KFTC’s Proposed Amendments to Administrative Fine Notifications Under MRFTA and Related Laws

On December 30, 2025, the Korea Fair Trade Commission (the “KFTC”) announced plans to significantly reform its administrative sanctions system. While revising or partially abolishing criminal penalties for certain types of violations, the KFTC aims to increase administrative fines to a level sufficient to deter legal violations and also introduces new administrative fines (the “Penalty Reform Plan”).

As part of the Penalty Reform Plan, on April 30, 2026, the KFTC implemented its revised notification on the Detailed Standards for the Imposition of Administrative Fines (the “Revised Notification”), which applies to the Monopoly Regulation and Fair Trade Act (the “MRFTA”). Notably, the Revised Notification strengthens the standards for calculating administrative fines to ensure the system operates more effectively against habitual, repeat offenders, ultimately preventing recidivism.

In addition, the KFTC has been strengthening and refining the broader administrative fine system by issuing advance notices for proposed amendments to the administrative fine notifications of several related laws. These include the Consumer Protection in Electronic Commerce Act (the “E-Commerce Act”), the Fair Labeling and Advertising Act (the “FLAA”), the Fair Subcontracting Transactions Act (the “Subcontracting Act”), the Fair Franchise Transactions Act (the “Franchise Act”), the Act on Fair Transactions in Large Retail Business (the “Large Retail Business Act”) and the Fair Distribution Transactions Act (the “FDTA”), alongside their respective Enforcement Decrees and Rules. The advance notice periods are as follows:

Relevant Law	Status of Proposed Administrative Fine Notification Amendments
MRFTA	The Revised Notification became effective on December 30, 2025.
E-Commerce Act	Advance notice for proposed amendments to the Enforcement Decree and Enforcement Rules: March 11, 2026 – April 20, 2026 Advance notice for proposed amendments to the administrative fine notification: March 11, 2026 – March 31, 2026
FLAA	The proposed amendments to the Enforcement Decree and the administrative fine notification became effective on July 1, 2026.
Subcontracting Act, Franchise Act, Large Retail Business Act and FDTA	Advance notice for proposed amendments to the Enforcement Decree: April 30, 2026 – June 9, 2026 Advance notice for proposed amendments to the administrative fine notification: April 30, 2026 – May 20, 2026

The proposed amendments to these notifications generally (i) raise the lower limit of the base rates for imposing administrative fines, (ii) increase the fine aggravation rates for repeat offenders, and (iii) eliminate or reduce discretionary mitigation factors. The key details are summarized below.

1.	Administrative Fines for MRFTA Violations

Increased Lower Limits for Fine Base Rate and Minimum Fixed-Amount Fines

The Revised Notification significantly raises the lower limit of the base rates used to calculate administrative fines for all types of violations under the MRFTA, including unfair collusive conduct. For example, in cases involving “less serious” unfair collusive conduct, the minimum base rate has surged from 0.5% to 10%. Regarding unfair support and the provision of undue benefits, the minimum base rate for “less serious violations” has been raised from 20% to 100%, while the maximum base rate for “very serious violations” has been raised from 160% to 300%. Furthermore, where standards for fixed-amount administrative fines apply, the Revised Notification increases the minimum threshold for those fines.

Key changes to the fine base rates and fixed-amount fines for each major violation category are as follows:

a.	Abuse of market-dominant position

Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
Severity	Assessment Score	Previous	Current	Previous	Current
Very Serious Violation	2.2 and above	3.5% – 6%	5.4% – 6%	KRW 1.2 billion – KRW 2 billion	KRW 1.8 billion – KRW 2 billion
Serious Violation	1.4 to 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	1.2 to 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

b.	Unfair collusive conduct

Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
		Previous	Current	Previous	Current
Very Serious Violation	2.6 and above	15% – 20%	18% – 20%	KRW 3 billion – KRW 4 billion	KRW 3.6 billion – KRW 4 billion
	2.2 to less than 2.6	10.5% – 15%		KRW 2.2 billion – KRW 3 billion
Serious Violation	1.8 to 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
	1.4 to 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

