsidiary ceases to meet such standards; |
| (e) | Where a company that was not a second-tier subsidiary becomes a second-tier subsidiary and the second-tier subsidiary shareholding standards ceases to be met, and it is within one year from the date the company becomes a second-tier subsidiary; |
| (f) | Where the second-tier subsidiary shareholding standards ceases to be met in the course of making a second-tier subsidiary become a non second-tier subsidiary, and it is within one year from the date such standards ceases to be met (limited to where the second-tier subsidiary becomes a non second-tier subsidiary within the same period); |
| (g) | Where it is within one year from the date the second-tier subsidiary shareholding standards ceases to be met as a second-tier subsidiary merges with another company; |
| 2. | Owning shares of a domestic affiliate that is not a second-tier subsidiary: Provided, That this shall not apply to any subsidiary of a general holding company that owns shares of a domestic affiliate on any of the following grounds: |
| (a) | Where a subsidiary owns shares of a domestic affiliate as at the time it becomes a subsidiary, and it is within two years from the date it becomes a subsidiary; |
| (b) | Where it is within one year, while making a non-affiliate become a second-tier subsidiary, from the date the non-affiliate becomes an affiliate (limited to where the company becomes a second-tier subsidiary within the same period); |
| (c) | Where a subsidiary makes a domestic affiliate whose shares are not owned by the subsidiary become a second-tier subsidiary, during which the subsidiary acquires shares of the domestic affiliate; and it is within one year from the date the subsidiary acquires such shares (limited to where the domestic affiliate becomes a second-tier subsidiary within the same period); |
| (d) | Where it is within one year from the date a second-tier subsidiary is excluded from second-tier subsidiaries (limited to where the second-tier subsidiary ceases to be an affiliate within the same period), in the course of making the second-tier subsidiary become a non-second-tier subsidiary; |
| (e) | Where a second-tier subsidiary acquires shares of another subsidiary due to its merger with such subsidiary, and it is within one year from the date the second-tier subsidiary acquires such shares; |
| (f) | Where a subsidiary that holds its own shares acquires shares of another domestic affiliate due to corporate division, and it is within one year from the date the subsidiary acquires such shares; |
| 3. | Controlling a company engaging in financial business or insurance business as a second-tier subsidiary: Provided, That where a company controls another company engaging in financial business or insurance business as a second-tier subsidiary as at the time it becomes a subsidiary of a general holding company, it may control the second-tier subsidiary for two years from the date it becomes a subsidiary. |
| (4) | None of the second-tier subsidiaries of a general holding company shall own shares of a domestic affiliate: Provided, That this shall not apply in any of the following cases: |
| 1. | Where a company owns shares of a domestic affiliate as at the time such company becomes a second-tier subsidiary, and it is within two years from the date the company becomes a second-tier subsidiary; |
| 2. | Where a domestic non-affiliate whose shares are owned by a third-tier subsidiary becomes an affiliate, and it is within one year from the date such company becomes an affiliate; |
| 3. | Where it is within one year from the date a second-tier subsidiary that owns its own shares acquires shares of another domestic affiliate due to corporate division; |
| 4. | Where a second-tier subsidiary owns the total number of shares issued by a domestic affiliate (excluding a company engaging in financial business or insurance business); |
| 5. | Where a second-tier subsidiary is a venture holding company, and such second-tier subsidiary owns at least 50/100 of the total number of shares issued by a domestic affiliate (excluding a company engaging in financial business or insurance business). |
| (5) | No company whose shares are owned by a second-tier subsidiary pursuant to paragraph (4) 4 or 5 (hereinafter referred to as "third-tier subsidiary") shall own shares of a domestic affiliate: Provided, That this shall not apply in any of the following cases: |
| 1. | Where a company owns shares of a domestic affiliate as at the time such company becomes a third-tier subsidiary, and it is within two years from the date the company becomes a third-tier subsidiary; |
| 2. | Where a domestic non-affiliate whose shares are owned by a third-tier subsidiary becomes an affiliate, and it is within one year from the date such company becomes an affiliate; |
| 3. | Where a company that was a venture holding company, which is a second-tier subsidiary of a general holding company, ceases to meet the standards under paragraph (1) 2 and thereby ceases to meet the shareholding standards under paragraph (4) 5, and it is within one year from the date such company ceases to meet the standards. |
| (6) | For the purpose of the proviso of paragraph (2) 1, subparagraphs 2 (a) and 3 (a) of paragraph (2), the provisos of subparagraphs 4 and 5 of paragraph (2), paragraph (3) 1 (a) and 2 (a), the proviso of subparagraph 3 of paragraph (3), and paragraphs (4) 1 and (5) 1; the grace period provided in each applicable provision may be extended by two years with the approval of the Fair Trade Commission, where it is impracticable to reduce the amount of debt or acquire or dispose of shares due to changes in economic conditions such as stock price fluctuations, a contract prohibiting the disposal of shares, substantial business loss, or other grounds. |
| (7) | A holding company shall submit to the Fair Trade Commission a report on the details of its business, such as the current status of shareholdings of the holding company, and its subsidiaries, second-tier subsidiaries, and third-tier subsidiaries (hereinafter referred to as "holding company, etc.") and their financial standings, as prescribed by Presidential Decree. |
| Article 19 (Restrictions on Establishment of Holding Companies by Business Groups Subject to Limitations on Cross Shareholding) |
Where the same person that controls a member company of a business group subject to limitations on cross shareholding designated pursuant to the former part of Article 31 (1) (hereinafter referred to as "business group subject to limitations on cross shareholding") or his or her related party intends to establish a holding company or to convert his or her company into a holding company, the following debt guarantees shall be annulled: | 1. | Debt guarantees provided between a holding company and its subsidiary; |
| 2. | Debt guarantees provided between a holding company and another domestic affiliate (excluding a subsidiary controlled by the holding company); |
| 3. | Debt guarantees provided between subsidiaries; |
| 4. | Debt guarantees provided between a subsidiary and another domestic affiliate (excluding a holding company which controls the subsidiary, and another subsidiary which is controlled by the holding company). |
| Article 20 (Special Cases concerning Restrictions on Owning Shares of Financial Companies by General Holding Companies) |
| (1) | Notwithstanding Article 18 (2) 5, a general holding company may own shares of a venture investment company defined in the Venture Investment Promotion Act (hereafter in this Article referred to as "venture investment company") or shares of a specialized new technology venture financing company defined in the Specialized Credit Finance Business Act (hereafter in this Article referred to as "specialized new technology venture financing company"). <Amended on Jun. 20, 2023> |
| (2) | Where a general holding company owns shares of a venture investment company or a specialized new technology venture financing company pursuant to paragraph (1), it shall own the total number of shares issued by the venture investment company or the specialized new technology venture financing company: Provided, That this shall not apply in any of the following cases: <Amended on Jun. 20, 2023> |
| 1. | Where a general holding company owns less than the total number of shares issued by a venture investment company or a specialized new technology venture financing company, in the course of making the venture investment company or the specialized new technology venture financing company, which is not its affiliate, become its subsidiary, and it is within one year from the date of holding shares of the relevant company (limited to holding the total number of issued share within one year); |
| 2. | Where it is within one year from the date of owning less than the total number of issued shares of a venture investment company or a specialized new technology venture financing company, in the course of making the venture investment company or the specialized new technology venture financing company, which is its subsidiary, become a non-subsidiary (limited to disposing of all shares within one year from the date of owning less than the total number of issued shares). |
| (3) | No venture investment company or specialized new technology venture financing company whose shares are owned by a general holding company pursuant to paragraph (1) shall commit any of the following acts: Provided, That subparagraphs 1 through 5 shall not apply in any case specified in the subparagraphs of paragraph (2): <Amended on Jun. 20, 2023> |
| 1. | Having debts exceeding twice the total capital; |
| (a) | An investment association in which an entity other than a member company of the business group to which the relevant company belongs has invested in excess of the ratio prescribed by Presidential Decree, within 40/100 of the total amount of investment; |
| (b) | An investment association that has been invested by a company engaging in financial business or insurance business among member companies of the business group to which the relevant company belongs; |
| (c) | An investment association in which a related party to the relevant company (limited to the same person and his or her relatives) has invested (limited to a business group in which the same person is a natural person); |
| 5. | Making any of the following investments (referring to any investment specified in the items of subparagraph 1 of Article 2 of the Venture Investment Promotion Act, and including investment through the execution of business of an investment association): |
| (a) | Investing in a member company of the business group to which the relevant company belongs; |
| (b) | Investing in a company invested by a related party to the relevant company (limited to the same person and his or her relatives); |
| (c) | Investing in a member company of a business group subject to disclosure; |
| (d) | Investing the amount exceeding 20/100 of the total assets (including the investment amount of all investment associations in operation) in an overseas enterprise; |
| 6. | Causing a related party (limited to the same person and his or her relatives) to the relevant company (including an investment association whose business is executed by the relevant company) or an affiliate invested by its related party, other than a holding company, etc., to acquire or own shares, bonds, etc. of a company in which the relevant company has invested. |
| (4) | Where a general holding company owns shares of a venture investment company or of a specialized new technology venture financing company pursuant to paragraph (1), it shall report such fact to the Fair Trade Commission within four months from the date of acquisition or ownership of the shares, as determined and publicly notified by the Fair Trade Commission. <Amended on Jun. 20, 2023> |
| (5) | A venture investment company or a specialized new technology venture financing company which is a subsidiary of a general holding company shall report to the Fair Trade Commission the current status of investment by itself or by all investment associations that it operates, the details of investors, etc., as determined and publicly notified by the Fair Trade Commission. <Amended on Jun. 20, 2023> |
| Article 21 (Prohibition of Cross Shareholding) |
| (1) | No domestic member company of a business group subject to limitations on cross shareholding shall acquire or own shares of a domestic affiliate that has acquired or owned its own shares: Provided, That this shall not apply in any of the following cases: |
| 1. | Merger of a company or acquisition by transfer of all business; |
| 2. | Exercise of security rights or the receipt of an accord and satisfaction; |
| (2) | A company that has made an investment pursuant to the proviso, except the subparagraphs, of paragraph (1) shall dispose of the shares within six months from the date of acquisition or ownership of the shares: Provided, That this shall not apply where a domestic affiliate that has acquired or owned the company's shares disposes of such shares. |
| (3) | No domestic member company of a business group subject to limitations on cross shareholding, which is a venture investment company defined in the Venture Investment Promotion Act, shall acquire or own shares of any domestic affiliate. <Amended on Jun. 20, 2023> |
| Article 22 (Prohibition of Circular Shareholding) |
| (1) | No domestic member company of a business group subject to limitations on cross shareholding shall secure any shareholding in an affiliate (limited to any shareholding in a domestic affiliate; hereinafter the same shall apply) to form a circular shareholding; and no domestic affiliate in a circular shareholding relationship among the member companies of a business group subject to limitations on cross shareholding shall secure any additional shareholding in an issuing company (among shares that a company having a shareholding in an affiliate has acquired or owned by allotment of new shares under Article 418 (1) of the Commercial Act or by stock dividends under Article 462-2 (1) (hereinafter referred to as "new share allotment, etc."), shares within its equity ratio prior to new share allotment, etc. and any shareholding in an affiliate following a merger between domestic member affiliates of a group of circular shareholding companies shall be excluded): Provided, That this shall not apply in any of the following cases: |
| 1. | A company’s merger or division, an all-inclusive share exchange or transfer, or acquisition by transfer of the entire business; |
| 2. | Exercise of security rights or the receipt of an accord and satisfaction; |
| 3. | Where a company having a shareholding in an affiliate has acquired or owned shares by new share allotment, etc., some of which are shares of an issuing company, acquired or owned in excess of its equity ratio prior to new share allotment, etc. due to share forfeiture of another shareholder, etc. or any other similar reason; |
| 4. | With regard to a company which has commenced administrative proceedings for a company showing signs of insolvency pursuant to Article 8 (1) of the Corporate Restructuring Promotion Act, where a council of financial creditors has determined, by resolution under Article 24 (2) of that Act, property contribution by the same person (including his or her relatives) or participation in a capital increase by issuing new shares (including a debt-equity swap for the relevant claims) by a company having a shareholding in an affiliate that is a shareholder of the relevant company showing signs of insolvency; |
| 5. | Where a financial creditor defined in subparagraph 2 of Article 2 of the Corporate Restructuring Promotion Act has concluded an agreement on the implementation of a work-out plan with a company showing signs of insolvency defined in subparagraph 7 of Article 2 of that Act, and a council of financial creditors has determined, by resolution, property contribution by the same person (including his or her relatives) or participation in a capital increase by issuing new shares (including a debt-equity swap for the relevant claims) by a company having a shareholding in an affiliate that is a shareholder of the relevant company showing signs of insolvency. |
| (2) | A company that has secured a shareholding in an affiliate pursuant to the proviso, with the exception of the subparagraphs, of paragraph (1) shall dispose of the relevant shares (referring to the shares acquired or owned in excess of its equity ratio prior to a decision on new share allotment, etc., or on property contribution or capital increase by issuing new shares, in the case of paragraph (1) 3 through 5) acquired or owned within the period specified in the following: Provided, That this shall not apply where the circular shareholding formed or reinforced through a shareholding in an affiliate under paragraph (1) is eliminated as one of the other member companies of a group of circular shareholding companies disposes of shares it has acquired or owned in an issuing company: |
| 1. | A company that has secured a shareholding in an affiliate pursuant to paragraph (1) 1 or 2: Six months from the date of acquisition or ownership of the relevant shares; |
| 2. | A company that has secured a shareholding in an affiliate pursuant to paragraph (1) 3: One year from the date of acquisition or ownership of the relevant shares; |
| 3. | A company that has secured a shareholding in an affiliate pursuant to paragraph (1) 4 or 5: Three years from the date of acquisition or ownership of the relevant shares. |
| Article 23 (Restrictions on Voting Rights for Circular Shareholding) |
| (1) | No domestic member company of a business group subject to limitations on cross shareholding which has secured a shareholding in an affiliate forming circular shareholding, shall exercise its voting rights in shares of an issuing company in the group of circular shareholding companies, which it has acquired or owned as of the date of designation of the business group subject to limitations on circular shareholding. |
| (2) | Paragraph (1) shall not apply where the existing circular shareholding is eliminated as one of the other domestic member companies of the group of circular shareholding companies disposes of shares it has acquired or owned in an issuing company. |
| Article 24 (Prohibition of Debt Guarantees for Affiliates) |
No domestic member company of a business group subject to limitations on cross shareholding (excluding a company engaging in financial business or insurance business) shall provide debt guarantees: Provided, That this shall not apply to any of the following debt guarantees:
| 2. | Debt guarantees for such cases prescribed by Presidential Decree as is necessary to enhance the international competitiveness of enterprises. |
