Measures are being proposed to suspend operations or revoke registrations for businesses that engage in collusion more than twice within five years. The statute of limitations for collusion will be extended to a maximum of 15 years, and the legal basis for price re-determination orders will be strengthened to correct market prices distorted by collusion.
On September 28, the government and the Democratic Party of Korea held a meeting at the National Assembly to announce a legislative initiative aimed at eradicating repeated collusion. The initiative includes five legislative tasks grouped into three areas: strengthening deterrence against collusion, increasing detection rates, and enhancing the effectiveness of corrective measures.
The government emphasizes the need for significant reforms, stating that repeated collusion not only increases the burden on the public but also undermines incentives for innovation and economic growth. At the meeting, Fair Trade Commission Chairman Joo Byeong-ki remarked, "Collusion is a serious unfair practice that undermines the foundations of a market economy and exploits other economic entities for unjust gains," adding that it distorts prices in sectors closely related to the public, exacerbating the burden on citizens.
He further noted, "If companies are only looking for opportunities to exploit and cheat rather than striving for success through technological development, innovation, and new business ventures, it could harm the health and growth potential of the national economy."
In response, the government and the ruling party decided to introduce a system for suspending operations and revoking registrations for businesses involved in repeated collusion. Companies that have colluded more than twice in the past five years will be subject to sanctions that expand beyond fines to include restrictions on business activities and qualifications. The Fair Trade Commission will identify repeat offenders and request relevant ministries to impose registration cancellations or operational suspensions, which will be carried out according to individual laws.
The targeted sectors include 17 industries closely related to public life, such as safety and health, energy, environment, and transportation. For four specific sectors—fire safety, electrical construction, power technology, and spatial information—legal grounds for registration cancellation and operational suspension will be established. The operational suspension system will be introduced for 13 sectors, including petroleum refining and sales, pharmaceutical manufacturing and import, passenger and freight transportation, waste management, and high-pressure gas manufacturing.
The statute of limitations for collusion will also be extended. The limitation period for cases not yet investigated will increase from the current seven years to ten years from the end of the collusion act. The existing five-year limitation period from the start of an investigation will remain, extending the maximum period for possible sanctions from 12 years to 15 years.
Monitoring of collusion in education sector bidding will be strengthened. Education offices will be designated as mandatory providers of bidding information to the Fair Trade Commission's Bid Rigging Indicator Analysis System (BRIAS). Since April of this year, bidding information for education office projects registered on the government procurement site has been linked with the cooperation of the Public Procurement Service, but legal grounds will be established for stable data acquisition.
Additionally, the price re-determination order aimed at correcting prices distorted by collusion will be codified in the Fair Trade Act. Currently, the Fair Trade Commission issues price re-determination orders based on the provision for "other necessary corrective measures." This will be explicitly stated in the law to allow for price adjustments that restore competition to pre-collusion levels.
The leniency program for self-reporting offenders will also be revised. While the core benefits of reduced fines and prosecution will be maintained, corrective measures, including price re-determination orders, will be excluded from the leniency benefits. This decision is based on the belief that measures to restore market order damaged by collusion should apply to all participants.
The government and ruling party plan to promptly introduce amendments to the Fair Trade Act and 17 individual laws reflecting these measures. Chairman Joo emphasized, "We must pursue not only strict law enforcement but also significant institutional improvements," explaining that five legislative tasks, including the introduction of registration cancellation and operational suspension systems, have been prepared through close consultations with relevant ministries.
He added, "If the direction of institutional improvement leads to swift legislation, it will contribute to the recognition that collusion is a risk factor threatening the survival of companies and help create a market where healthy competition operates."
* This article has been translated by AI.
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