c.	Unfair trade practices and resale price maintenance

Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
Severity	Assessment Score	Previous	Current	Previous	Current
Very Serious Violation	2.2 and above	2.4% – 4%	3.6% – 4%	KRW 600 million – KRW 1 billion	KRW 900 million – KRW 1 billion
Serious Violation	1.4 to less than 2.2	0.8% – 2.4%	3% – 3.6%	KRW 200 million – KRW 600 million	KRW 750 million – KRW 900 million
Less Serious Violation	1.2 to 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

d.	Unfair support and provision of undue benefits

Severity	Assessment Score	Base Rate
Severity	Assessment Score	Previous	Current
Very Serious Violation	2.2 and above	120% – 160%	250% – 300%
Serious Violation	1.4 to less than 2.2	50% – 75%	200% – 250%
Less Serious Violation	1.2 to less than 1.4	20%	150% – 200%
Less Serious Violation	Less than 1.2	20%	100% – 150%

Increased Aggravation Rates for Repeat Offenders

The Revised Notification has also increased the aggravation rates, allowing fines to be increased by up to 50% for just a single prior violation, and up to 100% depending on the number of prior violations. In particular, for unfair collusive conduct (cartels), the maximum aggravation rate has been increased to up to 100% if the company has been fined for a cartel even once within the past ten years.

Weighted Value Based on Number of Violations	Amended Aggravation Rate**
1 or more violations* within 5 years Cumulative Weighted Value: 2 points or more	Greater than 40% and up to 50%
2 or more violations within 5 years Cumulative Weighted Value: 3 points or more	Greater than 50% and up to 70%
3 or more violations within 5 years Cumulative Weighted Value: 5 points or more	Greater than 70% and up to 90%
4 or more violations within 5 years Cumulative Weighted Value: 7 points or more	Greater than 90% and up to 100%

* At least a warning sanction
** In the case of cartels, the fine is subject to an aggravation rate of up to 100% if a company repeats the offense after having been fined for a cartel at least once in the past ten years

Elimination or Reduction of Discretionary Mitigating Factors

The Revised Notification narrows the scope of penalty mitigation, allowing mitigation of up to a total of 10% only in limited cases of cooperation during the entire investigation and hearing stage. The maximum mitigation rate for voluntary corrective measures has also been reduced from 30% to 10%, while the provision allowing a 10% reduction for “minor negligence” has been eliminated entirely.

Furthermore, the Revised Notification establishes grounds for the KFTC to rescind mitigation benefits that were granted to a business that cooperated with a KFTC investigation or hearing if that business denies the materials or statements it submitted during the KFTC investigation/hearing in a subsequent appeal brought to the court against the KFTC’s decision, or if those submissions are found to be false.

Proposed Amendments to Administrative Fine System for E-Commerce Act Violations

Key details of the proposed amendments to the administrative fine notification for the E-Commerce Act, its Enforcement Decree, and its Enforcement Rules—which were announced via advance notice on March 11, 2026, and are scheduled to take effect on July 21, 2026—are as follows:

Increase aggravation rates for repeat violations: The proposed amendments increase the additional penalty for repeat offenses by up to 50% for a single repeat violation, and up to 100% for four or more violations within five years.
Reduce discretionary mitigating factors: The proposed amendments reduce the mitigation rate for taking voluntary corrective measures from 30% to 10%.

Proposed Amendments to Administrative Fine System for FLAA Violations

Key details of the proposed amendments to the administrative fine notification for the FLAA and its Enforcement Decree—which were announced via advance notice on March 25, 2026, and became effective on July 1, 2026—are as follows:

Increase lower limits of fine calculation base rates and minimum fixed-amount fines:

Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
Severity	Assessment Score	Current	Proposed Amendment	Current	Proposed Amendment
Very Serious Violation	2.4 and above	1.6% – 2%	1.8% – 2%	KRW 400 million – KRW 500 million	KRW 450 million – KRW 500 million
Serious Violation	1.6 to less than 2.4	0.8% – 1.6%	1.5% – 1.8%	KRW 200 million – KRW 400 million	KRW 350 million – KRW 450 million
Less Serious Violation	1.3 to less than 1.6	0.1% – 0.8%	1% – 1.5%	KRW 5 million – KRW 200 million	KRW 250 million – KRW 350 million
Less Serious Violation	Less than 1.3	0.1% – 0.8%	0.1% – 1%	KRW 5 million – KRW 200 million	KRW 5 million – KRW 250 million