| Article 25 (Restrictions on Voting Rights Held by Financial Companies, Insurance Companies, and Public Interest Corporations) |
| (1) | No domestic member company of a business group subject to limitations on cross shareholding which engages in financial business or insurance business shall exercise its voting rights in shares of its domestic affiliates that it has acquired or owned: Provided, That this shall not apply in any of the following cases: |
| 1. | Where such company acquires or owns the relevant shares to engage in financial business or insurance business; |
| 2. | Where such company acquires or owns the relevant shares by obtaining approval, etc. under the Insurance Business Act, etc. to efficiently operate and manage insured assets; |
| 3. | Where a resolution is adopted on any of the following matters at a general meeting of shareholders of the relevant domestic affiliate (limited to a listed corporation); in such cases, the number of voting shares out of the shares of the affiliate shall not exceed 15/100 of the total number of shares (excluding the number of non-voting shares under Articles 344-3 (1) and 369 (2) and (3) of the Commercial Act; hereafter in this Article, the same shall apply) issued by the affiliate, including the number of shares that can be exercised by persons other than those prescribed by Presidential Decree from among related parties to the affiliate: |
| (a) | Appointment or dismissal of an executive officer; |
| (b) | Amendment to the articles of incorporation; |
| (c) | Merger of the affiliate with another company or transfer of all or substantial part of its business to another company: Provided, That this shall not apply where the other company is an affiliate. |
| (2) | No public interest corporation (referring to a public interest corporation, etc. under Article 16 of the Inheritance Tax and Gift Tax Act; hereinafter the same shall apply) that is a related party to the same person who controls a member company of a business group subject to limitations on cross shareholding shall exercise voting rights in the shares of a domestic affiliate controlled by the same person among the shares that such corporation has acquired or owned: Provided, That this shall not apply in any of the following cases: |
| 1. | Where a public interest corporation owns the total number of shares issued by the relevant domestic affiliate; |
| 2. | Where a resolution is adopted on any of the following matters at a general meeting of shareholders of the relevant domestic affiliate (limited to a listed corporation); in such cases, the number of voting shares out of the shares of the affiliate shall not exceed 15/100 of the total number of shares issued by the affiliate, including the number of shares that can be exercised by persons other than those prescribed by Presidential Decree from among related parties to the affiliate: |
| (a) | Appointment or dismissal of an executive officer; |
| (b) | Amendment to the articles of incorporation; |
| (c) | Merger of the affiliate with another company or transfer of all or substantial part of its business to another company: Provided, That this shall not apply where the other company is an affiliate. |
| Article 26 (Resolutions by Board of Directors on Large-Scale Internal Trading and Disclosure Thereof) |
| (1) | Where a domestic member company of a business group subject to disclosure designated under the former part of Article 31 (1) (hereinafter referred to as "business group subject to disclosure") intends to engage in any of the following trading with or for a related party (excluding an overseas affiliate; hereafter in this Article, the same shall apply) on a scale equivalent to or larger than that prescribed by Presidential Decree (hereinafter referred to as "large-scale internal trading"), it shall disclose such trading after prior resolution by the board of directors; and where it intends to change material facts under paragraph (2), it shall disclose such change after prior resolution by the board of directors: |
| 1. | Offering or trading funds, such as provisional payments or loans; |
| 2. | Offering or trading securities, such as shares or corporate bonds; |
| 3. | Offering or trading assets, such as real estate or intangible property rights; |
| 4. | Offering or trading goods or services with or for an affiliate prescribed by Presidential Decree, taking into account the composition of shareholders, etc. |
| (2) | When making a disclosure pursuant to paragraph (1), a domestic member company of a business group subject to disclosure shall include material facts prescribed by Presidential Decree, such as the purpose, scale, and terms and conditions of the trading and the trading counterparty. |
| (3) | A disclosure under paragraph (1) may be made through an institution which receives reports pursuant to Article 161 of the Financial Investment Services and Capital Markets Act. In such cases, the methods and procedures for disclosure and other necessary matters shall be determined by the Fair Trade Commission after consultation with the relevant institution. |
| (4) | Where a domestic member company of a business group subject to disclosure that engages in financial business or insurance business conducts trading that meets the criteria prescribed by Presidential Decree under standardized terms and conditions, such trading need not require resolution by the board of directors, notwithstanding paragraph (1). In such cases, the company shall disclose the details of such trading. |
| (5) | In the case of paragraph (1), a resolution that is adopted by a committee established by a listed corporation pursuant to Article 393-2 of the Commercial Act (limited to where at least three outside directors under Article 382 (3) of that Act are included in the committee and the number of outside directors is at least 2/3 of the total number of the members) shall be deemed adopted by the board of directors. |
| Article 27 (Disclosure of Material Facts by Unlisted Companies) |
| (1) | A company that meets the criteria prescribed by Presidential Decree in terms of its total assets, etc. (excluding a company engaging in financial business or insurance business), among domestic member companies of a business group subject to disclosure, other than a listed corporation, shall disclose any of the following matters: Provided, That matters disclosed pursuant to Article 26 shall be excluded herefrom: <Amended on February 6, 2024> |
| 1. | Matters prescribed by Presidential Decree which are material facts about its ownership and corporate governance, such as the current status of shareholdings of the largest shareholder and major shareholders prescribed by Presidential Decree, any change therein (excluding the current status of executive officers and any changes thereof); |
| 2. | Matters prescribed by Presidential Decree which cause material changes in its financial structure, including acquisition of assets or shares, donations, provision of security, and the underwriting of and exemption from liabilities; |
| 3. | Matters prescribed by Presidential Decree which are material facts in relation to its management, including transfer or acquisition by transfer of business, a merger or division, and share swaps or exchanges. |
| (2) | Article 26 (2) and (3) shall apply mutatis mutandis to disclosure prescribed in paragraph (1). |
| Article 28 (Disclosure of Current Status of Business Groups) |
| (1) | A company that meets the criteria prescribed by Presidential Decree in terms of its total assets, etc., among domestic member companies of a business group subject to disclosure, shall disclose any of the following matters about the business group, which are matters prescribed by Presidential Decree: |
| 2. | Current status of shareholdings; |
| 3. | Current status of its domestic affiliates that are not holding companies, etc. (limited to where the combined total assets of the holding companies, etc. are at least 50/100 of the aggregate of the total assets of the domestic member companies of the business group (or the total capital or capital stock, whichever is greater, in cases of a company engaging in financial business or insurance business)); |
| 4. | Current status of cross shareholding in which two domestic affiliates have acquired or owned each other's shares; |
| 5. | Current status of circular shareholding; |
| 6. | Current status of debt guarantees; |
| 7. | Whether it has exercised voting rights with respect to shares that it has acquired or owned in its domestic affiliates (excluding the exercise of voting rights in shares of a company engaging in financial business or insurance business); |
| 8. | Current status of trading with related parties. |
| (2) | The same person who controls a member company of a business group subject to disclosure shall disclose any of the following matters: Provided, That this shall not apply where the same person cannot make a disclosure for reasons prescribed by Presidential Decree, such as unconsciousness: |
| 1. | Matters prescribed by Presidential Decree, such as the composition of shareholders of the overseas affiliates in which a related party (referring only to the same person who is a natural person and his or her relatives: hereafter in this subparagraph, the same shall apply), either alone or together with other related parties, owns at least 20/100 of the total number of issued shares; |
| 2. | Matters prescribed by Presidential Decree including the current status of shareholdings of the overseas affiliates that own shares in domestic member companies of a business group subject to disclosure, either directly or by methods prescribed by Presidential Decree, and the current status of circular shareholding in which one or more overseas affiliates are included. |
| (3) | Article 26 (2) and (3) shall apply mutatis mutandis to disclosure prescribed in paragraphs (1) and (2). |
| (4) | Except as provided in paragraph (3), matters necessary for the timing of, and methods and procedures for, disclosure prescribed in paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 29 (Resolutions by Board of Directors of Public Interest Corporations That Are Related Parties and Disclosure Thereof) |
| (1) | Where a public interest corporation that is a related party to the same person who controls a member company of a business group subject to disclosure intends to engage in any of the following trading or to change material facts, it shall disclose such after prior resolution by the board of directors: |
| 1. | Acquisition or disposal of shares of a domestic member company of the relevant business group subject to disclosure; |
| 2. | Any of the following trading on a scale equivalent to or larger than that prescribed by Presidential Decree, with or for a related party (excluding overseas affiliates; hereafter in this Article, the same shall apply) to the relevant business group subject to disclosure: |
| (a) | Offering or trading funds, such as provisional payments or loans; |
| (b) | Offering or trading securities, such as shares or corporate bonds; |
| (c) | Offering or trading assets, such as real estate or intangible property rights; |
| (d) | Offering or trading goods or services with or for an affiliate prescribed by Presidential Decree, taking into account the composition of shareholders, etc. |
| (2) | Article 26 (2) and (3) shall apply mutatis mutandis to disclosure prescribed in paragraph (1). |
| Article 30 (Reporting on Current Status of Shareholdings) |
| (1) | A domestic member company of a business group subject to disclosure shall file with the Fair Trade Commission a report on the current status of shareholdings of its shareholders and its financial standing, and the current status of shareholdings in other domestic companies, as prescribed by Presidential Decree. |
| (2) | A domestic member company of a business group subject to limitations on cross shareholding shall file with the Fair Trade Commission a report on the current status of debt guarantees, after receiving verification thereof from a domestic financial institution, as prescribed by Presidential Decree. |
| (3) | The proviso of Article 11 (11) shall apply mutatis mutandis to reporting prescribed in paragraphs (1) and (2). |
| Article 31 (Designation of Business Groups Subject to Limitations on Cross Shareholding) |
| (1) | The Fair Trade Commission shall designate a business group whose total assets calculated as prescribed by Presidential Decree are at least five trillion won as a business group subject to disclosure, as prescribed by Presidential Decree; and shall designate, among the designated business groups subject to disclosure, a business group whose total assets are at least the amount equivalent to 5/1000 of the gross domestic product as a business group subject to limitations on cross shareholding, as prescribed by Presidential Decree. In such cases, the Fair Trade Commission shall give notice of such designation to a domestic member company of a designated business group and a public interest corporation that is a related party to the same person who controls the company, as prescribed by Presidential Decree. |
| (2) | Articles 21 through 30 and 47 shall begin to apply from the date of receiving notice under the latter part of paragraph (1) (including notice of inclusion under Article 32 (4)). |
| (3) | Notwithstanding paragraph (2), where a company which receives notice as a domestic member company of a business group subject to limitations on cross shareholding following designation as a business group subject to limitations on cross shareholding under paragraph (1) or following inclusion in a domestic affiliate of a business group subject to limitations on cross shareholding under Article 32 (1), violates Article 21 (1) or (3) or 24 as at the time of receiving such notice, the following shall apply: |
| 1. | Where the company violates Article 21 (1) or (3) (including where the company violates Article 21 (3) as any company that issued shares acquired or owned by it is newly included in its domestic affiliates), that paragraph shall not apply for one year from the date of designation or inclusion; |
| 2. | Where the company violates Article 24 (including where the company violates that Article as any company receiving debt guarantees from it is newly included in its affiliates), that Article shall not apply for two years from the date of designation or inclusion: Provided, That Article 24 shall not apply by the date of completion of rehabilitation procedures, where rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act have been initiated for a company under the provision, with the exception of the subparagraphs, of this paragraph; and by the date of completion of rehabilitation procedures for a company receiving a debt guarantee, limited to the debt guarantee, where another company under the provision, with the exception of the subparagraphs, of this paragraph has a debt guarantee for the company for which rehabilitation procedures have been initiated. |
| (4) | The Fair Trade Commission may request materials prescribed by Presidential Decree, such as the general status of a company, the composition of shareholders and executive officers of a company, the current status of related parties, and the current status of shareholdings, from a company or its related parties for designating a business group under paragraph (1). |
| (5) | A domestic member company of a business group subject to disclosure (excluding a company that is in the process of liquidation or has been suspending its business for at least one year) shall be audited by a certified public accountant, and the Fair Trade Commission shall use the balance sheet amended in accordance with the audit opinion of the certified public accountant. |
| (6) | The standards and methods for calculating the amount equivalent to 5/1000 of the gross domestic product under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. |
| Article 32 (Inclusion in, or Exclusion from, Affiliates) |
| (1) | Where any ground for inclusion in, or exclusion from, domestic affiliates of a business group subject to disclosure arises, the Fair Trade Commission shall examine, at the request of the relevant company (including a related party to the relevant company; hereafter in this Article, the same shall apply) or ex officio, whether such company is qualified to be a domestic affiliate; thereby shall include the company in, or exclude it from, the domestic affiliates; and shall notify the company of such inclusion or exclusion. |
| (2) | Where any ground for including a public interest corporation in related parties to the same person controlling a member company of a business group subject to disclosure or for excluding such corporation therefrom arises, the Fair Trade Commission shall examine, at the request of the relevant public interest corporation (including a related party to the relevant public interest corporation; hereafter in this Article, the same shall apply) or ex officio, whether such corporation is qualified to be a related party; thereby shall include the corporation in, or exclude it from, the related parties; and shall notify the corporation of such inclusion or exclusion. |
| (3) | Where it is deemed necessary for the examination under paragraph (1) or (2), the Fair Trade Commission may request the relevant company or public interest corporation to submit necessary materials, such as the composition of its shareholders and executive officers, the status of debt guarantees, the status of loans, and the trading status. |
| (4) | Upon receipt of a request for examination under paragraph (1) or (2), the Fair Trade Commission shall notify the person that has requested the examination of the results thereof within 30 days: Provided, That the period may be extended by up to 60 days, if deemed necessary by the Fair Trade Commission. |
| Article 33 (Presumptive Date of Inclusion in Affiliates and Notice Thereof) |
Where a person that has received a request pursuant to Article 31 (4) or 32 (3) refuses to submit materials without good cause or submits false materials, and therefore the relevant company fails to be included in domestic affiliates of a business group subject to disclosure or related parties to the same person controlling a domestic affiliate of a business group subject to disclosure even though it should be included therein, the Fair Trade Commission shall deem the company to have been included in domestic affiliates or related parties to the business group subject to disclosure and notified of such inclusion on the date prescribed by Presidential Decree, taking into account the date a ground to include the company in a business group subject to disclosure arises and other similar factors.
