The Korea Fair Trade Commission will improve the system by raising fine levels in proportion to company size. The intention is to restructure it so that the larger a company's sales, the larger the fine. It also plans to establish a minimum baseline for the total amount of fines. This is seen as a move to prevent cash-rich conglomerates from treating current fines as a ‘simple cost’ and to secure the effectiveness of corporate sanctions.

According to relevant ministries and others on the 9th, the Korea Fair Trade Commission recently commissioned a research project on ‘plans to improve the fine-imposition system’.

The core of this reform is to reflect company size, such as sales, as a direct aggravating factor when calculating fines. The greater a company's total sales, the heavier the fine burden.

The Korea Fair Trade Commission has brought out this option because it judges that the current method is insufficient to prevent violations of the law by large corporations. Until now, the Commission has calculated fines based on ‘related sales’ connected to the offending conduct. For conglomerates with massive sales, the profits from breaking the law or the effect of strengthening market dominance are often greater than the fines, so cases of continuing collusion and other unfair practices have not ceased.

Indeed, a 2020 research report by the Korea Institute of Public Finance shows that from 2011 to 2017, the average fine as a share of average sales for large companies was only 0.17%. The figures were 0.47% for mid-sized companies, 1.45% for medium companies, 3.33% for small companies, and 22.30% for microenterprises, with the fine burden clearly inversely proportional to company size.

To address these limitations, major jurisdictions including the EU impose fines that take into account sales and other factors. In 2024, the European Commission fined Apple 1.84 billion euros (2.7 trillion won) for abusing its dominant position in the music streaming app market. The base fine was only 40 million euros, but an additional 1.8 billion euros was imposed.

The Korea Fair Trade Commission is reportedly giving serious consideration to such a plan. At a Cabinet meeting on the 27th of last month, Chair Joo Byung-gi said, “Like the EU·Germany, we will push for fundamental improvements that reflect company size through a commissioned study and a TF.”

The Korea Fair Trade Commission is also reviewing whether to set a floor for the total amount of fines. To prevent excessively low fines when mitigating factors are applied, a plan to set a minimum baseline is being discussed.

It also plans to present by the end of this month measures to raise the minimum rate for major violations. Currently, for very serious violations in the category of abuse of a dominant market position, the floor is set at 3.5% of total sales during the violation period.

At a Cabinet meeting on the 27th of last month, President Lee Jae Myung pointed out, “(If the fine rate is) 20%, what is the point? If you work it down so it is only 2%, that is it,” urging stronger effectiveness of fines.

The Commission also plans to improve the system of imposing fixed-sum fines when it is difficult to identify related sales. Currently, fixed-sum fines generally range from 500 million to 4 billion won. The aim is to prevent situations where, as in cases of technology theft from small and medium enterprises, a serious legal violation results in a small fine because sales are difficult to calculate.

Through this research project, the Korea Fair Trade Commission will completely overhaul the fine-imposition framework and intends to introduce a bill to amend the Fair Trade Act within the year.

An official at the Korea Fair Trade Commission said, “After the study, we will prepare a draft overhaul plan and then finalize it following discussions by a TF composed of experts and stakeholder groups.”