KFTC Presidential Briefing – Review of 2025 and Enforcement Plan for 2026

On December 19, 2025, the Korea Fair Trade Commission (the “KFTC”) delivered a presidential briefing titled “Evaluation of 2025 Achievements and Areas for Improvement and Future Roadmaps.”

In its briefing, the KFTC highlighted the following main achievements for 2025: (i) implementing comprehensive measures to resolve core management hurdles faced by small and medium-sized enterprises (“SMEs”) and small business owners, (ii) alleviating burdens on people’s livelihoods and enhancing consumer rights protection, and (iii) cracking down on unfair practices by large business groups that hinder innovation and competition, while reforming regulations that restricted competition.

Looking ahead to 2026, the KFTC outlined the following key initiatives.

Remedy Power Imbalances Between Large and Small Enterprises

The KFTC announced concrete measures to ensure fair compensation for SMEs and small business owners, improve detection of unfair practices in power-imbalance (“Gap-Eul” in Korean) relationships, and strengthen the bargaining power of weaker parties to promote mutually beneficial growth.

A.	Subcontracting

Create fair subcontracting conditions by expanding payment-guarantee obligations, strengthening the effectiveness of principal’s direct payment obligations, mandating electronic payment systems and applying the subcontract-price linkage system to a broader range of cost items (e.g., energy costs).
Carry out focused inspections of major circumvention practices (such as contract-splitting), unfair special clauses that shift safety costs to subcontractors and unfair subcontracting practices in AI infrastructure-related fields.
Expand ex officio investigations to eradicate technology theft from SMEs, ease evidence-gathering systems and alleviate the burden of proof for harmed firms.

B.	Franchising

Implement a phased approach to protect franchisees throughout the business lifecycle from start-up and operation to closure, including providing clearer guidance on termination rights.
Conduct targeted investigations into “cost-shifting” via new promotional methods and unfair practices linked to high-interest lending.

C.	Distribution

Shorten payment deadlines and strengthen monitoring of delayed payments and unwarranted reductions in payments for goods.

The KFTC also plans to intensify oversight in sectors prone to power imbalance abuses through an anonymous reporting center and specialized investigation teams. In addition, to further empower SMEs and small business owners, the KFTC plans to reform the competition law framework to secure collective action rights—including exemptions from cartel provisions—and to grant organization rights to franchisees, suppliers and dealers. Below are recent regulatory changes to power imbalance regulations made in 2026:

A.	In Common

Announcement of plans to strengthen the operation of anonymous reporting centers for the subcontract, retail, distribution and franchise industries (January 29, 2026).

B.	Subcontracting

The National Assembly’s plenary session passed an amendment to the Fair Subcontracting Transactions Act (the “FSTA”) to (i) expand the obligation for payment guarantees, and (ii) broaden the scope of the subcontract price linkage system (January 29, 2026).

C.	Franchising

Announcement of the draft amendment to the Enforcement Decree of the Fair Franchise Transactions Act (the “FFTA”) to update regulations regarding franchisors’ disclosure statements to fix the imbalance of information between franchisors and their franchisees (January 28 to March 9, 2026).
Announcement of the draft amendment to the Notification on Standard Forms for Franchise Transaction Information Disclosure Statements (January 28 to February 25, 2026).

Promote Fair Competition in Sectors Close to People’s Livelihoods

The KFTC will closely scrutinize four areas that directly impact the public’s wallets—food, education, construction and energy. The KFTC is also considering introducing stronger enforcement tools, such as compulsory investigative powers and price re-determination orders, to improve the effectiveness of investigations and sanctions. For product categories closely tied to daily life (e.g., ice cream, cooking oil, movie theaters, Over-the-Top (“OTT”) streaming services, agricultural products, alcoholic beverages and AI-enabled industries), the KFTC will closely examine monopolistic distribution structures, drivers of high prices and barriers to market entry, in order to dismantle regulations that stifle competition.

Further, in order to effectively redress public harm, the KFTC also plans to promote consumer class actions, expand its powers to compel the submission of documents and broaden private parties’ access to injunctive relief. It will actively use alternative dispute-resolution mechanisms such as promoting mediation by enacting a “Fair Trade Dispute Mediation Act” and strengthening the role of the Korea Consumer Agency to provide faster relief. The KFTC also plans to establish a relief fund, financed by the administrative fines it levies, to facilitate prompt and effective recovery for consumers and SMEs.

Finally, the KFTC will intensify regulation in everyday sectors—such as cultural events, wedding halls, restaurants, fitness, AI products and funeral services—by correcting unfair contract terms, creating and revising standard contracts, policing “dark-pattern” tactics and cracking down on misleading labeling and advertising. The KFTC will also actively tackle deceptive practices in digital markets (including AI-driven false or exaggerated advertising and distorted online price displays) and strengthen direct platform responsibility to better protect online platform consumers.

Foster Innovation Ecosystem in Digital Markets

The KFTC will actively monitor, investigate and remedy abuses of market power in the digital sector (including the mobile and digital infrastructure, AI and cloud services, and delivery and driver-for-hire app sectors). To improve transactional stability and transparency between platforms and the merchants on the platforms, the KFTC plans to solicit inputs from domestic and international stakeholders and liaise with the National Assembly to support legislative discussions on the digital market.

Regarding merger review, the KFTC will actively assess transactions by considering the unique characteristics of innovative industries, such as big tech and virtual-asset platforms. It also plans to expedite review of mergers necessary for industrial restructuring in sectors such as petrochemicals and steel, while continuing to rigorously oversee compliance with any corrective measures imposed in merger cases.

Strengthen Governance of Large Business Groups and Reform Incentive Systems

The KFTC aims to respond strictly to unfair intra-group transactions and failures to disclose affiliated companies. New measures to strengthen monitoring and enforcement against self-dealing include (i) revising levels of sanctions so that administrative fines can be imposed in proportion to unjust enrichment generated from self-dealing, (ii) establishing statutory grounds for imposing fines for acts designed to evade regulation, and (iii) excluding treasury shares when calculating the shareholding ratio.

Meanwhile, to ensure that the special measures under the Act on Special Measures for Strengthening the Competitiveness of, and Protecting National High-Tech Strategic Industries (the “National High-Tech Strategic Industry Act”), which was enacted to boost investment in high-tech strategic and venture industries, do not lead to the indiscriminate expansion of corporate control, the KFTC plans to (i) relax required ownership ratios for third-tier subsidiaries subject to certain conditions and commitments to regional investment, (ii) permit financial leasing activities, and (iii) ease limits on external and overseas investment limits to expand venture investing by non-financial holding companies’ corporate venture capital (“CVC”) units and to promote strategic investment in globally promising technologies.

In order to ensure that these initiatives are carried out effectively, the KFTC will enhance the speed and transparency of its case handling by adding 167 new staff members, establishing a new regional office in Gyeongin (50 positions), launching a rapid-response team for major cases, legislating appeal procedures and expanding opportunities for parties to be heard. The KFTC also plans to enhance the effectiveness of economic sanctions by strengthening fines for repeat violations, redefining the thresholds for “seriousness” and raising the cap on fines. Accordingly, companies should continue to prepare for the stricter enforcement of the Monopoly Regulation and Fair Trade Act by conducting preliminary inspections and strengthening self-compliance efforts.

[Korean Version]

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