| Article 34 (Requiring Relevant Institutions to Verify Materials) |
Where it is deemed necessary to enforce the provisions of Articles 21 through 25 or Articles 30 through 32, the Fair Trade Commission may require any of the following institutions to verify or examine necessary materials, such as the current status of shareholdings of shareholders of domestic affiliates of a business group subject to disclosure, materials on debt guarantees, materials on provisional payments, loans, or provision of collateral, and materials on transactions or provision of real estate, as prescribed by Presidential Decree: | 1. | The National Tax Service; |
| 3. | Domestic financial institutions specified in the items of subparagraph 18 of Article 2; |
| 4. | Other institutions prescribed by Presidential Decree in relation to finance or stock trading. |
| Article 35 (Disclosure of Information on Current Status of Business Groups Subject to Disclosure) |
| (1) | The Fair Trade Commission may disclose the following information about member companies of a business group subject to disclosure in order to prevent excessive concentration of economic power and enhance transparency, etc. in the business group: |
| 1. | Information prescribed by Presidential Decree about the general status, the current corporate governance, etc. of member companies of a business group subject to disclosure; |
| 2. | Information prescribed by Presidential Decree about investments, debt guarantees, trading, etc. among member companies of a business group subject to disclosure or between a member company of a business group subject to disclosure and its related parties. |
| (2) | The Fair Trade Commission may establish and operate an information system to efficiently process and disclose the information prescribed in the subparagraphs of paragraph (1). |
| Article 36 (Prohibition of Acts of Circumventing Law) |
| (1) | No person shall perform an act to circumvent any provision of Article 18 (2) through (5) and Articles 19 through 25. |
| (2) | The types of, and criteria for, acts of circumventing law under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 37 (Corrective Measures) |
| (1) | Where a business entity or a person violates or is likely to violate any provision of Article 18 (2) through (5), 19, 20 (2) through (5), 21 through 29, or 36, the Fair Trade Commission may order the relevant business entity or the violator to take the following corrective measures: |
| 1. | Cessation of the violation at issue; |
| 2. | Disposition of all or some of the shares; |
| 3. | Resignation of executive officers; |
| 5. | Revocation of debt guarantees; |
| 6. | Publication of the fact that a correction order has been received; |
| 7. | Fulfillment of disclosure obligations or correction of disclosure details; |
| 8. | Other measures necessary to correct the violation of law. |
| (2) | Where companies are merged or a company is established in violation of Article 19, the Fair Trade Commission may file a lawsuit to nullify such merger or establishment. |
| (3) | Article 7 (2) through (4) shall apply mutatis mutandis to corrective measures specified in the subparagraphs of paragraph (1) following a merger, division, merger after division, or the establishment of a new company, etc. In such cases, "market-dominant business entity" shall be construed as "business entity". |
| Article 38 (Penalty Surcharges) |
| (1) | The Fair Trade Commission may impose on a company that has acquired or owned shares in violation of Article 21 or 22, a penalty surcharge not exceeding 20/100 of the acquisition value of the shares so acquired or owned. |
| (2) | The Fair Trade Commission may impose on a company that has provided a debt guarantee in violation of Article 24, a penalty surcharge not exceeding 20/100 of the amount of the debt guarantee so provided. |
| (3) | The Fair Trade Commission may impose on a person who has violated Article 18 (2) through (5) or 20 (2) or (3), a penalty surcharge not exceeding 20/100 of the following applicable amount: |
| 1. | Where Article 18 (2) 1 is violated: The amount of liabilities exceeding twice the total capital on the balance sheet prescribed by Presidential Decree (hereafter in this paragraph referred to as "standard balance sheet"); |
| 2. | Where Article 18 (2) 2 is violated: The aggregate book value of a subsidiary’s shares on the standard balance sheet, multiplied by the following applicable ratio minus the ownership ratio of shares in the subsidiary, and then divided by the ownership ratio of shares in the subsidiary: |
| (a) | 30/100, where the relevant subsidiary is a listed corporation, an overseas listed corporation, or a joint stock corporation; |
| (b) | 20/100, where the relevant subsidiary is a subsidiary of a venture holding company; |
| (c) | 50/100, where the relevant subsidiary is not applicable under items (a) and (b); |
| 3. | Where Article 18 (2) 3 through 5, (3) 2 or 3, (4) 1 through 4, or (5) is violated: The aggregate book value of the shares owned in violation of such provisions on the standard balance sheet; |
| 4. | Where Article 18 (3) 1 is violated: The aggregate book value of a second-tier subsidiary’s shares on the standard balance sheet, multiplied by the following applicable ratio minus the ownership ratio of shares in the second-tier subsidiary, and then divided by the ownership ratio of shares in the second-tier subsidiary: |
| (a) | 30/100, where the relevant second-tier subsidiary is a listed corporation, an overseas listed corporation, or a joint stock corporation; |
| (b) | 20/100, where the relevant second-tier subsidiary is a subsidiary of a venture holding company; |
| (c) | 50/100, where the relevant second-tier subsidiary is not applicable under items (a) and (b); |
| 5. | Where Article 18 (4) 5 is violated: The aggregate book value of shares of a domestic affiliate in which the relevant second-tier subsidiary that is a venture holding company owns less than 50/100 of the total number of issued shares, as presented on the standard balance sheet, multiplied by 50/100 minus the ownership ratio of shares in the domestic affiliate, and then divided by the ownership ratio of shares in the domestic affiliate; |
| 6. | Where Article 20 (2) is violated: The aggregate book value of the relevant subsidiary's shares on the standard balance sheet, divided by the ownership ratio of shares in the subsidiary, and then multiplied by the ratio of shares that are not held by the person among the shares issued by the relevant subsidiary; |
| 7. | Where Article 20 (3) 1 is violated: The amount of liabilities exceeding twice the total capital on the standard balance sheet; |
| 8. | Where Article 20 (3) 4 is violated: The amount of investment equivalent to the amount of violation; |
| 9. | Where Article 20 (3) 5 is violated: The aggregate book value of shares, bonds, etc. owned in violation of such provisions, as presented on the standard balance sheet; |
| 10. | Where Article 20 (3) 6 is violated: The aggregate book value of shares, bonds, etc. which are made to be owned in violation of such provisions, as presented on the standard balance sheet. |
| Article 39 (Enforcing Compliance with Corrective Measures) |
| (1) | No person that has a cross shareholding or a circular shareholding in violation of Article 21 or 22 shall exercise voting rights in all of such shares from the date the person receives the relevant corrective measure to the date the violation of law is corrected. |
| (2) | No person issued with an order to dispose of shares pursuant to Article 37 (1) shall exercise voting rights in such shares from the date the person receives such order. |
CHAPTER V RESTRICTIONS ON ILLEGAL CARTEL CONDUCT
| Article 40 (Prohibition of Illegal Cartel Conduct) |
| (1) | No business entity shall agree to engage in any of the following conduct that unfairly restricts competition jointly with other business entities (hereinafter referred to as "illegal cartel conduct") by contract, agreement, resolution, or any other method or cause other business entities to do so: |
| 1. | Determining, maintaining, or changing prices; |
| 2. | Determining the terms and conditions for transactions of goods or services, or for payments of their prices or fees; |
| 3. | Imposing limitations on production, delivery, transportation, or transactions of goods or on transactions of services; |
| 4. | Imposing limitations on the area in which transactions can be made or on the other party to a transaction; |
| 5. | Hindering or imposing limitations on the establishment or extension of facilities or the installation of equipment necessary to produce goods or to provide services; |
| 6. | Imposing limitations on kinds of, and standards for, goods or services to be produced or provided; |
| 7. | Jointly performing and managing the main parts of business or establishing a company, etc. to perform and manage such parts; |
| 8. | Agreeing on a successful bidder, winning bidder, bidding price, successful bidding price, or other matters prescribed by Presidential Decree in a bidding or auction; |
| 9. | Other practices substantially restricting competition in a particular business area by hindering or imposing limitations on the business activities or the details of business of other business entities (including business entities that engage in such conduct) or by exchanging information prescribed by Presidential Decree, such as the price and the production volume. |
| (2) | Paragraph (1) shall not apply where illegal cartel conduct is performed for any of the following purposes, meets the requirements prescribed by Presidential Decree, and has been authorized by the Fair Trade Commission: |
| 1. | Industrial restructuring to address the recession; |
| 2. | Research and technical development; |
| 3. | Rationalization of terms and conditions of transactions; |
| 4. | Enhancement of the competitiveness of small and medium enterprises. |
| (3) | Matters necessary for the standards, methods, and procedures for authorization under paragraph (2) and changes in authorized matters, etc. shall be prescribed by Presidential Decree. |
| (4) | Where a contract, etc. agrees to engage in illegal cartel conduct, the contract shall be invalidated between the relevant business entities. |
| (5) | Where two or more business entities which engage in any of the conduct specified in the subparagraphs of paragraph (1), fall under any one of the following cases, it shall be presumed that they have agreed to engage in any of the conduct specified in the subparagraphs of paragraph (1) jointly among themselves: |
| 1. | Where there is a reasonable probability to deem that the business entities have jointly engaged in the conduct in light of the overall circumstances, such as the relevant business area, characteristics of goods or services, economic reasons and ripple effects of the relevant conduct, and the number of contact between business entities and their contact patterns; |
| 2. | Where there is exchange of information necessary for engaging in the conduct specified in the subparagraphs of paragraph (1) (excluding practices substantially restricting competition in a particular business area by exchanging information among the practices specified in subparagraph 9). |
| (6) | The Fair Trade Commission shall determine and publicly notify the guidelines for examination of illegal cartel conduct. |
| Article 41 (Measures to Prevent Illegal Cartel Conduct for Bidding in Public Sectors) |
| (2) | The heads of public institutions prescribed by Presidential Decree shall submit bidding-related information to the Fair Trade Commission when a bidding announcement is made or a successful bidder is determined. |
| (3) | The scope of bidding-related information to be submitted to the Fair Trade Commission pursuant to paragraph (2) and the procedures for submission shall be prescribed by Presidential Decree. |
| Article 42 (Corrective Measures) |
| (1) | In the event of any illegal cartel conduct, the Fair Trade Commission may order the business entity to suspend the relevant conduct, to publish the fact that it has received a corrective order, or to take other necessary corrective measures. |
| (2) | Article 7 (2) through (4) shall apply mutatis mutandis to corrective measures under paragraph (1) following a merger, division, or merger after division or the establishment of a new company, etc. In such cases, "market-dominant business entity" shall be construed as "business entity". |
| Article 43 (Penalty Surcharges) |
Where there is illegal cartel conduct, the Fair Trade Commission may impose on the business entity a penalty surcharge not exceeding 20/100 of the sales prescribed by Presidential Decree: Provided, That in cases of no sales, etc., a penalty surcharge may be imposed not exceeding four billion won.
| Article 44 (Leniency Programs) |
| (1) | Any of the following persons (including former or current executive officers and employees) is eligible for full or partial exemption from corrective measures under Article 42 or penalty surcharges under Article 43, and may be exempted from a criminal charge under Article 129: |
| 1. | A person who has filed a leniency application concerning illegal cartel conduct; |
| 2. | A person who cooperates in the examination, deliberation, and resolution by the Fair Trade Commission in such a manner as providing evidence. |
| (2) | Where a person granted full or partial exemption from corrective measures or penalty surcharges pursuant to paragraph (1) re-violates Article 40 (1) within five years from the date of the full or partial exemption, the full or partial exemption under paragraph (1) shall not be granted. |
| (3) | In cases prescribed by Presidential Decree, such as where a person who has been granted full or partial exemption from corrective measures or penalty surcharges pursuant to paragraph (1), makes a statement different from what was stated in the course of the examination in a trial related to the illegal cartel conduct, the full or partial exemption from corrective measures or penalty surcharges under paragraph (1) may be revoked. |
| (4) | Except in cases prescribed by Presidential Decree, such as where it is necessary for handling cases, the Fair Trade Commission and its public officials shall not provide or divulge information and materials related to filing a leniency application or giving a piece of information, such as the identity of a leniency applicant or a person who has cooperated in the examination, deliberation, and resolution by the Fair Trade Commission and details of the piece of information, to any person who is not involved in handling cases. |
| (5) | Detailed matters concerning the scope of persons eligible for full or partial exemption from corrective measures or penalty surcharges under paragraph (1), the criteria for, and degree, etc. of, full or partial exemption, and the prohibition of providing and divulging information and materials under paragraph (4) shall be prescribed by Presidential Decree. |
CHAPTER VI PROHIBITION OF UNFAIR TRADE PRACTICES, PRACTICES OF RESALE PRICE MAINTENANCE, AND PROVISION OF UNDUE BENEFITS TO RELATED PARTIES
| Article 45 (Prohibition of Unfair Trade Practices) |
| (1) | No business entity shall perform any of the following acts that are likely to hinder fair trade (hereinafter referred to as "unfair trade practices") or cause its affiliate or any other business entity to perform such acts: |
| 1. | Unfairly rejecting a transaction; |
| 2. | Unfairly discriminating against the other party to a transaction; |
| 3. | Unfairly excluding a competitor; |
| 4. | Unfairly enticing a competitor's customer to make transactions with the business entity itself; |
| 5. | Unfairly force a competitor's customer to make transactions with the business entity itself; |
| 6. | Making transactions with the other party to the transaction by unfairly taking advantage of the bargaining position of the business entity itself; |
| 7. | Making transactions under the terms and conditions that unfairly restrict business activities of the other party to the transaction; |
| 8. | Unfairly disrupting business activities of other business entities; |
| 9. | Unfairly assisting a related party or another company by doing any of the following acts: |
| (a) | Providing provisional payments, loans, human resources, real estate, securities, goods, services, intangible property rights, etc. for the related party or another company or make transactions with the related party or another company under substantially advantageous terms and conditions; |
| (b) | Making transactions through a related party or another company, acting as an intermediary, that does not play a practical role in the transaction, although it is substantially advantageous to make direct transactions of goods or services with another business entity; |
| 10. | Doing any other act that is likely to hinder fair trade. |
| (2) | Neither any related party nor company shall accept any assistance that might constitute the act prescribed in paragraph (1) 9 from any other business entity. |
| (3) | The types of, and criteria for, unfair trade practices shall be prescribed by Presidential Decree. |
| (4) | The Fair Trade Commission may establish and publicly notify guidelines to be observed by business entities, where necessary to prevent a violation of paragraph (1). |
| (5) | A business entity or a trade association may voluntarily establish a covenant (hereinafter referred to as "fair competition covenant") to prevent unfair customer attraction. |
| (6) | A business entity or a trade association may request the Fair Trade Commission to examine whether its fair competition covenant is in violation of paragraph (1) 4. |
| Article 46 (Prohibition of Practices of Resale Price Maintenance) |
No business entity shall engage in practices of resale price maintenance: Provided, That this shall not apply in any of the following cases:
| 1. | Where there is good cause for practices of resale price maintenance, such as when the effect of increasing consumer welfare due to the increase in efficiency is greater than the negative effect of restricting competition; |
| 2. | In cases of published works (including electronic publications) publicly notified by the Fair Trade Commission after consultation with the heads of the relevant central administrative agencies among works defined in subparagraph 1 of Article 2 of the Copyright Act. |
| Article 47 (Prohibition of Provision of Undue Benefits to Related Parties) |
| (1) | No domestic member company of a business group subject to disclosure (limited to a business group in which the same person is a natural person) shall make any undue benefits attributable to a related party (limited to the same person and his or her relatives; hereafter in this Article, the same shall apply), by doing any of the following acts with the related party, a domestic affiliate in which the same person alone or together with other related parties owns at least 20/100 of the total number of issued shares, or a domestic affiliate in which the affiliate alone owns more than 50/100 of the total number of issued shares; in such cases, the types of, and criteria for, the following acts shall be prescribed by Presidential Decree: |
| 1. | Making transactions under the terms and conditions that are substantially more advantageous than those applied or deemed to be applied to normal transactions; |
| 2. | Providing a business opportunity that will bring the company substantial benefits if it conducts such business directly or through any company controlled by it; |
| 3. | Making transactions in cash or other financial instruments with a related party under substantially advantageous terms and conditions; |
| 4. | Making transactions on a substantial scale without reasonable consideration of business ability, financial standing, credit rating, technological prowess, quality, price, or terms and conditions of the transaction, etc. or without comparison with other business entities. |
| (2) | Paragraph (1) 4 shall not apply to transactions prescribed by Presidential Decree as inevitable to achieve the purpose of the transactions, such as increase in corporate efficiency, security, and urgency. |
| (3) | The other party to a transaction or the other party to be provided with a business opportunity under paragraph (1) shall neither make the transaction nor be provided with the business opportunity, if it might constitute any act prescribed in the subparagraphs of paragraph (1). |
| (4) | No related party shall direct any third person to do any act prescribed in paragraph (1) or (3) or involve in such act. |
| Article 48 (Prohibition of Retaliatory Measures) |
No business entity shall engage in, or cause its affiliates or any other business entity to engage in, discontinuing a transaction, reducing the transaction volume, or giving a disadvantage to any other business entity that has done any of the following acts in relation to unfair trade practices under Article 45 (1) and practices of resale price maintenance under Article 46, on the grounds that such other business entity has done such act: | 1. | Filing a request for dispute mediation under Article 76 (1); |
| 3. | Cooperating in an investigation conducted by the Fair Trade Commission under Article 81. |
| Article 49 (Corrective Measures) |
| (1) | Where any violation of Article 45 (1) or (2), 46, 47, or 48 is committed, the Fair Trade Commission may order the relevant business entity (referring to the relevant related party or company in the case of Articles 45 (2) and 47) to discontinue the relevant unfair trade practice, the practice of resale price maintenance, or the provision of undue benefits to the related party; to take measures to prevent the recurrence thereof; to prohibit the relevant retaliatory measures; to delete the pertinent provisions from the contract; to publish the fact that it has received a corrective order; and to take other necessary corrective measures. |
| (2) | Article 7 (2) through (4) shall apply mutatis mutandis to corrective measures under paragraph (1) following a merger, division, or merger after division or the establishment of a new company, etc. In such cases, "market-dominant business entity" shall be construed as "business entity". |
| Article 50 (Penalty Surcharges) |
| (1) | Where any violation of Article 45 (1) (excluding subparagraph 9), 46 or 48 is committed, the Fair Trade Commission may impose on the relevant business entity a penalty surcharge not exceeding 4/100 of the sales prescribed by Presidential Decree: Provided, That in cases of no sales, etc., a penalty surcharge not exceeding one billion won may be imposed. |
| (2) | Where any violation of Article 45 (1) 9 or (2) or 47 (1) or (3) is committed, the Fair Trade Commission may impose on the relevant related party or company a penalty surcharge not exceeding 10/100 of the sales prescribed by Presidential Decree: Provided, That in cases of no sales, etc., a penalty surcharge not exceeding four billion won may be imposed. |
CHAPTER VII TRADE ASSOCIATIONS
| Article 51 (Prohibited Acts for Trade Associations) |
| (1) | No trade association shall perform any of the following acts: |
| 1. | Unfairly restricting competition by performing an act prescribed in the subparagraphs of Article 40 (1); |
| 2. | Restricting the number of business entities that are currently operating or will operate in a particular business area; |
| 3. | Unreasonably restricting the business details or activities of member business entities (referring to business entities that are members of a trade association; hereinafter the same shall apply); |
| 4. | Causing a business entity to engage in unfair trade practices under Article 45 (1) or to engage in practices of resale price maintenance under Article 46, or aiding a business entity to do so. |
| (2) | Article 40 (2) and (3) shall apply mutatis mutandis to authorization for an act specified in paragraph (1) 1. In such cases, "business entity" shall be construed as "trade association". |
| (3) | The Fair Trade Commission may establish and publicly notify guidelines to be observed by trade associations, where necessary to prevent a violation of paragraph (1). |
| (4) | The Fair Trade Commission shall seek opinions from the heads of the relevant administrative agencies to establish the guidelines under paragraph (3). |
| Article 52 (Corrective Measures) |
| (1) | Where any violation of Article 51 is committed, the Fair Trade Commission may order the relevant trade association (including the relevant member business entities, if necessary) to discontinue the relevant act, to publish the fact that it has received a corrective order, and to take other necessary corrective measures. |
| (2) | Article 7 (2) through (4) shall apply mutatis mutandis to corrective measures under paragraph (1) following a merger, division, or merger after division or the establishment of a new company, etc. In such cases, "market-dominant business entity" shall be construed as "trade association". |
| Article 53 (Penalty Surcharges) |
| (1) | Where any violation of Article 51 (1) is committed, the Fair Trade Commission may impose on a trade association a penalty surcharge not exceeding one billion won. |
| (2) | The Fair Trade Commission may impose on a business entity involved in a violation specified in Article 51 (1) 1, a penalty surcharge not exceeding 20/100 of the sales prescribed by Presidential Decree: Provided, That in cases of no sales, etc., a penalty surcharge not exceeding four billion won may be imposed. |
| (3) | The Fair Trade Commission may impose on a business entity involved in a violation of Article 51 (1) 2 through 4, a penalty surcharge not exceeding 10/100 of the sales prescribed by Presidential Decree: Provided, That in cases of no sales, etc., a penalty surcharge not exceeding two billion won may be imposed. |
CHAPTER VIII ENFORCEMENT AGENCY
| Article 54 (Establishment of Fair Trade Commission) |
| (1) | A Fair Trade Commission shall be established under the jurisdiction of the Prime Minister in order to independently perform the functions under this Act. |
| Article 55 (Functions of the Fair Trade Commission) |
Functions of the Fair Trade Commission shall be as follows:
| 1. | Matters concerning regulation on abusive practices in terms of market-dominant positions; |
| 2. | Matters concerning restrictions on business combinations and on concentration of economic power; |
| 3. | Matters concerning regulation on illegal cartel conduct and on anti-competition acts of trade associations; |
| 4. | Matters concerning regulation prohibiting unfair trade practices, practices of resale price maintenance, and provision of undue benefits to related parties; |
| 5. | Matters concerning competition-facilitating policies through consultation and mediation, etc. in terms of anti-competitive statutes or regulations and administrative measures; |
| 6. | Matters prescribed under the jurisdiction of the Fair Trade Commission in other statutes or regulations. |
| Article 56 (International Cooperation of the Fair Trade Commission) |
| (1) | The Government may conclude an agreement to enforce this Act with a foreign government to the extent that does not violate Korean statutes and does not infringe on interests of the Republic of Korea. |
| (2) | The Fair Trade Commission may assist a foreign government in enforcing its law according to an agreement concluded pursuant to paragraph (1). |
| (3) | The Fair Trade Commission may assist a foreign country at the request of the foreign country in enforcing its law, although no agreement has been concluded with such foreign country under paragraph (1), only where the requesting country guarantees that it will comply with the Republic of Korea's request for assistance in the same or similar matters. |
| Article 57 (Composition of the Fair Trade Commission) |
| (1) | The Fair Trade Commission shall consist of nine commissioners, including one chairperson and one vice chairperson, four of whom shall be part-time commissioners. |
| (2) | From among any of the following persons who have experience or expertise in monopoly regulation, fair trade, or consumerism, the chairperson and the vice chairperson of the Fair Trade Commission shall be appointed by the President upon the recommendation of the Prime Minister, and other commissioners shall be appointed or commissioned by the President upon the recommendation of the chairperson; in such cases, the National Assembly shall hold a confirmation hearing for the chairperson: |
| 1. | A person who has served as a public official of Grade II or higher (including public officials in general service who are members of the Senior Executive Service); |
| 2. | A person who has a career as a judge, prosecutor, or attorney-at-law for at least 15 years; |
| 3. | A person with a major in law, economics, business administration, or consumerism, who has served for at least 15 years at a university or publicly authorized research institute as an associate professor or higher or in an equivalent position; |
| 4. | A person who has at least 15 years’ career in business management and consumer protection activities. |
| (3) | The chairperson and the vice chairperson shall be appointed as public officials in political service; and other full-time commissioners shall be appointed as public officials in general service who are members of the Senior Executive Service and to a fixed term position under Article 26-5 of the State Public Officials Act. |
| Article 58 (Types of Meetings) |
Meetings of the Fair Trade Commission shall be classified into meetings attended by all commissioners (hereinafter referred to as "plenary session") and meetings attended by three commissioners, including one full-time commissioner (hereinafter referred to as "subcommittee meeting").
