1.

Enhancing the Economic Vitality of Small and Medium-sized Enterprises and Small Business Owners

The KFTC is expected to focus on policies related to small and medium-sized enterprises (“SMEs”) and small business owners this year, particularly in the areas of subcontracting and distribution. In connection with subcontracting, the KFTC plans to focus on stabilizing payment for work performed by subcontractors. To this end, the KFTC will implement comprehensive improvement measures, such as (i) reducing the grounds for exemptions from payment guarantees, (ii) expanding the scope of direct payments from project owners, (iii) limiting a third party’s seizure of payment to subcontractors, and (iv) prohibiting unreasonable provisions on “retention money” in subcontracting agreements. In the distribution sector, the KFTC plans to focus on policies to induce timely payment for delivered goods. Specifically, the KFTC will (i) impose an obligation to comply with payment deadlines and separate management obligations on online intermediary platforms and (ii) seek to shorten the settlement period for transactions involving traditional retail businesses by reviewing the appropriateness of settlement periods associated with direct purchases and special contract purchases.

In this context, the KFTC has announced plans for intensive inspections of unfair business practices found in the distribution sector, such as (i) illegal avoidance of the variable subcontract price system^[1] and (ii) the online shopping industry’s delayed payments and shifting of promotional costs. Additionally, to protect franchisees and to alleviate the burden on small business owners, the KFTC intends to (i) introduce a “franchise information disclosure system,” (ii) guarantee the franchisees’ right to organize, and (iii) intensify monitoring of unfair practices on online platforms (e.g., food delivery app’s self-preferencing and demand for most-favored nation (“MFN”) treatment).
 

2.

Promoting Innovative Competition for Future Preparedness

The KFTC plans to focus on monitoring collusion in four key sectors: health and safety; food, clothing, and housing; construction and intermediate goods; and public procurement. The KFTC will also enhance monitoring activities to detect new types of collusion enabled by or utilizing AI and other emerging technologies, while also strengthening oversight of unfair practices in existing core industries (e.g., telecommunications, automotive, and semiconductors) and in next-generation industries (e.g., strategic high-tech, software, content, and industrial machinery). Specifically, the KFTC will target unfair subcontracting practices and technology misappropriation preying on innovative SMEs and startups. On the policy front, the KFTC intends to (i) revisit competition-restrictive regulations that hinder innovation in green, low-carbon, and senior-friendly industries, (ii) conduct market analyses to seek structural changes to sectors characterized by monopolistic competition, and (iii) publish policy reports outlining competition and consumer policy directions in future growth markets (e.g., the market for “data” or the market for “subscription-based services”).

Additionally, the KFTC will continue to pursue legislation aimed at swiftly eliminating four major types of anti-competitive conduct displayed by monopolistic platforms (self-preferencing, tying, restrictions on multi-homing, and demand for MFN treatment) across six service areas (intermediation, search, social media, video, operating systems, and advertising) within the platform market. Furthermore, the KFTC will closely examine (i) unfair practices by subscription-based, vertical, and mobile platform companies and (ii) deceptive practices by overseas online platforms.
 

3.

Strengthening Consumer Protection and Enhancing Consumer Rights

The KFTC plans to implement consumer protection measures tailored to different age groups: (i) young adults, (ii) middle-aged, and (iii) elderly. For young adults, this will involve expanding access to price information for wedding preparations and addressing unfair practices related to childbirth and childcare (such as unfair or misleading advertisements for childcare products). For middle-aged consumers, the KFTC will assess consumer harm related to cultural content, travel, and healthcare. For the elderly, the KFTC aims to build a one-stop integrated platform, which provides information on funeral services and compensation for consumer damages, encourage responsible management in the funeral services industry, and improve regulations to prevent poor management and insolvency in this sector.

Moreover, the KFTC will (i) mandate the disclosure of information related to the collection and processing of reviews by online sellers (such as posting periods and deletion criteria), (ii) enhance consumer rights by updating outdated regulations to fit the realities of digital transactions (e.g., adjusting the scope of personal information collection on C2C platforms; and establishing refund policies for subscription-based services like OTT platforms), and (iii) implement measures to prevent consumer harm in new types of transactions (such as increasing refund rates of new-type gift certificates and reviewing the terms and conditions related to the transfer and refund of gift certificates; conducting a fact-finding survey into AI washing practices; amending consumer harm prevention guidelines related to transactions that take place at temporary exhibitions like pop-up stores) and global direct purchase transactions (such as mandating the designation of local agents for overseas platforms; and establishing guidelines to prevent the distribution of harmful or uncertified products via overseas platforms).
 

4.

Improving the Operation of the Large Business Groups System

In terms of monitoring and sanctioning unfair intragroup transactions, the KFTC’s focus will likely be on sectors largely occupied by SMEs (e.g., food services and building maintenance) and industries that are closely linked to people’s livelihoods (e.g., real estate and healthcare). In addition, through information sharing and coordination with expert advisory committees and relevant government agencies (such as the National Tax Service and the Bank of Korea), the KFTC will enhance its monitoring and detection systems for unfair intragroup transactions and improve the system of imposing fines for illegal activities aimed at evading regulations on large business groups.

Meanwhile, it is expected that the KFTC will overhaul its systems and procedures to ensure rational enforcement activities. On that account, the KFTC has announced plans to rationalize its policies on large business groups in response to changes in the economic environment by (i) altering the criteria for designating business groups subject to public disclosure so that the new criteria is now linked with GDP, (ii) expanding the scope for excluding from business group affiliation, independently run companies led by a non-profit organization’s executives, and (iii) easing regulations on corporate venture capital (“CVC”) to stimulate the discovery of and investment in venture companies. The KFTC also plans to alleviate the burden on business groups to prepare designation-related documents by (i) streamlining the submission of primary designation-related documents via the business group portal (“eGroup”) and (ii) exempting the submission of duplicate information related to corporate status and financials, which can be easily obtained from the Repository of Korea’s Corporate Filings (“DART”).
 

5.

Streamlining Case Management Processes and Reinforcing Support for Companies Harmed by Anticompetitive Conduct

The KFTC intends to (i) impose aggravated fines on habitual violators, (ii) clarify the scope and criteria for the disclosure of its decisions, (iii) promote the “Fair Trade Voluntary Compliance Program (CP)” along with bolstering the credibility of CP evaluations, and (iv) improve systems for collecting, submitting, and managing digital case materials while maintaining their evidentiary value and integrity.

Furthermore, the KFTC has announced plans to reinforce support for companies harmed by anticompetitive conduct. As part of this effort, the KFTC will (i) pursue legislation to integrate dispute resolution regulations scattered across six separate statutes, (ii) establish a “Comprehensive Fair Trade Support Center,” (iii) expand the use of courts’ production order demanding the disclosure of documents, materials, or information in the litigant’s possession, and (iv) self-impose an obligation on itself to submit documents in its possession to courts.