KFTC Revises the Notification on Imposition of Administrative Fines to Strengthen the Effectiveness of Economic Sanctions

On April 30, 2026, the revised ‘Notification on Detailed Standards for the Imposition of Administrative Fines’(“Notification”) came into effect. The revised Notification substantially increases the lower bound of the base rate for administrative fines imposed for violations of the Monopoly Regulation and Fair Trade Law(“FTL”) and strengthens the aggravation rate for repeat offenders.

The revised Notification is largely identical to the draft amendment, which was announced in March 10, 2026(Link), but the final version contains the following notable changes:

(1) Increase in the minimum fixed-amount administrative fine for “less serious violations” for unfair trade practices, resale price maintenance, and retaliatory measures from KRW 5,000,000 to KRW 50,000,000
(2) Removal of the provision that would have allowed the KFTC to revoke the mitigation benefit that was granted to a company for cooperation with the KFTC’s investigation if the company subsequently appeals the KFTC’s disposition, and during the court proceeding, recants its testimony given during the KFTC’s investigation.

Increase in the Lower Bound of Administrative Fine Base Rate and Minimum Fixed-Amount Fine

The revised Notification significantly raises the lower bound of the administrative fine calculation base rates for all types of violations under the FTL, including cartels, and also increases the minimum amount of fixed-amount administrative fines. For example, the lower bound of the base rate for a cartel is moved up from 0.5% of the relevant revenue to 10% for “less serious violations”; from 3% to 15% for “serious violations”; and from 10.5% to 18% for “very serious violations”.

The revised Notification also sharply raises the lower bound of the calculation base rate for abuse of market-dominant position from 0.3% of the relevant revenue to 3% for “less serious violations”; from 1.5% to 4.5% for “serious violations”; and from 3.5% to 5.4% for “very serious violations”.

The key changes to the calculation base rates and the fixed-amount administrative fines for each major category of violation are as follows.

(1)

Abuse of Market Dominant Position

Severity	Assessment score	Imposition base rate		Fixed-amount administrative fine
Severity	Assessment score	Current	Amended	Current	Amended
Very serious violation	2.2 or above	3.5% - 6%	5.4% - 6%	KRW 1.2 billion – KRW 2 billion	KRW 1.8 billion – KRW 2 billion
Serious violation	At least 1.4 and less than 2.2	1.5% - 3.5%	4.5% - 5.4%	KRW 400 million – KRW 1.2 billion	KRW 1.5 billion – KRW 1.8 billion
Less serious violation	At least 1.2 and less than 1.4	0.3% - 1.5%	3% - 4.5%	KRW 50 million – KRW 400 million	KRW 1 billion – KRW 1.5 billion
Less serious violation	Less than 1.2	0.3% - 1.5%	0.3% - 3%	KRW 50 million – KRW 400 million	KRW 100 million – KRW 1 billion

(2)

Violation of the Regulations to Restrict Concentration of Economic Power

Severity	Assessment score	Imposition base-rate
Severity	Assessment score	Current	Amended
Very serious violation	2.2 or above	15% - 20%	18% - 20%
Serious violation	At least 1.4 and less than 2.2	8% - 12%	15% - 18%
Less serious violation	At least 1.2 and less than 1.4	5%	10% - 15%
Less serious violation	Less than 1.2	5%	5% - 10%

(3)

Cartel

Severity	Assessment score	Imposition base-rate		Fixed-amount administrative fine
		Current	Amended	Current	Amended
Very serious violation	2.6 or above	15% - 20%	18% - 20%	KRW 3 billion – KRW 4 billion	KRW 3.6 billion – KRW 4 billion
	At least 2.2 and less than 2.6	10.5% - 15%		KRW 2.2 billion – KRW 3 billion
Serious violation	At least 1.8 and less than 2.2	6.5% - 10.5%	15% - 18%	KRW 1.5 billion – KRW 2.2 billion	KRW 3 billion – KRW 3.6 billion
	At least 1.4 and less than 1.8	3% - 6.5%		KRW 800 million – KRW 1.5 billion
Less serious violation	Less than 1.4	0.5% - 3%	10% - 15%	KRW 10 million – KRW 800 million	KRW 2 billion – KRW 3 billion

(4)

Unfair Trade Practice and Resale Price Maintenance

Severity	Assessment score	Imposition base-rate		Fixed-amount administrative fine
Severity	Assessment score	Current	Amended	Current	Amended
Very serious violation	2.2 or above	2.4% - 4%	3.6% - 4%	KRW 600 million – KRW 1 billion	KRW 900 million – KRW 1 billion
Serious violation	At least 1.4 and less than 2.2	0.8% - 2.4%	3% - 6%	KRW 200 million – KRW 600 million	KRW 750 million – KRW 900 million
Less serious violation	At least 1.2 and less than 1.4	0.1% - 0.8%	2% - 3%	KRW 5 million – KRW 200 million	KRW 500 million – KRW 750 million
Less serious violation	Less than 1.2	0.1% - 0.8%	0.2% - 2%	KRW 5 million – KRW 200 million	KRW 50 million – KRW 500 million