| Article 59 (Subjects of Plenary Sessions and Subcommittee Meetings) |
| (1) | The following matters shall be deliberated on and resolved at plenary sessions: |
| 1. | Interpretation and application of statutes, regulations, rules, and public notice, etc. under the jurisdiction of the Fair Trade Commission; |
| 3. | Matters not resolved on at subcommittees or matters to be handled at plenary sessions following a decision by subcommittees; |
| 4. | Establishment of rules or public notice or amendment thereof; |
| 5. | Matters that have far-reaching effects on the economy; |
| 6. | Other matters deemed necessary to be handled at plenary sessions by themselves. |
| (2) | Matters, other than those specified in the subparagraphs of paragraph (1), shall be deliberated on and resolved at subcommittee meetings. |
| (1) | The chairperson shall represent the Fair Trade Commission. |
| (2) | The chairperson may attend and speak at meetings of the State Council. |
| (3) | If the chairperson is unable to perform his or her duties in extenuating circumstances, the vice chairperson shall act on behalf of the chairperson; and if both the chairperson and the vice chairperson are unable to perform their duties in extenuating circumstances, full-time commissioners shall act on behalf of them in the order of seniority. |
| Article 61 (Terms of Office of Commissioners) |
The chairperson, the vice chairperson, and other commissioners shall hold office for a term of three years and may be reappointed only for one consecutive term.
| Article 62 (Guarantee of Commissioners' Status) |
No commissioner shall be removed or dismissed from office against his or her own will, except in any of the following cases:
| 1. | Where a commissioner has been sentenced to imprisonment with labor or heavier punishment; |
| 2. | Where a commissioner becomes unable to perform his or her duties due to prolonged physical or mental weakness. |
| Article 63 (Prohibition of Commissioner's Political Activities) |
No commissioner shall join a political party or participate in any political activity.
| Article 64 (Quorums for Proceedings and Resolutions) |
| (1) | A plenary session shall be presided over by the chairperson, and a resolution thereof shall require the concurring vote of a majority of the incumbent commissioners. |
| (2) | A subcommittee meeting shall be presided over by a full-time commissioner attending the meeting and a resolution thereof shall require the presence of all commissioners consisting the subcommittee and the concurring vote of the commissioners present. |
| Article 65 (Making Public Hearings and Resolutions and Confidentiality of Agreement) |
| (1) | Hearings and resolutions by the Fair Trade Commission shall be made public: Provided, That this shall not apply where the Fair Trade Commission deems it necessary to protect business secrets of a business entity or trade association. |
| (2) | In principle, hearings by the Fair Trade Commission shall be conducted orally but paper hearings are permitted, if necessary. |
| (3) | No agreement on a resolution adopted by the Fair Trade Commission in relation to a case shall be made public. |
| Article 66 (Maintaining Order in Venue of Adjudicatory Proceedings) |
The chairperson of a plenary meeting or subcommittee meeting has the authority to issue an order necessary to maintain order in the venue of the adjudicatory proceedings to the parties, interested parties, witnesses, and observers, etc. who are present therein.
| Article 67 (Exclusion of, Challenge to, or Refrainment by, Commissioners) |
| (1) | A commissioner shall be excluded from deliberation and resolution on any of the following cases: |
| 1. | Where the commissioner or the current or former spouse of the commissioner is a party to the case, joint right holder, or joint obligor; |
| 2. | Where the commissioner is or was a relative of a party to the case; |
| 3. | Where the commissioner or a corporation to which he or she belongs is a consultant or adviser, etc. to a party to the case in respect of the party's legal or managerial matters, etc.; |
| 4. | Where the commissioner or a corporation to which he or she belongs has given testimony or expert opinions about the case; |
| 5. | Where the commissioner or a corporation to which he or she belongs is or was an agent of a party to the case; |
| 6. | Where the commissioner or a corporation to which he or she belongs has involved in an act or omission that is the subject matter of the case; |
| 7. | Where the commissioner has investigated or examined the case as a public official of the Fair Trade Commission. |
| (2) | If the circumstances indicate that it would be impracticable to expect fair deliberations and resolutions of a commissioner, a party may file a request for a challenge to the commissioner. In such cases, the chairperson shall decide whether to accept the request without referring the request to the Commission for resolution. |
| (3) | Where any commissioner falls under any case specified in the subparagraphs of paragraph (1) or the case specified in paragraph (2), such member may refrain from a deliberation and resolution process on the case in question. |
| Article 68 (Preparation and Correction of Written Resolutions) |
| (1) | Where the Fair Trade Commission deliberates on and passes a resolution on matters concerning whether or not this Act has been violated, it shall prepare a written resolution stating the details of such resolution and the grounds therefor, and the written resolution shall be signed and sealed by the commissioners who have participated in the resolution. |
| (2) | Where there is an evident clerical or numerical error or any other similar error in a written resolution, etc., the Fair Trade Commission may correct the written resolution, etc. either at the request of any party or ex officio. |
| Article 69 (Timing of Determination as to Violation of Act) |
Where the Fair Trade Commission passes a resolution on a violation of this Act, the Commission shall make a determination based on the facts that take place until the date it concludes a trial thereon.
| Article 70 (Establishment of Secretariat) |
The Fair Trade Commission shall have a secretariat to perform its affairs.
| Article 71 (Provisions concerning Organization) |
| (1) | Except as provided in this Act, matters necessary for the organization of the Fair Trade Commission shall be prescribed by Presidential Decree. |
| (2) | Except as provided in this Act, matters necessary for the operation, etc. of the Fair Trade Commission shall be prescribed by the Regulations of the Fair Trade Commission. |
CHAPTER IX ESTABLISHMENT OF KOREA FAIR TRADE MEDIATION AGENCY AND DISPUTE MEDIATION
| Article 72 (Establishment of Korea Fair Trade Mediation Agency) |
| (1) | A Korea Fair Trade Mediation Agency (hereinafter referred to as the "Mediation Agency") shall be established to perform the following duties: <Amended on Jun. 20, 2023> |
| 1. | To mediate disputes about suspected violations of Article 45 (1); |
| 2. | To mediate disputes prescribed by other statutes to be dealt with by the Mediation Agency; |
| 3. | To research and analyze the trend of markets or industries and fair competition; |
| 4. | To research and analyze business entities’ transaction practices and behaviors; |
| 5. | Implementation management of a consent decree under Article 89 (3) entrusted by the Fair Trade Commission pursuant to Article 90 (7); |
| 6. | Implementation and management of corrective measures entrusted by the Fair Trade Commission under Article 97-2 (2); |
| 7. | To research systems and policies related to fair trade and make suggestions thereof; |
| 8. | To conduct other projects entrusted by the Fair Trade Commission. |
| (2) | The Mediation Agency shall be a corporation. |
| (3) | The president of the Mediation Agency shall be appointed by the chairperson of the Fair Trade Commission from among persons specified in any subparagraph of Article 57 (2). |
| (4) | The Government may grant a contribution or subsidy to the Mediation Agency, within the budget, to cover expenses incurred in its establishment and operation. |
| (5) | Except as provided in this Act, the provisions of the Civil Act governing incorporated foundations shall apply mutatis mutandis to the Mediation Agency. |
| Article 73 (Establishment and Organization of Fair Trade Dispute Mediation Council) |
| (1) | A Fair Trade Dispute Mediation Council (hereinafter referred to as the "Council") shall be established under the Mediation Agency to mediate disputes about suspected violations of Article 45 (1). |
| (2) | The Council shall be composed of up to nine members, including one chairperson, who shall be full-time. <Amended on Aug. 8, 2023> |
| (3) | The chairperson of the Council shall be commissioned by the chairperson of the Fair Trade Commission upon the recommendation of the president of the Mediation Agency, from among members of the Council. <Amended on Aug. 8, 2023> |
| (4) | Members of the Council shall be appointed or commissioned by the chairperson of the Fair Trade Commission upon the recommendation of the chairperson of the Mediation Agency, from among the following persons who have experience or expertise in monopoly regulation, fair trade, or consumerism; in such cases, at least one of the following persons shall be included in the members: <Amended on Aug. 8, 2023> |
| 1. | A person who has served as a public official meeting the requirements prescribed by Presidential Decree; |
| 2. | A person who has served as a judge, prosecutor, or attorney-at-law for at least the period prescribed by Presidential Decree; |
| 3. | A person with a major in law, economics, business administration, or consumerism, who has served for at least the period prescribed by Presidential Decree at a university or publicly authorized research institute as an associate professor or higher or in an equivalent position; |
| 4. | A person who has a career of at least the period prescribed by Presidential Decree in business management, consumer protection activities, and dispute mediation. |
| (5) | Each member of the Council shall hold office for a term of three years. |
| (6) | Where there is a vacancy in the office of a member of the Council, a member to fill the vacancy shall be commissioned pursuant to paragraph (4), and such member shall serve for the remainder of his or her predecessor's term. |
| (7) | The chairperson of the Fair Trade Commission may remove or dismiss a Council member from office where he or she is found to have committed any misconduct in relation to his or her duties or he or she is deemed unfit to serve as a member on the grounds of neglect of duty, loss of dignity, etc. |
| (8) | The chairperson of the Council shall not engage in any for-profit business affairs other than his or her duties. <Newly Inserted on Feb. 6, 2024> |
| (10) | The chairperson of the Council may concurrently conduct non-profit business affairs subject to examination by the Chairperson of the Fair Trade Commission as to whether it falls under the for-profit business affairs under paragraph (9). <Newly Inserted on Feb. 6, 2024> |
| Article 74 (Meetings of Council) |
| (1) | The chairperson of the Council shall convene and preside over meetings of the Council. |
| (2) | A majority of the members of the Council shall constitute a quorum, and any resolution thereof shall require the concurring vote of a majority of those present. |
| (3) | Where the chairperson of the Council is unable to perform his or her duties in extenuating circumstances, a member of the Council designated by the chairperson of the Fair Trade Commission shall act on behalf of him or her. |
| (4) | Business entities that are the parties to a dispute to be mediated (hereinafter referred to as "disputing parties") may attend a meeting of the Council to present their opinion. |
| Article 75 (Exclusion of, Challenge to, or Refrainment by, Members of Council) |
| (1) | A member of the Council shall be excluded from mediating the relevant dispute in any of the following cases: |
| 1. | Where the member or the current or former spouse of the member is a disputing party to the dispute to be mediated, joint right holder, or joint obligor; |
| 2. | Where the member is or was a relative of a disputing party to the dispute to be mediated; |
| 3. | Where the member or a corporation to which he or she belongs is a consultant or adviser, etc. to a disputing party to the dispute to be mediated in respect of the party's legal or managerial matters, etc.; |
| 4. | Where the member or a corporation to which he or she belongs has given testimony or expert opinions about the dispute to be mediated; |
| 5. | Where the member or a corporation to which he or she belongs is or was an agent of a disputing party to the dispute to be mediated. |
| (2) | If the circumstances indicate that it would be impracticable to expect fair mediation of a member of the Council, a disputing party may file a request for a challenge to the member with the Council. |
| (3) | Where a member of the Council falls under any case specified in the subparagraphs of paragraph (1) or the case specified in paragraph (2), such member may refrain from mediating the relevant dispute. |
| Article 76 (Request for Mediation) |
| (1) | A business entity that has suffered a loss due to a suspected violation of Article 45 (1) may file a request for dispute mediation, by submitting a document stating matters prescribed by Presidential Decree (hereinafter referred to as "request for dispute mediation") to the Council. |
| (2) | Upon receipt of a report under Article 80 (2), the Fair Trade Commission may request the Council to mediate the dispute over the relevant act or case. |
| (3) | Upon receipt of a request for dispute mediation under paragraph (1) or (2), the Council shall immediately notify the Fair Trade Commission and disputing parties of the fact that it has received the application or request, etc., as prescribed by Presidential Decree. |
| (4) | A request for dispute mediation filed under paragraph (1) shall have the effect of interrupting prescription: Provided, That this shall not apply where such request is withdrawn or dismissed without prejudice. |
| (5) | In cases falling under the proviso of paragraph (4), if a judicial claim is made, bankruptcy procedures commence, or seizure, provisional seizure, or provisional disposition occurs within six months, prescription shall be deemed interrupted by filing the initial request for dispute mediation. |
| (6) | Prescription interrupted under the main clause of paragraph (4) shall begin to run anew from any of the following time: |
| 1. | When a mediation report is prepared after the establishment of a dispute mediation; |
| 2. | When a mediation process is terminated without the establishment of a dispute mediation. |
| (1) | The Council may recommend disputing parties agree on the dispute to be mediated on their own initiative or may prepare a mediation proposal and suggest such proposal to the disputing parties. |
| (2) | The Council may conduct an investigation or require disputing parties to submit relevant materials or to make an appearance, where necessary to verify the fact regarding the relevant dispute to be mediated. |
| (3) | The Council shall dismiss without prejudice a request for mediation filed in relation to any of the following acts or cases; in such cases, the Council shall obtain confirmation from the Fair Trade Commission as to whether the act or case for which the request for mediation is filed falls under subparagraph 4: |
| 1. | Where the request for mediation is filed by a person who has no direct interest in the details of the request for mediation; |
| 2. | Where the request for mediation is filed with respect to a matter not subject to the application of this Act; |
| 3. | An act meeting the criteria prescribed by Presidential Decree, for which it is appropriate for the Fair Trade Commission to directly deal with a suspected violation, taking into account the details, nature, seriousness, etc. of the violation; |
| 4. | Where the request for mediation is filed with respect to a case into which the Fair Trade Commission has commenced an investigation pursuant to Article 80 before filing the request for mediation: Provided, That this shall not apply where a request for dispute mediation is filed after receiving a disposition such as corrective measures from the Fair Trade Commission. |
| (4) | The Council shall terminate the mediation process in any of the following cases: <Amended on Jun. 20, 2023> |
| 1. | Where disputing parties have reached an agreement through mediation either by accepting the Council's recommendation or mediation proposal or on their own initiative, etc.; |
| 2. | Where disputing parties fail to reach an agreement through mediation even after 60 days (or 90 days, where both disputing parties have agreed to extend the period) from the date the Council receives a request for dispute mediation under Article 76 (1) or from the date the Council receives a request for dispute mediation from the Fair Trade Commission under paragraph (2) of that Article; |
| 3. | Where no practical benefit can be expected by proceeding with the mediation process in such cases as either of the disputing parties refuses the mediation. |
| (5) | Where the Council dismisses without prejudice a request for mediation or terminates the mediation process, it shall without delay submit a written report stating the progress of mediation and the grounds for dismissing without prejudice the request for mediation or for terminating the mediation process, etc. to the Fair Trade Commission, along with relevant documents, as prescribed by Presidential Decree, and shall notify the disputing parties of such fact. |
| (6) | With respect to a dispute to be mediated for which a disposition for corrective measure, etc. has not been rendered before the commencement of the mediation process, the Fair Trade Commission shall neither take any corrective measure under Article 49 (1) nor give any recommendation for correction under Article 88 (1) to the disputing parties until the mediation process is terminated. |
| Article 77-2 (Relationship to Litigation) |
| (1) | If a request for mediation has been filed under Article 76 (1) for a case, against which a lawsuit has been filed before or after such request and is in progress, a court which has accepted the lawsuit may suspend the litigation procedures until the mediation process is completed. |
| (2) | If the litigation procedures are not suspended under paragraph (1), the Council shall suspend the mediation process for the relevant case. |
| (3) | The Council may suspend the mediation process by its decision if a lawsuit is in progress for the same type of case or a similar case involving multiple persons for the same cause as the case for which a request for mediation has been filed. |
[This Article Newly Inserted on Jun. 20, 2023]
| Article 78 (Preparation of Mediation Reports and Validity Thereof) |
