The Fair Trade Commission (FTC) will apply a 75% reduction in fines for companies that self-report collusion after an investigation has begun, instead of granting full immunity. The period for limiting reductions for repeat offenders will also be effectively extended to 10 years to prevent the self-reporting system from being used as a means to evade penalties.
The FTC announced that it will publicly notify the amendment to the enforcement decree of the Fair Trade Act from September 23 to November 2. A revised notice on the self-reporting reduction system will also be announced by October 13.
The self-reporting reduction system is designed to mitigate or exempt penalties for companies that voluntarily report collusion or cooperate with investigations. It aims to detect covert collusion early and undermine trust among participants to prevent such practices.
Under the current system, the first company to self-report is granted full immunity from fines, regardless of when the FTC begins its investigation. The amendment will maintain full immunity for the first reporter if they come forward before the investigation starts, but will limit the reduction to 75% for those who report after the investigation has begun.
The FTC determined that there is a difference in the contribution to uncovering cases between companies that voluntarily report before an investigation starts and those that report after the authorities have already identified the allegations. It also considered that applying the same benefits could incentivize companies to maintain collusion until an investigation begins.
Restrictions on reductions for repeat offenders will also be strengthened. Currently, companies that receive a reduction for self-reporting or are penalized for collusion face limitations if they engage in collusion again within five years. The new rules will apply the same restrictions if they collude again within ten years after the initial five-year period.
As a result, companies that self-report as the first reporter for collusion occurring between five and ten years after the initial offense will receive only a 50% reduction instead of full immunity. For those reporting after the investigation begins, the reduction will decrease from 75% to 37.5%, and for second reporters, it will drop from 50% to 25%.
Companies penalized for collusion will also face restrictions if they engage in collusion in other business areas. The current requirement that the collusion must violate the corrective measures will be removed, allowing the FTC to impose restrictions on reductions for repeat collusion, even if the items or markets involved differ from those previously identified.
The FTC will also block attempts to evade reduction limits through corporate restructuring or business transfers. Companies that inherit collusion-related businesses through mergers, splits, or business transfers will also be subject to the same restrictions for repeat offenders.
The FTC plans to gather opinions from stakeholders and relevant departments during the legislative and administrative notification period and aims to finalize the amendments to the enforcement decree and reduction notice by the first quarter of 2027.
* This article has been translated by AI.
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