(5)

Unfair Support and Provision of Undue Benefits*

Severity	Assessment score	Imposition base-rate
Severity	Assessment score	Current	Amended
Very serious violation	2.2 or above	120% - 160%	250% - 300%
Serious violation	At least 1.4 and less than 2.2	50% - 75%	200% - 250%
Less serious violation	At least 1.2 and less than 1.4	20%	150% - 200%
Less serious violation	Less than 1.2	20%	100% - 150%

* In the case of unfair support and provision of undue benefits, the administrative fine is calculated by applying the prescribed base rate to the violation amount (i.e., the amount of support).

(6)

Retaliation

Severity	Assessment score	Imposition base-rate		Fixed-amount administrative fine
Severity	Assessment score	Current	Amended	Current	Amended
Very serious violation	2.2 or above	2.4% - 4%	3.6% - 4%	KRW 600 million – KRW 1 billion	KRW 900 million – KRW 1 billion
Serious violation	At least 1.4 and less than 2.2	0.8% - 2.4%	3% - 6%	KRW 200 million – KRW 600 million	KRW 750 million – KRW 900 million
Less serious violation	At least 1.2 and less than 1.4	0.1% - 0.8%	2% - 3%	KRW 5 million – KRW 200 million	KRW 500 million – KRW 750 million
Less serious violation	Less than 1.2	0.1% - 0.8%	0.2% - 2%	KRW 5 million – KRW 200 million	KRW 50 million – KRW 500 million

Increase in the Rate of Administrative Fine for Repeat Offenders

The pre-amended Notification provided that the administrative fine could be increased by up to 10% for one prior violation in the previous five years, with a maximum of up to 80%, depending on the number of prior violations. The amended Notification increases this rate to 50% even for a single prior violation and a maximum of up to 100%, depending on the number of violations. In particular, the revised Notification prescribes an aggravation rate of up to 100% for cartels, if the company had been fined for a cartel in the past 10 years.

Elimination or Reduction of Discretionary Mitigating Factors

The pre-amended Notification provided a mitigation rate for cooperation with the KFTC investigation of 10% during each of the investigation phase and the hearing phase, allowing a total reduction of up to 20%. The amended Notification reduces these mitigation rates, permitting a total maximum reduction of 10% and only when the investigation target has cooperated throughout the investigation from the investigation phase to the hearing phase.

With respect to mitigation for voluntary remediation measures, the pre-amended Notification prescribed staggered reductions of up to 30%, depending on the degree of remediation. The amended Notification changes the ground for mitigation to “if the violating party significantly reduced the price increase caused by the violation or substantially eliminated the effects of the violation” and reduces the mitigation rate to a maximum of 10%.

In addition, the amended Notification removes from the list of grounds for mitigation the cases of (i) the violating party actively attempted to eliminate the effects of the violation, but the effects were not eliminated through no fault of the violating party, and (ii) the violation was clearly due to minor negligence arising in the ordinary course of business.

Implications

In announcing the amended Notification, the KFTC noted that the amendments “break the practice of treating legal violations as a corporate strategy and, in particular, establish a basis for imposing strong sanctions over cartels which harm the public’s livelihood.” This statement suggests that the amendment is not merely a revision of the regulation as a symbolic gesture, but a strong indication that the KFTC will actively attempt to impose substantially larger fines in practice.

Companies with relatively low operating profits face a significant risk of being hit with fines that could exceed several years’ worth of operating profits at once, and firms with prior records of violations are expected to face an even greater pressure. Accordingly, there is a heightened need to strengthen the company’s compliance system to prevent violations at the outset and to institutionalize a zero-tolerance policy toward internal control breaches in order to proactively manage antitrust risks.

The amended Notification took effect on April 30, 2026, and the pre-amended Notification will continue to apply to violations that ended before the effective date of the amended Notification. Therefore, the precise end date of a violation in future investigations is expected to have a significant impact on the fine amount, and even in case of an already on-going investigation, if the violation continues, the amended Notification can apply resulting in a higher fine than originally anticipated.

Separately, on December 29, 2025, the KFTC had announced a plan to increase the statutory ceilings on administrative fines for violations of the FTL and related laws and that it plans to submit a bill to the National Assembly in the first half of 2026(Link). If the bill is passed, it is expected that the KFTC will implement a comprehensive overhaul of the administrative fine regime, including the detailed standards set out in the revised Notification.

[Korean Version]

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