| (1) | Where disputing parties reach an agreement through mediation, the Council shall prepare a mediation report to which the mediators and the disputing parties affix their names and seals or their signatures. |
| (2) | Where disputing parties have reached an agreement through mediation on their own initiative before the commencement of the mediation process and request for preparation of a mediation report, the Council shall prepare such report. |
| (3) | Disputing parties shall submit the outcomes of the implementation of an agreement reached through mediation to the Fair Trade Commission. |
| (4) | Where an agreement is reached pursuant to paragraph (1) with respect to a dispute to be mediated for which a disposition for corrective measure, etc. has not been rendered before the commencement of the mediation process, and the agreement is implemented; the Fair Trade Commission shall neither take any corrective measure under Article 49 (1) nor give any recommendation for correction under Article 88 (1). |
| (5) | A mediation report prepared pursuant to paragraph (1) or (2) shall have the same effect as a court settlement. |
| Article 79 (Organization and Operation of Council) |
Except as provided in Articles 73 through 77, 77-2, and 78, matters necessary for the organization, operation, mediation process, etc. of the Council shall be prescribed by Presidential Decree. <Amended on Jun. 20, 2023>
CHAPTER X PROCEDURES FOR INVESTIGATIONS
| Article 80 (Recognition of and Reporting on Violations) |
| (1) | Where the Fair Trade Commission deems that there is a suspected violation of this Act, it may conduct a necessary investigation ex officio. |
| (2) | Any person may report a violation of this Act to the Fair Trade Commission. |
| (3) | Where the Fair Trade Commission makes a disposition or does not make a disposition under this Act following an investigation conducted ex officio or upon a report under paragraph (2), it shall give written notice stating the grounds, details, reasons, etc. to the parties to the relevant case: Provided, That where a written resolution is to be prepared pursuant to Article 68, the original copy of the relevant written resolution shall be sent. |
| (4) | The Fair Trade Commission shall neither order corrective measures under this Act nor impose a penalty surcharge for a violation of this Act if seven years have elapsed from the date the violation is terminated. |
| (5) | Notwithstanding paragraph (4), the Fair Trade Commission shall neither order corrective measures nor impose a penalty surcharge under this Act for illegal cartel conduct upon the expiration of the following periods: |
| 1. | Five years from the investigation commencement date prescribed by Presidential Decree, where the Fair Trade Commission commences an investigation on the relevant violation; |
| 2. | Seven years from the date the relevant violation is terminated, where the Fair Trade Commission does not commence an investigation on the relevant violation. |
| (6) | Paragraphs (4) and (5) shall not apply where a corrective measure or a disposition to impose a penalty surcharge is revoked according to a judgment of a court and a new disposition is made based on the reason for the judgment. |
| (7) | Where a party files a lawsuit because the Fair Trade Commission fails to comply with a request for inspection or copying of materials under Article 95, the period prescribed in paragraphs (4) and (5) shall be suspended for the relevant party and any other party subject to deliberation on the same case, while such period shall continue from the time the judgment becomes final and conclusive. |
| Article 81 (Investigations into Violations) |
| (1) | Where the Fair Trade Commission deems it necessary to enforce this Act, it may make the following dispositions as prescribed by Presidential Decree: |
| 1. | Requiring the parties, interested parties, or witnesses to make an appearance and hearing their opinions; |
| 2. | Designating an appraiser and requesting appraisals; |
| 3. | Issuing an order to a business entity or trade association or their executive officers and employees to give a report on costs and management status or to submit other necessary materials or articles, or temporarily keeping the submitted materials or articles. |
| (2) | Where the Fair Trade Commission deems it necessary to enforce this Act, it may authorize public officials under its control (including public officials under the control of agencies with the delegated authority under Article 122) to access the office or place of business of a business entity or trade association and to investigate its business and management, account books, documents, electronic data, voice-recording materials, video materials, and other materials or articles prescribed by Presidential Decree. |
| (3) | A public official who conducts an investigation under paragraph (2) may hear a statement of the parties, interested parties, or witnesses at a designated place, as prescribed by Presidential Decree. |
| (4) | Where the procedures for deliberation and resolution under Article 59 (1) or (2) are in progress, no investigative public official shall conduct an investigation under paragraph (2) or hear a statement of the parties under paragraph (3): Provided, That this shall not apply where a plenary session or subcommittee meeting deems it necessary upon request of an investigative public official or the parties. |
| (5) | Upon hearing a statement of the parties pursuant to paragraph (1) 1 or (3), a record of statement shall be prepared as prescribed by Presidential Decree. |
| (6) | A public official who conducts an investigation under paragraph (2) may order a business entity or trade association or their executive officers and employees to submit materials or articles necessary for the investigation, or may temporarily keep the submitted materials or articles, as prescribed by Presidential Decree. |
| (7) | In cases of temporarily keeping materials or articles of a business entity or trade association or their executive officers and employees pursuant to paragraphs (1) 3 and (6), a record of custody shall be prepared and issued, as prescribed by Presidential Decree. |
| (8) | Where the materials or articles kept pursuant to paragraphs (1) 3 and (6) fall under any of the following cases, they shall be returned immediately: |
| 1. | Where it is deemed upon examination of the kept materials or articles that they are not associated with the relevant investigation; |
| 2. | Where it is no longer necessary to keep the materials or articles as the purpose of the investigation, etc. has been achieved. |
| (9) | A public official who conducts an investigation under paragraph (2) shall present identification indicating his or her authority to relevant persons and shall issue a document stating the objectives, period, and methods of the investigation and other matters prescribed by Presidential Decree. |
| (10) | The parties, interested parties, or witnesses related to a disposition made under paragraph (1) or an investigation conducted under paragraph (2) may present or state their opinions. |
| Article 82 (Investigation Hours and Period) |
| (1) | When an investigative public official conducts an investigation under Articles 80 and 81, he or she shall conduct the investigation within regular office hours of a business entity or trade association subject to the investigation: Provided, That, where it is impossible to achieve the purpose of an investigation through an investigation within regular working hours due to concerns over destruction of evidence, etc., the investigation may be conducted even during off-duty hours in consultation with the investigated company. |
| (2) | An investigative official shall terminate investigations within the investigation period entered in a document referred to in Article 81 (9): Provided, That if a sufficient investigation to achieve the purpose of the investigation has not been conducted within the investigation period, such period may be extended to the extent of minimizing the burden on the business of the business entity or trade association subject to the investigation. |
| (3) | Where the investigation period is extended pursuant to the proviso of paragraph (2), a document specifying the extended investigation period shall be issued to the relevant business entity or trade association. |
| Article 83 (Rights to Seek Assistance in Investigations and Deliberations of Violations) |
A business entity or trade association or their executive officers and employees that undergo an investigation or deliberation by the Fair Trade Commission may have legal counsel, such as an attorney-at-law, participate in the investigation or deliberation or present opinions.
| Article 84 (Prohibition of Abusing Power to Conduct Investigations) |
Investigative public officials shall conduct investigations to the minimum extent necessary to enforce this Act and shall not abuse the power to conduct investigations for other purposes, etc.
| Article 85 (Requests for Postponement of Investigations) |
| (1) | Where a business entity or trade association that is subject to a disposition or an investigation by the Fair Trade Commission pursuant to Article 81 (1) through (3) finds it impracticable to implement the disposition or to undergo the investigation due to a force majeure event or other grounds prescribed by Presidential Decree, the business entity or trade association may request the Fair Trade Commission to postpone such disposition or investigation, as prescribed by Presidential Decree. |
| (2) | Upon receipt a request for postponement of a disposition or investigation under paragraph (1), the Fair Trade Commission may postpone the disposition or investigation by reviewing the grounds for such request, if the grounds are deemed reasonable. |
| Article 86 (Enforcement Fines) |
| (1) | If any business entity or trade association fails to comply with an order to submit a report, materials, or articles issued pursuant to Article 81 (1) 3 or (6), the Fair Trade Commission may issue the second order to submit the report, materials, or articles by the fixed deadline for enforcement, by the decision at a subcommittee meeting if such report, materials, or articles are deemed necessary to verify the violation of this Act; and may impose on a person who fails to comply with the second order an enforcement fine not exceeding 3/1,000 of the average daily sales prescribed by Presidential Decree per day from the date the deadline for enforcement passes: Provided, That an enforcement fine not exceeding two million won per day may be imposed from the date the deadline for enforcement passes where no sales have been made or it is impracticable to calculate the sales. |
| (2) | Article 16 (2) and (3) shall apply mutatis mutandis to the imposition, payment, collection, refund, etc. of enforcement fines. |
| Article 87 (Written Fact-Finding Surveys) |
| (1) | The Fair Trade Commission may conduct a written fact-finding survey on a particular business area and publish the results thereof in order to establish fair trade order in such business area. |
| (2) | Where the Fair Trade Commission intends to conduct a written fact-finding survey pursuant to paragraph (1), it shall establish a plan on the scopes of persons to be surveyed, survey period, survey details, survey methods, survey procedures, extent of publicizing the results of the survey, etc.; and may require the persons to be surveyed to submit materials necessary for the survey, such as actual condition of transactions. |
| (3) | Where the Fair Trade Commission requests the submission of materials pursuant to paragraph (2), it shall give persons to be surveyed written notice specifying the extent and details of materials to be submitted, reasons for requests, deadlines for submission, etc. |
| Article 88 (Recommendation for Correction of Violations) |
| (1) | In the event of a violation of this Act, the Fair Trade Commission may determine a correction scheme and recommend that the relevant business entity or trade association comply with the correction scheme. |
| (2) | A person who has received a recommendation pursuant to paragraph (1) shall notify the Fair Trade Commission as to whether to accept the recommendation within 10 days after the date of receiving the notice of recommendation for correction. |
| (3) | Where a person who has received a recommendation for correction pursuant to paragraph (1) accepts the recommendation, a corrective measure under this Act shall be deemed ordered. |
| Article 89 (Consent Decrees) |
| (1) | A business entity or trade association under investigation or deliberation by the Fair Trade Commission (hereafter in this Article through Article 91 referred to as "applicant") may apply to the Fair Trade Commission to adopt a consent decree as provided for in paragraph (3) for such purposes as voluntarily correcting anti-competition conditions, etc. arising from an act subject to the relevant investigation or deliberation (hereafter in this Article through Article 91 referred to as "relevant act"), remedying consumer damage, and improving trading practices: Provided, That in any of the following cases, the Fair Trade Commission shall proceed with deliberation procedures under this Act without adopting a consent decree: |
| 1. | Where the relevant act is a violation under Article 40 (1); |
| 2. | Where the relevant act meets the requirements for filing a criminal charge under Article 129 (2); |
| 3. | Where the applicant withdraws his or her application before a consent decree is adopted. |
| (2) | Where an applicant files an application under paragraph (1), the application shall be filed in writing, stating the following: |
| 1. | Facts that specify the relevant act; |
| 2. | A correction scheme necessary to restore competition practices or to improve trading practices, such as discontinuing the relevant act and restoring to the original state; |
| 3. | A correction scheme necessary to remedy or prevent damage to consumers, other business entities, etc. |
| (3) | Where the Fair Trade Commission determines, after having investigated the facts about the relevant act, that a correction scheme prescribed in paragraph (2) 2 and 3 (hereinafter referred to as "correction scheme") meets all the following requirements, the Commission may suspend deliberation procedures on the relevant act and adopt a resolution with the same intent as the correction scheme (hereinafter referred to as "consent decree"); in such cases, the Commission may amend the correction scheme after consultation with the applicant: |
| 1. | The correction scheme shall be balanced with corrective measures and other sanctions that are expected to be taken or imposed if the relevant act is recognized as a violation of this Act; |
| 2. | The correction scheme shall be deemed appropriate to restore fair and free competition practices or trading practices or to protect consumers, other business entities, etc. |
| (4) | No consent decree adopted by the Fair Trade Commission shall mean that the relevant act is recognized as a violation of this Act, and no person shall assert that the relevant act violates this Act on the grounds that the applicant is issued with a consent decree. |
| Article 90 (Procedures for Consent Decrees) |
| (1) | The Fair Trade Commission shall determine whether to commence the procedures for a consent decree, in overall consideration of the necessity of a prompt measure, the necessity of direct compensation for consumer damage, and other relevant matters. |
| (2) | The Fair Trade Commission shall provide interested parties, including a person who has filed a report, an opportunity to present their opinions either by giving notice of the following matters or by posting, etc. them in the Official Gazette or on its website for a fixed period of at least 30 days before adopting a consent decree: |
| 1. | Outline of the relevant act; |
| 2. | Provisions of the relevant statutes or regulations; |
| 3. | The correction scheme (or the correction scheme amended pursuant to the latter part, with the exception of the subparagraphs, of Article 89 (3)); |
| 4. | Other information that helps the understanding of interested parties including a person who has filed a report in relation to the relevant act: Provided, That information related to business secrete or privacy protection, or otherwise not suitable for public disclosure shall be excluded herefrom. |
| (3) | The Fair Trade Commission shall notify the heads of the relevant administrative agencies of the matters specified in the subparagraphs of paragraph (2) and seek their opinions: Provided, That it shall consult with the Prosecutor General for acts to which Articles 124 through 127 shall apply. |
| (4) | The Fair Trade Commission shall adopt or revoke a consent decree after deliberation and resolution at a meeting classified under Article 59. |
| (5) | An applicant issued with a consent decree shall submit its plan to implement the consent decree and the outcomes of implementation to the Fair Trade Commission in accordance with the resolution under paragraph (4). |
| (6) | The Fair Trade Commission may check whether the implementation plan submitted pursuant to paragraph (5) has been actually implemented, and may require an applicant issued with a consent decree to submit materials related to the implementation thereof. |
| (7) | The Fair Trade Commission may entrust the Mediation Agency or the Korea Consumer Agency under Article 33 of the Framework Act on Consumers (hereinafter referred to as the "Consumer Agency") with the affairs concerning the implementation management of a consent decree, such as checking whether the implementation plan has been actually implemented pursuant to paragraph (6), as prescribed by Presidential Decree. |
| (8) | The head of an agency entrusted with affairs under paragraph (7) shall report the current status of the implementation management with respect to the plan to implement the consent decree and the outcomes of implementation, which are submitted by the applicant pursuant to paragraph (5), to the Fair Trade Commission on a quarterly basis: Provided, That upon receipt of a request to report the current status by the Fair Trade Commission, the head shall immediately comply with such request. |
| (9) | Where the applicant issued with a consent decree neglects, or fails to comply with, the implementation, the head of an agency entrusted with affairs under paragraph (7) shall notify the Fair Trade Commission of such fact without delay. |
| (10) | Where an applicant applies for a consent decree under Article 89 (1), the running of the period under Article 80 (4) and (5) shall be suspended with respect to the relevant applicant and other parties who undergo deliberation on the same case: Provided, That the running of the remaining period shall resume from the time specified in any of the following: <Newly Inserted on Jun. 20, 2023> |
| 1. | When the applicant cancels his or her application for a consent decree; |
| 2. | When the Fair Trade Commission decides not to commence the procedures for a consent decree; |
| 3. | When the Fair Trade Commission decides not to adopt a consent decree; |
| 4. | When the implementation of a consent decree is completed; |
| 5. | When a consent decree is canceled. |
| (11) | The Fair Trade Commission may determine and publicly notify the methods of filing an application under Article 89 (2), the methods of seeking opinions, the procedures for deliberation and resolution, the procedures for entrusting affairs concerning the implementation management with the Mediation Agency or Consumer Agency, and other details. <Amended on Jun. 20, 2023> |
| Article 91 (Revocation of Consent Decrees) |
| (1) | The Fair Trade Commission may revoke a consent decree in any of the following cases: |
| 1. | Where a correction scheme becomes inappropriate due to significant changes in facts, such as market conditions that formed the basis for adopting the consent decree, or due to other relevant factors; |
| 2. | Where a consent decree has been adopted based on incomplete or inaccurate information provided by an applicant, or an applicant has been issued with a consent decree by fraud or other improper means; |
| 3. | Where an applicant fails to implement the consent decree without good cause. |
| (2) | After the Fair Trade Commission has revoked a consent decree pursuant to paragraph (1) 1, it may adopt a consent decree again if the applicant files an application for a consent decree pursuant to Article 89 (1). In such cases, Articles 89 through 92 shall apply. |
| (3) | Where the Fair Trade Commission revokes a consent decree pursuant to paragraph (1) 2 or 3, it may resume the deliberation procedures concerning the relevant act, which have been suspended pursuant to Article 89 (3). |
| Article 92 (Enforcement Fines) |
| (1) | The Fair Trade Commission may impose on a person who fails to implement a consent decree without good cause by the deadline for enforcement set at the time the consent decree is adopted, an enforcement fine not exceeding two million won per day from the date the deadline for enforcement passes, until the person implements the consent decree or the consent decree is revoked. |
| (2) | Article 16 (2) and (3) shall apply mutatis mutandis to the imposition, payment, collection, refund, etc. of enforcement fines. |
| Article 93 (Providing Opportunity to State Opinions) |
| (1) | The Fair Trade Commission shall provide relevant parties or interested parties with an opportunity to state their opinions before issuing an order to take a corrective measure or imposing a penalty surcharge against their violation of this Act. |
| (2) | Relevant parties or interested parties may attend meetings of the Fair Trade Commission to state their opinions or may submit necessary materials to the Fair Trade Commission. |
| Article 94 (Examination of Evidence in Deliberation Procedures) |
| (1) | The Fair Trade Commission may examine the relevant evidence, upon request of any relevant party or ex officio, if necessary to deliberate on the relevant case. |
| (2) | Where the chairperson of a plenary session or subcommittee meeting does not adopt a request for examination of evidence from any relevant party, the grounds therefor shall be notified to the party. |
| Article 95 (Requests for Inspection of Materials) |
A person prescribed by Presidential Decree, such as a party or a person who has filed a report, may request an inspection or a copy of materials related to a disposition made under this Act from the Fair Trade Commission. In such cases, the Fair Trade Commission shall comply with such request, except any of the following materials:
| 2. | Materials related to leniency applications, etc. under Article 44 (4); |
| 3. | Confidential materials under other statutes. |
| Article 96 (Filing Objections) |
| (1) | A person who is dissatisfied with a disposition under this Act may file an objection stating the grounds therefor to the Fair Trade Commission within 30 days after the date of receipt of the notice of the disposition. |
| (2) | The Fair Trade Commission shall render a decision on the objection raised pursuant to paragraph (1) within 60 days: Provided, That if it is impossible to render a decision within such period in extenuating circumstances, the period may be extended by up to 30 days. |
| Article 97 (Suspension of Enforcement of Corrective Measures) |
| (1) | Where a person to whom a corrective measure has been imposed under this Act files an objection under Article 96 (1), and it is deemed necessary to prevent irreparable damage that may occur as a result of the implementation of the corrective measure or continuation of the procedures, the Fair Trade Commission may, at the request of any party or ex officio, make a decision on the suspension of implementation of such measure or continuation of the procedures (hereinafter referred to as "suspension of enforcement"). <Amended on Jun. 20, 2023> |
| (2) | The Fair Trade Commission may, at the request of any party or ex officio, revoke a decision on the suspension of enforcement it has made, where the grounds for such suspension cease to exist. |
| Article 97-2 (Implementation Management of Corrective Measures) |
| (1) | The Fair Trade Commission may inspect whether a corrective measure under Article 7, 14, 37, 42, 49, or 52 is implemented and may request the relevant business entity or trade association to submit data relevant to the implementation thereof. |
| (2) | The Fair Trade Commission may entrust the Mediation Agency with the business affairs regarding the implementation management of corrective measures, such as checking whether the corrective measures referred to in paragraph (1) have been implemented, as prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 20, 2023]
| Article 98 (Service of Documents) |
| Articles 14 through 16 of the Administrative Procedures Act shall apply mutatis mutandis to service of documents. |
[This Article Wholly Amended on Feb. 6, 2024]
| Article 98-2 (Submission and Service of Documents through Electronic Data Processing System) |
| (1) | Parties and other persons prescribed by Presidential Decree (hereafter in this Article referred to as “parties, etc.”) may convert documents necessary for deliberation under this Act and other materials prescribed by Presidential Decree into electronic documents and submit them through an electronic data processing system designated and operated by the Fair Trade Commission (referring to an electronic device equipped with information processing capability by combining hardware, software, database, network, security elements, etc. that allow the preparation, submission, and delivery of electronic documents necessary for deliberation under this Act; hereinafter the same shall apply) through an information and communications network . |
| (2) | The electronic documents submitted pursuant to paragraph (1) shall be deemed to have been received with the details recorded in the electronic data processing system when the parties, etc. who have submitted such documents verify the acceptance number provided by the electronic data processing system through the information and communications network. |
| (3) | The Fair Trade Commission may serve a written resolution, a written decision, and other documents necessary for deliberation under this Act on the parties, etc. with an electronic data processing system and the information and communications network connected thereto: Provided, That this shall not apply where the parties, etc. do not consent thereto. |
| (4) | Where the Fair Trade Commission serves a document by the method referred to in paragraph (3), it shall enter the relevant document into the electronic data processing system and register it, and notify the parties, etc. of such registration by electronic mail or by other means prescribed by Presidential Decree. |
| (5) | A document served by the means referred to in paragraph (3) shall be deemed to have reached the parties, etc. with the contents recorded in the electronic data processing system when the parties, etc. confirm the electronic documents registered pursuant to paragraph (4): Provided, That when the document is not confirmed within two weeks (within seven days for documents other than a written resolution and written decision) from the date the fact of registration is notified pursuant to paragraph (4), such document shall be deemed to have reached the parties, etc. on the date two weeks have elapsed from the date the fact of registration is notified. |
| (6) | The period during which a person to whom service or notice is to be made cannot confirm electronic documents due to a failure in the electronic data processing system shall not be included in the period referred to in the proviso of paragraph (5). In such cases, the method of calculating the period during which electronic documents cannot be confirmed shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Feb. 6, 2024]
| Article 98-3 (Service of Documents on Designated Domestic Agents) |
| (2) | Notwithstanding the provisions regarding the service of documents under Articles 98 and 98-2 (3) through (6), a business entity or trade association that has its domicile, place of business, or office overseas shall designate its agent for the service of documents in the Republic of Korea. |
| (2) | Where a business entity or trade association obligated to designate an agent in the Republic of Korea pursuant to paragraph (1) fails to designate an agent in the Republic of Korea, Articles 98 and 98-2 (3) through (6) shall apply to the service of documents. |
[This Article Newly Inserted on Feb. 6, 2024]
| Article 99 (Filing Appeals) |
| (1) | A person who intends to file an appeal against a disposition under this Act shall file such appeal within 30 days after the date he or she receives the notice of the disposition or is served with an authentic copy of the written decision on his or her objection. |
| (2) | The period as specified in paragraph (1) shall be invariable. |
| Article 100 (Exclusive Jurisdiction over Appeals) |
The Seoul High Court shall have exclusive jurisdiction over any appeal filed pursuant to Article 99.
| Article 101 (Case Handling Procedures) |
The Fair Trade Commission shall determine and publicly notify necessary matters concerning the procedures, etc. for handling cases in violation of this Act.
CHAPTER XI IMPOSITION AND COLLECTION OF PENALTY SURCHARGES
| Article 102 (Imposition of Penalty Surcharges) |
| (1) | The Fair Trade Commission shall take into account the following matters in imposing a penalty surcharge pursuant to Article 8, 38, 43, 50, or 53: |
| 1. | The details and seriousness of the relevant violation; |
| 2. | The duration and frequency of the relevant violation. |
| 3. | The amount of benefits, etc. acquired by committing the relevant violation. |
| (2) | Where a business entity that is a company has violated this Act and ceases to exist due to a merger, the Fair Trade Commission may impose and collect a penalty surcharge on a company surviving the merger or established through the merger, deeming that the violation of the first-mentioned company has been committed by the second-mentioned company. |
| (3) | Where a business entity that is a company has violated this Act and is divided or merged after division, the Fair Trade Commission may impose and collect a penalty surcharge, deeming that the violation of the relevant company committed before the date of such division or merger after division has been committed by any of the following companies: |
| 1. | A company to be divided; |
| 2. | A new company established through the division or merger after division; |
| 3. | Another company that has merged with a part of a company to be divided and survives after such merger. |
| (4) | Where a business entity that is a company has violated this Act and establishes a new company pursuant to Article 215 of the Debtor Rehabilitation and Bankruptcy Act, the Fair Trade Commission may impose and collect a penalty surcharge, deeming that the violation has been committed either by the existing company or by the new company. |
| (5) | Criteria for imposing penalty surcharges under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 103 (Extension of Deadline for Paying Penalty Surcharges and Payment in Installments) |
| (1) | If the Fair Trade Commission deems it impracticable for a person on whom a penalty surcharge has been imposed (hereinafter referred to as "person liable to pay a penalty surcharge") to pay the penalty surcharge in a lump sum due to any of the following causes as the sum of the penalty surcharges exceeds the threshold amount prescribed by Presidential Decree, the Commission may extend a deadline for paying such penalty surcharge or permit the person to pay such penalty surcharge in installments; in such cases, security may be required, where necessary: |
| 1. | Where the person has sustained a substantial property loss due to disaster or theft, etc.; |
| 2. | Where the person’s business is at considerable risk due to worsening business conditions; |
| 3. | Where paying the penalty surcharge in a lump sum is expected to cause significant difficulties in the financial situation; |
| 4. | Where any ground equivalent to those specified in subparagraphs 1 through 3 exists. |
| (2) | Where a person liable to pay a penalty surcharge intends to apply for an extension of the deadline for paying the penalty surcharge or for payment in installments pursuant to paragraph (1), the person shall file an application with the Fair Trade Commission within 30 days after the date of he or she receives the notice to pay the penalty surcharge. |
| (3) | Where a person liable to pay a penalty surcharge who has been granted an extension of the deadline for paying the penalty surcharge or permitted to pay such penalty surcharge in installments under paragraph (1), falls under any of the following, the Fair Trade Commission may revoke the decision to grant an extension of the deadline for paying the penalty surcharge or to permit payment in installments and may collect such penalty surcharge in a lump sum: |
| 1. | Where the person fails to pay the penalty surcharge decided to be paid in installments by the deadline for payment; |
| 2. | Where the person fails to comply with the order of the Fair Trade Commission necessary for security change or other security preservation; |
| 3. | Where it is deemed impossible to collect the full or remaining amount of the penalty surcharge due to forced enforcement, commencement of an auction, declaration of bankruptcy, dissolution of a corporation, disposition on delinquent national or local taxes, etc.; |
| 4. | Where it is deemed possible for the person to pay the penalty surcharge in a lump sum as any cause specified in paragraph (1) has ceased. |
| (4) | Matters necessary for an extension of the deadline for paying a penalty surcharge or payment in installments, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
| Article 104 (Liability for Joint and Several Payment of Penalty Surcharges) |
| (1) | Where a business entity that is a company subject to a penalty surcharge is divided or merged after division (including where a business entity is divided or merged after division on the date a penalty surcharge is imposed), the following companies shall be liable to jointly and severally pay the penalty surcharge: |
| 1. | A company to be divided; |
| 2. | A company established through the division or merger after division; |
| 3. | Another company that has merged with a part of a company to be divided and survives after such merger. |
| (2) | Where a business entity that is a company subject to a penalty surcharge is dissolved due to division or merger after division (including where a company dissolves on the date a penalty surcharge is imposed), the following companies shall be liable to jointly and severally pay the penalty surcharge: |
| 1. | A company established through the division or merger after division; |
| 2. | Another company that has merged with a part of a company to be divided and survives after such merger. |
| Article 105 (Collection of Penalty Surcharges and Disposition on Delinquency) |
| (1) | Where a person liable to pay a penalty surcharge fails to pay it by the deadline for payment, the Fair Trade Commission shall collect an additional charges within 40/100 per annum for the period beginning on the date following the deadline for payment and ending on the date payment is made, taking into consideration the overdue interest rate of a bank under the Banking Act, as prescribed by Presidential Decree. In such cases, the period for which additional charges are required to be collected shall not exceed 60 months. |
| (2) | Where a person liable to pay a penalty surcharge fails to pay it by the deadline for payment, the Fair Trade Commission may demand the payment thereof within a specified period; and if the person fails to pay such penalty surcharge and additional charges under paragraph (1) within the specified period, it may collect the penalty surcharge and additional charges in the same manner as delinquent national taxes. |
| (3) | The Fair Trade Commission may entrust the Commissioner of the National Tax Service with the duties of collection of penalty surcharges and additional charges or disposition on delinquency under paragraphs (1) and (2), as prescribed by Presidential Decree. |
| (4) | The Fair Trade Commission may request the Commissioner of the National Tax Service to provide information on national taxation regarding persons who are in arrears of penalty surcharges, if deemed necessary to collect penalty surcharges in arrears. |
| (5) | Public officials in charge of penalty surcharges may request the heads of registry offices and other relevant administrative agencies to present required documents for inspection or copying, or to deliver their certified copies or certified extracts, free of charge, where necessary to collect penalty surcharges. |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for the collection of penalty surcharges shall be prescribed by Presidential Decree. |
| Article 106 (Additional Payment on Refund of Penalty Surcharges) |
Where the Fair Trade Commission refunds a penalty surcharge based on a ruling on an objection or a judgment of a court or for any other reason, the Commission shall make an additional payment on refund for the period beginning on the date the penalty surcharge is paid and ending on the date the refund is made, as prescribed by Presidential Decree: Provided, That where the imposition of a penalty surcharge is revoked by a judgment of a court and a penalty surcharge is newly imposed based on the grounds for the judgment, an additional payment on refund shall be calculated and made only for the amount of the penalty surcharge initially paid, less the penalty surcharge decided to be newly imposed.
| Article 107 (Disposition on Deficits) |
| (1) | Where any of the following is applicable to a person liable to pay a penalty surcharge, an administrative fine, or any other charge imposed under this Act (hereinafter referred to as "charge, etc."), the Fair Trade Commission may make a disposition on deficits: |
| 1. | Where the amount appropriated for the amount in arrears after the disposition on delinquency falls short of the amount in arrears; |
| 2. | Where extinctive prescription of the right to collect a charge, etc. is completed; |
| 3. | Where it is ascertained that the whereabouts of a person in arrears is unknown or a person in arrears has no property; |
| 4. | Where it is confirmed that there would be no remainder after the estimated value of the property subject to disposition on delinquency is appropriated for expenses for disposition on delinquency; |
| 5. | Where it is confirmed that there would be no remainder after the estimated value of the property subject to disposition on delinquency is appropriated to pay national taxes, local taxes, claims, etc. secured by a right to lease on a deposit basis, a pledge right, or mortgage, which have preference over a charge, etc.; |
| 6. | Where it is unlikely to collect a charge, etc. for reasons prescribed by Presidential Decree. |
| (2) | To make a disposition on deficits pursuant to paragraph (1), a relevant agency, such as a local administrative agency, shall be inquired of the whereabouts of a person in arrears or of whether such person has any property, and the result shall be confirmed. |
| (3) | Where a disposition on deficits is made on any ground specified in paragraph (1) 4 or 5, the disposition on delinquency shall be suspended and the seizure of the relevant property shall be released. |
| (4) | Upon discovering seizable property after having made a disposition on deficits pursuant to paragraph (1), the Fair Trade Commission shall without delay revoke such disposition and make a disposition on delinquency: Provided, That this shall not apply in the case of paragraph (1) 2. |
CHAPTER XII REQUESTS FOR PROHIBITION AND COMPENSATION
| Article 108 (Requests for Prohibition) |
| (1) | A person who has suffered or is likely to suffer damage from a violation of Article 45 (1) (excluding subparagraph 9) and Article 51 (1) 4 (limited to the provisions related to unfair trade practices under Article 45 (1) (excluding subparagraph 9)) may request for the prohibition or prevention of infringing acts against a business entity or trade association that has committed or is likely to commit the violation. |
| (2) | A lawsuit requesting prohibition under paragraph (1) may be also filed with, in addition to a district court having jurisdiction under the Civil Procedure Act, another district court in the area where a High Court which has jurisdiction over the location of the relevant district court is located. |
| (3) | If a court deems it necessary to protect the interests of a defendant when a lawsuit requesting prohibition is filed pursuant to paragraph (1), it may order the plaintiff to provide a reasonable security at the request of the defendant or ex officio. |
| Article 109 (Liability for Compensation) |
| (1) | Where a person sustains damage because a business entity or trade association violates this Act, the business entity or trade association shall be liable to compensate for the damage: Provided, That this shall not apply where the business entity or trade association verifies that the damage was caused neither by intention nor by negligence. |
| (2) | Notwithstanding paragraph (1), where a person sustains damage because a business entity or trade association violates Article 40, 48 or 51 (1) 1, the business entity or trade association shall be liable to compensate for the damage to the extent not exceeding three times the damage caused to the person: Provided, That where the business entity or trade association verifies that the damage was caused neither by intention nor by negligence, such business entity or trade association shall not be liable to compensate for the damage; and where the business entity falls under any subparagraph of Article 44 (1), the amount of compensation shall not exceed the damage caused to the person who has been damaged by the violation of Article 40 committed by the relevant business entity. |
| (3) | In determining the amount of compensation under paragraph (2), a court shall take into consideration the following: |
| 1. | The degree of awareness of intent or likelihood of occurrence of damage; |
| 2. | The severity of the damage caused by the relevant violation; |
| 3. | Economic benefits that the relevant business entity or trade association acquired by committing the relevant violation; |
| 4. | Fines and penalty surcharges against the relevant violation; |
| 5. | The duration, frequency, etc. of the relevant violation; |
| 6. | The financial status of the relevant business entity; |
| 7. | The degree of the efforts made by the relevant business entity or trade association to remedy the damage. |
| (4) | Where a business entity specified in any subparagraph of Article 44 (1) bears the liability for compensation under paragraph (2), the entity shall be held liable as a joint tort-feasor under Article 760 of the Civil Act to the extent not exceeding the damage caused to a person who has been damaged by a joint violation of Article 40 committed by the relevant business entity and another business entity. |
| Article 110 (Sending Records) |
Where a lawsuit has been filed seeking compensation for damage pursuant to Article 109, a court may, if necessary, require the Fair Trade Commission to send records on the relevant case (including reports on examination of interested persons in the case, persons for reference, or appraisers, stenographic records, and all judicial evidence).
| Article 111 (Submission of Materials) |
| (1) | A court may order the other party to submit materials necessary to verify the relevant damage or to compute the amount of damages (excluding materials related to leniency applications, etc. under Article 44 (4)), at the request of the party, in a lawsuit for damages caused by a violation of Article 40 (1), 45 (1) (excluding subparagraph 9), or 51 (1) 1: Provided, That this shall not apply where a person who possesses such materials has a reasonable ground for refusing to submit them. |
| (2) | Where the person who possesses the materials claims that there is a reasonable ground for refusing to submit them under paragraph (1), the court may order the presentation of the materials in order to determine whether the claim is appropriate. In such cases, the court shall not allow other persons to inspect such materials. |
| (3) | Where the materials that shall be submitted pursuant to paragraph (1) fall under a trade secret but they are absolutely necessary for verifying the damage or for computing the amount of damages, no reasonable ground under the proviso of paragraph (1) shall be deemed to exist. In such cases, the court shall designate the scope in which an inspection is allowed or a person for whom an inspection is allowed within the purpose of the submission order. |
| (4) | Where the party fails to comply with the submission order without a reasonable ground, the court may deem that the claim of the other party on the description of materials is true. |
| (5) | In the case of paragraph (4), where the party who has requested the submission of materials is in a considerably difficult situation to make a detailed assertion on the description of materials and it is also impractical to expect that other evidence would verify the facts to be proved by the materials, the court may deem that the claim of the party on the facts which he or she intends to verify through the description of the materials is true. |
| Article 112 (Confidentiality Orders) |
| (1) | Where all of the following reasons with respect to a trade secret held by the party in a lawsuit for damages filed pursuant to Article 109 are explained, a court may order the other party (referring to its representative in cases of a corporation), a person representing the party for the lawsuit, and other persons who have become aware of the trade secret in the course of the lawsuit, not to use the trade secret for any purpose other than the continuance of the relevant lawsuit proceedings or not to disclose the trade secret to anyone other than a person who has been issued with an order under this paragraph relating to the trade secret: Provided, That this shall not apply where the other party (referring to its representative in cases of a corporation), a person representing the party for the lawsuit, and other persons who have become aware of the trade secret in the course of the lawsuit have already acquired the trade secret by means other than the perusal of the preliminary documents or the examination of evidence under subparagraph 1: |
| 1. | The trade secret is contained in preliminary documents already submitted or to be submitted, evidence already examined or to be examined, or materials submitted or to be submitted pursuant to Article 111 (1); |
| 2. | The trade secret referred to in subparagraph 1 is likely to hinder the party's business operations, if used or disclosed for any purpose other than the continuance of the relevant lawsuit proceedings, and thus the use or disclosure of such trade secret needs to be restricted to prevent such hindrance. |
| (2) | In order to apply for an order under paragraph (1) (hereinafter referred to as "confidentiality order"), the party shall do so in writing, stating the following: |
| 1. | The person to whom a confidentiality order shall be issued; |
| 2. | The facts sufficient for specifying the trade secret to be protected by a confidentiality order; |
| 3. | The facts relevant to the grounds under the subparagraphs of paragraph (1). |
| (3) | When a court decides to issue a confidentiality order, it shall serve a written decision on the person to whom the order is to be issued. |
| (4) | A confidentiality order shall take effect when the written decision under paragraph (3) is served on the person to whom the order is issued. |
| (5) | An immediate appeal may be filed against a decision to dismiss with or without prejudice a request for a confidentiality order. |
| Article 113 (Revocation of Confidentiality Orders) |
| (1) | Where a person who has made a request for issuing a confidentiality order or a person who has been issued with a confidentiality order fails to or ceases to satisfy requirements under Article 112 (1), he or she may request the revocation of the confidentiality order from a court that keeps the lawsuit records (where there is no court that keeps the lawsuit records, referring to a court which has issued a confidentiality order). |
| (2) | When a court makes a decision on a request to revoke a confidentiality order, it shall serve a written decision on the applicant for request and the other party. |
| (3) | An immediate complaint may be raised against a decision on revocation of a confidentiality order. |
| (4) | A decision to revoke a confidentiality order shall take effect when it becomes final and conclusive. |
| (5) | When a court decides to revoke a confidentiality order, it shall immediately notify a person to whom a confidentiality order of the relevant trade secret was issued, if any, of the fact that a decision is made to revoke the confidentiality order, in addition to the applicant for request to revoke the confidentiality order and the other party. |
| Article 114 (Notification of Request for Perusal of Lawsuit Records) |
| (1) | Where a decision under Article 163 (1) of the Civil Procedure Act has been rendered for lawsuit records concerning lawsuit proceedings for which a confidentiality order had been issued (excluding lawsuit proceedings for which any and all confidentiality orders have been revoked), and the party has made a request for perusal, etc. of confidential records prescribed in that paragraph but the procedures for such request have been followed by a person not subject to a confidentiality order in the lawsuit at issue; a court official of Grade IV, V, VI, or VII (hereafter in this Article referred to as "court official of Grade V, etc.") shall notify the party who has made a request under that paragraph (excluding a person who has made the aforementioned request for perusal, etc.; hereafter in paragraph (3), the same shall apply) of the fact that the request for perusal, etc. was made immediately after the request. |
| (2) | No court official of Grade V, etc. shall allow a person who has followed the procedures for the request for perusal, etc. to peruse the confidential records under paragraph (1) until two weeks have elapsed from the date the request under paragraph (1) was made (referring to the time when a judgment on the request becomes final and conclusive, if a request for issuing a confidentiality order to a person who has followed the request procedures is made within the period). |
| (3) | Paragraph (2) shall not apply where all the parties who have filed a request under Article 163 (1) of the Civil Procedure Act give their consent to permitting a person who has made a request for perusal, etc. under paragraph (1) to peruse, etc. the confidential records under paragraph (1). |
| Article 115 (Recognition of Damages) |
Where it is recognized that damage has been caused by a violation of this Act, but it is extremely impracticable to verify the fact necessary to substantiate the amount of such damage in light of the character of such fact, a court may recognize a reasonable amount of damage based on the gist of entire arguments and the results of examination of evidence.
| Article 116 (Legitimate Acts under Statutes or Regulations) |
This Act shall not apply to any legitimate act done by a business entity or trade association in accordance with other statutes.
| Article 117 (Exercising Intangible Property Rights) |
| Article 118 (Acts of Specified Associations) |
This Act shall not apply to any act done by an association established upon satisfying the following requirements (including a federation of associations): Provided, That this shall not apply to unfair trade practices or price increases by unfairly restricting competition:
| 1. | The association shall aim at mutual aid of small business entities or consumers; |
| 2. | The association shall be established voluntarily, and its members may join and withdraw voluntarily; |
| 3. | Each member shall have an equal voting right; |
| 4. | Where profits are distributed to members, the limit thereof shall be determined by the articles of association. |
CHAPTER ⅩⅣ SUPPLEMENTARY PROVISIONS
| Article 119 (Duty of Confidentiality) |
None of the following persons shall divulge any confidential information of a business entity or a trade association that he or she has learned in the course of performing his or her duties or use it for purposes other than the purpose of enforcing this Act: <Amended on Jun. 20, 2023>
| 1. | A commissioner or public official who performs or has performed duties under this Act; |
| 2. | A person who is or was in charge of the business affairs regarding dispute mediation under Articles 73 through 77, 77-2, 78, and 79; |
| 3. | A person who is or was in charge of the business affairs regarding the implementation management of consent decrees under Article 90; |
| 4. | A person who is or was in charge of the business affairs regarding the implementation management of corrective measures under Article 97-2. |
| Article 120 (Consultation on Enactment of Anti-Competitive Statutes) |
| (1) | Where the head of the relevant administrative agency intends to enact or amend statutes or regulations containing anti-competitive provisions, such as the determination of prices and terms and conditions of transactions of business entities, restrictions on market entry or business activities, illegal cartel conduct, or prohibited acts for trade associations, or intends to grant approval or make other dispositions, containing anti-competitive provisions, to a business entity or trade association, the head shall seek prior consultation with the Fair Trade Commission. |
| (2) | The head of the relevant administrative agency shall give prior notice to the Fair Trade Commission in order to enact or amend established rules or public notice, etc. containing anti-competitive provisions. |
| (3) | Upon granting approval or making other dispositions, containing anti-competitive provisions pursuant to paragraph (1), the head of the relevant administrative agency shall give notice to the Fair Trade Commission about the details of the relevant approval or other dispositions. |
| (4) | Where the Fair Trade Commission receives notice given pursuant to paragraph (2) and it is recognized that anti-competitive provisions are contained in established rules or public notice, etc. to be enacted or amended, the Fair Trade Commission may present its opinion to the head of the relevant administrative agency as to the rectification of the relevant anti-competitive provisions. |
| (5) | Where it is recognized that anti-competitive provisions are contained in statues or regulations enacted or amended without consultation under paragraph (1), established rules or public notice, etc. enacted or amended without notice, or approval or other dispositions granted or made without notice; the Fair Trade Commission may present its opinion to the head of the relevant administrative agency as to the rectification of the relevant anti-competitive provisions. |
| Article 120-2 (Dissemination of Fair Trade Compliance Culture) |
| (1) | The Fair Trade Commission may adopt and implement policy measures to disseminate a fair trade compliance culture in an effort to promote competition. |
| (2) | With respect to a business entity that operates an internal compliance program to autonomously comply with the statutes and regulations under the jurisdiction of the Fair Trade Commission (hereinafter referred to as "fair trade compliance program"), the Commission may conduct an evaluation of the operational status of such program (hereinafter referred to as "evaluation of fair trade compliance"). |
| (3) | A business entity that intends to undergo an evaluation of fair trade compliance shall file an application with the Fair Trade Commission, as prescribed by Presidential Decree. |
| (4) | In order to invigorate fair trade compliance programs, the Fair Trade Commission may take corrective measures, reduce or exempt penalty surcharges, give a prize, or provide support to business entities that undergo an evaluation of fair trade compliance, based on the results of evaluation, etc., as prescribed by Presidential Decree. |
| (5) | The Fair Trade Commission may require business entities that apply for evaluation of fair trade compliance to bear expenses incurred in conducting such evaluation, as prescribed by Presidential Decree. |
| (6) | Matters necessary for the standards and procedures, etc. for evaluation of fair trade compliance under paragraphs (1) through (5) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 20, 2023]
| Article 120-3 (Designation of Compliance Evaluation Agency) |
| (1) | The Fair Trade Commission may designate an agency or organization that has expertise in fair trade as a compliance evaluation agency (hereinafter referred to as "evaluation agency") to perform business affairs related to the evaluation of fair trade compliance (hereinafter referred to as "evaluation affairs"), as prescribed by Presidential Decree. |
| (2) | Where an evaluation agency falls under any of the following, the Fair Trade Commission may revoke its designation or order the suspension of business for a specified period not exceeding one year: Provided, That in the case of subparagraph 1 or 5, the Fair Trade Commission shall revoke its designation: |
| 1. | Where it obtains designation by fraud or other improper means; |
| 2. | Where it performs evaluation affairs during the period of business suspension, in violation of an order of business suspension; |
| 3. | Where it violates the standards and procedures for the evaluation of fair trade compliance under Article 120-2 (6) by intent or gross negligence; |
| 4. | Where it refuses to perform evaluation affairs without good cause; |
| 5. | Where it goes bankrupt or discontinues its business; |
| 6. | Where it is impractical for it to perform evaluation affairs due to its business suspension or bankruptcy. |
[This Article Newly Inserted on Jun. 20, 2023]
| Article 121 (Cooperation from Heads of Relevant Agencies) |
| (1) | The Fair Trade Commission may seek opinions from the heads of the relevant administrative agencies or other institutions or organizations, if deemed necessary to enforce this Act. |
| (2) | The Fair Trade Commission may entrust the heads of the relevant administrative agencies or other institutions or organizations with any necessary survey or may request necessary materials, if deemed necessary to enforce this Act. |
| (3) | The Fair Trade Commission may request necessary cooperation from the heads of the relevant administrative agencies or other institutions and organizations, if deemed necessary to ensure the implementation of corrective measures under this Act. |
| Article 122 (Delegation and Entrustment of Authority) |
The Fair Trade Commission may delegate part of its authority under this Act to the head of an agency under its control, the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Special Self-Governing City Mayor, a Do Governor, or a Special Self-Governing Province Governor or may entrust such authority to the head of any other administrative agency, as prescribed by Presidential Decree.
| Article 123 (Legal Fiction as Public Officials for Purposes of Applying Penalty Provisions) |
| (1) | A commissioner of the Fair Trade Commission who is not a public official shall be deemed a public official for purposes of applying penalty provisions under the Criminal Act or other statutes. |
| 1. | A person who is or was in charge of the business affairs regarding dispute mediation under Articles 73 through 77, 77-2, 78, and 79; |
| 2. | A person who is or was in charge of the business affairs regarding the implementation management of consent decrees under Article 90; |
| 3. | A person who is or was in charge of the business affairs regarding the implementation management of corrective measures under Article 97-2. |
CHAPTER XV PENALTY PROVISIONS
| Article 124 (Penalty Provisions) |
| (1) | Any of the following persons shall be punished by imprisonment with labor for up to three years or by a fine not exceeding 200 million won: |
| 1. | A person who engages in abusive practices in violation of Article 5; |
| 2. | A person who commits an act of circumventing law in violation of Article 13 or 36; |
| 3. | A person who exercises his or her voting right in violation of Article 15, 23, 25, or 39; |
| 4. | A person who violates Article 18 (2) through (5); |
| 5. | A person who establishes a holding company or converts his or her company to a holding company in violation of Article 19; |
| 7. | A person who has acquired or owned shares in violation of Article 21 or 22; |
| 8. | A person who has provided a debt guarantee in violation of Article 24; |
| 9. | A person who engages in illegal cartel conduct in violation of Article 40 (1) or a person who causes such conduct; |
| 10. | A person who violates Article 45 (1) 9 or 47 (1) or (4); |
| 12. | A person who commits a prohibited act for a trade association in violation of Article 51 (1) 1; |
| 13. | A person who refuses, interferes with, or evades an investigation conducted under Article 81 (2) through verbal abuse or assault or by intentionally blocking or delaying, etc. access to the site. |
| (2) | Imprisonment with labor and a fine under paragraph (1) may be imposed concurrently. |
| Article 125 (Penalty Provisions) |
Any of the following persons shall be punished by imprisonment with labor for up to two years or by a fine not exceeding 150 million won:
| 1. | A person who fails to comply with corrective measures under Article 7 (1), 14 (1), 37 (1), 42 (1), 49 (1), or 52 (1); |
| 2. | A person who refuses to submit materials without good cause or submits false materials, upon receipt of a request to submit materials under Article 31 (4); |
| 3. | A person who fails to undergo an audit by a certified public accountant in violation of Article 31 (5); |
| 4. | A person who engages in unfair trade practices in violation of Article 45 (1) (excluding subparagraphs 1, 2, 3, 7, and 9); |
| 5. | A person who commits a prohibited act for a trade association in violation of Article 51 (1) 3; |
| 6. | A person who fails to submit a report or necessary materials or articles under Article 81 (1) 3 or (6), or who submits a false report or false materials or articles; |
| 7. | A person who rejects, interferes with, or evades an investigation by concealing, discarding, or refusing access to, materials, or by forging or falsifying, etc. materials during an investigation conducted pursuant to Article 81 (2). |
| Article 126 (Penalty Provisions) |
Any of the following persons shall be punished by a fine not exceeding 100 million won:
| 1. | A person who fails to file a report on the establishment of, or conversion into, a holding company or files a false report thereon in violation of Article 17; |
| 2. | A person who fails to submit a report on the business details of the relevant holding company, etc. or submits a false report thereon in violation of Article 18 (7); |
| 3. | A person who fails to file a report on the current status of shareholdings or the current status of debt guarantees or files a false report thereon in violation of Article 30 (1) and (2); |
| 4. | An appraiser under Article 81 (1) 2 who gives a false appraisal. |
| Article 127 (Penalty Provisions) |
| (1) | A person who violates a confidentiality order under Article 112 (1) inside or outside Korea without good cause shall be punished by imprisonment with labor for up to two years or by a fine not exceeding 20 million won. |
| (2) | No prosecution shall be initiated for a violation prescribed in paragraph (1) unless a criminal charge is filed by a person who has made a request for issuing a confidentiality order. |
| (3) | A person who violates Article 119 shall be punished by imprisonment with labor for up to two years or by a fine not exceeding two million won. |
| Article 128 (Joint Penalty Provisions) |
If the representative of a corporation (including an unincorporated organization; hereafter in this Article, the same shall apply) or an agent or employee of, or any other person employed by, the corporation or an individual commits any violation specified in Articles 124 through 126 in conducting the business affairs of the corporation or individual, the corporation or individual shall be punished by a fine prescribed in the relevant Article in addition to punishing the violator accordingly: Provided, That this shall not apply where such corporation or individual has not been negligent in giving due attention and supervision concerning the business affairs to prevent such violation.
| Article 129 (Criminal Charges) |
| (1) | Prosecution for a violation specified in Article 124 or 125 may be initiated only if the Fair Trade Commission files a criminal charge. |
| (2) | Where it is deemed that a violation specified in Article 124 or 125 substantially hinders competition as the gravity of such violation is objectively obvious and serious, The Fair Trade Commission shall file a criminal charge with the Prosecutor General. |
| (3) | The Prosecutor General may notify the Fair Trade Commission of the existence of facts satisfying the requirements for filing criminal charges under paragraph (2) and may request the Fair Trade Commission to file a criminal charge. |
| (4) | Even if the Fair Trade Commission concludes that a case does not satisfy the requirements for filing criminal charges under paragraph (2), the Chairperson of the Board of Audit and Inspection of Korea, the Minister of SMEs and Startups, and the Administrator of the Public Procurement Service may request the Fair Trade Commission to file a criminal charge for other reasons, such as far-reaching social effects, influence on the national finance, and the extent of the damage to small and medium enterprises. |
| (5) | Upon receipt of a request for filing a criminal charge under paragraph (3) or (4), the Fair Trade Commission shall file a criminal charge with the Prosecutor General. |
| (6) | The Fair Trade Commission may not withdraw a criminal charge after a prosecution has been initiated. |
| Article 130 (Administrative Fines) |
| (1) | A business entity, a trade association, the same person who controls a member company of a business group subject to disclosure, or a public interest corporation which is a related party to the same person shall be subject to an administrative fine not exceeding 100 million won, if falling under any of the following; and an executive officer, an employee, or any other interested party of a company, a trade association, or a public interest corporation shall be subject to an administrative fine not exceeding 10 million won, if falling under any of the following: |
| 1. | A person who fails to file a report on a business combination under Article 11 (1), (2), or (6), a person who files a false report, or a person who violates paragraph (8) of that Article; |
| 2. | A person who engages in financial business or insurance business in violation of Article 20 (3) 2 or 3; |
| 3. | A person who fails to submit a report under Article 20 (4) or (5), or a person who omits material facts or submits a false report; |
| 4. | In making a disclosure pursuant to Articles 26 through 29, a person who fails to undergo a resolution by the board of directors or fails to make a disclosure, or a person who omits material facts or makes a disclosure containing false information; |
| 5. | A person who fails to submit materials without good cause or submits false materials, upon receipt of a request to submit materials under Article 32 (3); |
| 6. | A person who fails to appear without good cause in violation of Article 81 (1) 1; |
| 7. | A person who fails to submit materials without good cause or submits false materials, upon receipt of a request to submit materials under Article 87 (2). |
| (2) | A person who fails to comply with an order to maintain order in violation of Article 66 shall be subject to an administrative fine not exceeding one million won. |
| (3) | Administrative fines under paragraph (1) or (2) shall be imposed and collected by the Fair Trade Commission, as prescribed by Presidential Decree. In such cases, administrative fines under paragraph (1) 4 may be exempted by the Fair Trade Commission in accordance with the standards prescribed by Presidential Decree in consideration of whether correction has been made, the level of violation, the motive for violation, the results of violation, etc. <Amended on Feb. 6, 2024> |
| (4) | Article 102 (2) through (4) shall apply mutatis mutandis to the imposition and collection of administrative fines under paragraph (1) or (2). In such cases, "penalty surcharge" shall be construed as "administrative fine". |
ADDENDA <Act No. 17799, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation: Provided, That the amended provisions of Article 25 (2) shall enter into force two years after the date of the promulgation. Article 2 (Applicability to Reporting on Business Combinations)
The amended provisions of Article 11 (2) shall apply from the starting date of the business combination report on or after the date this Act enters into force. Article 3 (Applicability to Limitations on Voting Rights for Existing Circular Shareholding)
The amended provisions of Article 23 shall begin to apply where a business group is designated as a business group subject to limitations on cross shareholding and notified thereof on or after the date this Act enters into force. Article 4 (Applicability to Designation of Business Groups Subject to Limitations on Cross Shareholding)
The amended provisions of Article 31 (1) shall begin to apply where a business group subject to limitations on cross shareholding is designated in the year following the year the Korea Bank under the Bank of Korea Act publishes that the amount of gross domestic production exceeds 2,000 trillion won on or after the date this Act enters into force. Article 5 (Applicability to Request for Dispute Mediation)
The amended provisions of Article 77 (3) 4 shall begin to apply to a request for dispute mediation filed on or after the date this Act enters into force. Article 6 (Applicability to Submission of Materials and Confidentiality Order in Lawsuit for Damages)
The amended provisions of Articles 111 through 114 shall begin to apply to a lawsuit for seeking compensation for damage filed on or after the date this Act enters into force. Article 7 (Special Cases concerning Restrictions on Voting Rights Held by Public Interest Corporations)
"15/100" in the amended provisions of the latter part, with the exception of the items, of Article 25 (2) 2, with respect to the ratio of shares, over which a public interest corporation that is a related party to the same person who controls a member company of a business group subject to limitations on cross shareholding may exercise voting rights, shall be deemed a ratio under the relevant subparagraph for the period classified as follows: | 1. | By December 31, 2023: 30/100; |
| 2. | From January 1, 2024 to December 31, 2024: 25/100; |
| 3. | From January 1, 2025 to December 31, 2025: 20/100. |
Article 8 (Retroactive Application)
The amended provisions of subparagraph 10 of Article 2 shall apply retroactively from July 1, 2017. Article 9 (General Transitional Measures)
Decisions, dispositions, procedures, and other acts under the previous Monopoly Regulation and Fair Trade Act as at the time this Act enters into force shall be deemed to have been made, followed, or conducted in accordance with the provisions of this Act. Article 10 (Transitional Measures concerning Imposition of Penalty Surcharges)
Notwithstanding the amended provisions of Articles 8, 38, 43, 50, and 53, the previous provisions shall apply to the imposition of penalty surcharges for acts committed before this Act enters into force. Article 11 (Transitional Measures concerning Restrictions on Acts of Holding Companies)
| (1) | Notwithstanding the amended provisions of Article 18 (2) 2, the previous provisions shall apply to an act of owning shares of a subsidiary that was controlled before this Act enters into force (hereinafter referred to as "former subsidiary") by a holding company that has been incorporated as, or converted into, a holding company and filed a report thereon under the previous provisions before this Act enters into force (hereinafter referred to as "former holding company"). |
| (2) | Notwithstanding the amended provisions of Article 18 (3) 1, the previous provisions shall apply to an act of owning shares of a second-tier subsidiary that a former subsidiary controlled before this Act enters into force (hereinafter referred to as "former second-tier subsidiary"). |
| (3) | Notwithstanding the amended provisions of Article 18 (2) 2 and (3) 1, the previous provisions shall apply where a former subsidiary, a former second-tier subsidiary, or a third-tier subsidiary that a former second-tier subsidiary controlled before this Act enters into force (hereinafter referred to as "former third-tier subsidiary") merges with each other (including a merger after division; hereafter in this paragraph, the same shall apply) on or after the date this Act enters into force to continue after the merger; or the company established by the merger becomes a subsidiary or a second-tier subsidiary of the former holding company. |
| (4) | Notwithstanding the amended provisions of Article 18 (2) 2 and (3) 1, the previous provisions shall apply where a former subsidiary or a former second-tier subsidiary is divided on or after the date this Act enters into force, if the company established by division becomes a subsidiary or a second-tier subsidiary of the former holding company. |
Article 12 (Transitional Measures concerning Prohibition of Circular Shareholding)
| (1) | Notwithstanding the amended provisions of Article 9-2 of the Monopoly Regulation and Fair Trade Act (Act No. 12334), the previous provisions (referring to the provisions before partially amended by the Monopoly Regulation and Fair Trade Act (Act No. 12334); hereafter in this Article, the same shall apply) shall apply to the prohibition of circular shareholding in relation to shares acquired or owned before July 25, 2014 by a member company of a business group designated as a business group subject to limitations on cross shareholding as at the time of July 25, 2014. |
| (2) | Notwithstanding the amended provisions of Article 9-2 of the Monopoly Regulation and Fair Trade Act (Act No. 12334), the previous provisions shall apply to the prohibition of circular shareholding in relation to shares that a member company of a business group designated as a business group subject to limitations on cross shareholding on or after July 25, 2014 acquired or owned before the date of the designation. |
Article 13 (Transitional Measures concerning Designation of Business Groups Subject to Limitations on Cross Shareholding)
A business group designated as a group of large-scale enterprises or a group of large-scale enterprises subject to limitations on debt guarantees under the previous provisions of Article 14 (1) as of April 1, 2002 (referring to the provisions before partially amended by the Monopoly Regulation and Fair Trade Act (Act No. 6651)) shall be deemed designated as a business group subject to limitations on cross shareholding, etc. pursuant to the amended provisions of Article 14 (1) of the Monopoly Regulation and Fair Trade Act (Act No. 6651). Article 14 (Transitional Measures concerning Penalty Provisions for Refusal of Requests for Materials for Designating Business Groups)
Article 15 (Transitional Measures concerning Presumption of Agreement on Illegal Cartel Conduct)
| (1) | Notwithstanding the amended provisions of Article 40 (1) 9, the previous provisions shall apply to acts terminated before this Act enters into force. |
| (2) | Notwithstanding the amended provisions of Article 40 (5), the previous provisions shall apply to the presumption of illegal cartel conduct with respect to acts under the subparagraphs of previous Article 19 (1) terminated before this Act enters into force. |
Article 16 (Transitional Measures concerning Prohibition of Practices of Resale Price Maintenance)
Notwithstanding the amended provisions of Article 46, the previous provisions shall apply to practices of resale price maintenance terminated before this Act enters into force. Article 17 (Transitional Measures concerning Prohibition of Provision of Undue Benefits to Related Parties)
| (1) | Notwithstanding the amended provisions of Article 47, the previous provisions shall apply to prohibition of provision of undue benefits to related parties, etc. through acts committed before this Act enters into force. |
| (2) | Notwithstanding the amended provisions of Article 47, the previous provisions shall apply to the prohibition of provision of undue benefits to related parties, etc. through acts pending as at the time this Act enters into force, for one year from the date this Act enters into force. |
Article 18 (Transitional Measures concerning Prohibition of Unfair Trade Practices and Provision of Undue Benefits to Related Parties)
| (1) | Notwithstanding the amended provisions of the Monopoly Regulation and Fair Trade Act (Act No. 12095), the previous provisions (referring to the provisions before partially amended by the Monopoly Regulation and Fair Trade Act (Act No. 12095); hereafter in this Article, the same shall apply) shall apply to the prohibition of unfair trade practices and provision of undue benefits to related parties, etc. through acts committed before February 14, 2014. |
| (2) | The previous provisions shall apply to the prohibition of unfair trade practices and provision of undue benefits to related parties, etc. through acts pending as of February 14, 2014, for one year from February 14, 2014. |
Article 19 (Transitional Measures concerning Imposition of Penalty Surcharges against Trade Associations for Violation of Prohibited Acts)
Article 20 (Transitional Measures concerning Entrustment of Implementation Management)
Article 21 (Transitional Measures concerning Requests for Dispute Mediation by the Fair Trade Commission)
Article 22 (Transitional Measures concerning Prescription of Dispositions)
Article 23 (Transitional Measures concerning Compensation for Damage)
Article 24 (Transitional Measures concerning Recovery of Monetary Awards)
| (1) | The previous provisions shall apply to recovery of monetary awards granted before this Act enters into force. |
Article 25 Omitted.
Article 26 (Relationship to Other Statutes)
A citation of the previous Monopoly Regulation and Fair Trade Act or any provision thereof by other statutes or regulations as at the time this Act enters into force shall be deemed a citation of this Act or the relevant provision hereof, if any.
ADDENDA <Act No. 18661, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 19504, Jun. 20, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 19510, Jun. 20, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 97 (1) shall enter into force on the date of the promulgation, and those of Articles 120-2 and 120-3 shall enter into force one year after the date of the promulgation. Article 2 (Applicability to Measures for Preventing Illegal Cartel Conduct in Relation to Bidding in Public Sector)
The amended provisions of Article 41 shall begin to apply to tenders publicly announced or notified after this Act enters into force. Article 3 (Applicability to Suspension of Litigation Procedures or Mediation Process)
The amended provisions of Article 77-2 shall begin to apply where a request for mediation is filed after this Act enters into force. Article 4 (Transitional Measures concerning Running of Period for Corrective Measures)
Notwithstanding the amended provisions of Article 90 (10), the previous provisions shall apply to the running of a period during which an order for corrective measures may be issued or a penalty surcharge may be imposed in a case for which an application for a consent decree is filed before this Act enters into force.
ADDENDUM <Act No. 19617, Aug. 8, 2023>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 19990, Jan. 9, 2024>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 20239, Feb. 6, 2024>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 6 shall enter into force on the date of its promulgation, the amended provisions of Article 73 shall enter into force on February 9, 2024, and the amended provisions of Articles 98, 98-2 and 98-3 shall enter into force three years after the date of its promulgation. Article 2 (Applicability to Disclosure of Material Facts by Unlisted Companies)
The amended provisions of Article 27 (1) shall begin to apply to cases where disclosure is made after this Act enters into force. Article 3 (Applicability to Concurrent Positions of Chairperson of Fair Trade Dispute Mediation Council)
The amended provisions of Article 73 (8) through (10) shall begin to apply to the chairperson of the Council newly organized after this Act enters into force. Article 4 (Transitional Measures concerning Calculation of Total Assets or Sales of Companies subject to Business Combination)
Notwithstanding the amended provisions of Article 9 (5) 1, the previous provisions shall apply to the calculation of the total assets or sales of a company subject to a business combination which is obligated to file a report pursuant to the previous provisions before this Act enters into force. Article 5 (Transitional Measures concerning Reporting on Business Combination Following Exclusion from Those Required to Report Their Business Combination)
Notwithstanding the amended provisions of Article 11 (1) 3 (b), subparagraph 4 of that paragraph, and paragraph (3) 4 of that Article, the previous provisions shall apply to the reporting of a business combination where any ground for reporting a business combination occurs pursuant to the previous provisions of Article 11 (1) 3 and 4 and paragraph (3) of that Article before this Act enters into force. Article 6 Omitted.