Increase aggravation rates for repeat offenders: Just like the administrative fine notification for E-Commerce Act violations, the proposed amendments increase the additional penalty for repeat offenses by up to 50% for a single repeat violation, and up to 100% for four or more violations within five years.
Reduce discretionary mitigating factors: The proposed amendments reduce the scope of mitigation so that a mitigation of up to a total of 10% may be applied only in cases where cooperation is provided from the investigation stage to the hearing stage (under the previous rules, a 10% mitigation may be applied at each of the investigation and hearing stages, for a total of up to 20%). For respondents that reverse their statements during the subsequent litigation process, the proposed amendments provide a basis for ex officio revocation of mitigation benefits granted in the previous stages. The proposed amendments also reduce the mitigation rate for taking voluntary corrective measures from 30% to 10%, and remove the mitigation provision for respondents that have exercised considerable care to avoid violations, such as seeking an external agency’s deliberation or legal advice.

Proposed Amendments to Administrative Fine System for Violations of Subcontracting Act, Franchise Act, Large Retail Business Act and FDTA

Similarly, the administrative fine systems for the Subcontracting Act, Franchise Act, Large Retail Business Act and FDTA have been reformed to strengthen deterrence against legal violations, with the changes set to take effect in July 2026.

Increase lower limits of fine calculation base rates and minimum fixed-amount fines: An advance notice for the proposed amendments has been issued, which increases the fine calculation base rates and fixed-amount administrative fines, and further categorizes the level of severity into four tiers (rather than the current three). For the Franchise Act and FDTA, the “Detailed Evaluation Standards” (an annex table attached to the administrative fine notifications), which serve as the basis for determining the severity of a violation, have been partially amended.

	Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
	Severity	Assessment Score	Current	Proposed Amendment	Current	Proposed Amendment
Subcontracting Act	Very Serious Violation	2.2 and above	60% – 80%	90% – 100%	KRW 900 million – KRW 2 billion	KRW 1.8 billion – KRW 2 billion
	Serious Violation	1.4 to less than 2.2	40% – 60%	75% – 90%	KRW 200 million – KRW 900 million	KRW 1.5 billion – KRW 1.8 billion
	Less Serious Violation	1.2 to less than 1.4	20% – 40%	50% – 75%	KRW 40 million – KRW 200 million	KRW 1 billion – KRW 1.5 billion
	Less Serious Violation	Less than 1.2	20% – 40%	40% – 50%	KRW 40 million – KRW 200 million	KRW 40 million – KRW 1 billion

	Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
	Severity	Assessment Score	Current	Proposed Amendment	Current	Proposed Amendment
Franchise Act	Very Serious Violation	2.2 and above	1.6% – 2%	1.8% – 2%	KRW 400 million – KRW 500 million	KRW 450 million – KRW 500 million
	Serious Violation	1.4 to less than 2.2	0.8% – 1.6%	1.5% – 1.8%	KRW 200 million – KRW 400 million	KRW 350 million – KRW 450 million
	Less Serious Violation	1.2 to less than 1.4	0.1% – 0.8%	1% – 1.5%	KRW 5 million – KRW 200 million	KRW 250 million – KRW 350 million
	Less Serious Violation	Less than 1.2	0.1% – 0.8%	0.1% – 1%	KRW 5 million – KRW 200 million	KRW 5 million – KRW 250 million

	Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
	Severity	Assessment Score	Current	Proposed Amendment	Current	Proposed Amendment
Large Retail Business Act	Very Serious Violation	2.2 and above	140%	180% – 200%	KRW 400 million – KRW 500 million	KRW 450 million – KRW 500 million
	Serious Violation	1.4 to less than 2.2	100%	150% – 180%	KRW 200 million – KRW 400 million	KRW 350 million – KRW 450 million
	Less Serious Violation	1.2 to less than 1.4	60%	100% – 150%	KRW 5 million – KRW 200 million	KRW 250 million – KRW 350 million
	Less Serious Violation	Less than 1.2	60%	80% – 100%	KRW 5 million – KRW 200 million	KRW 5 million – KRW 250 million

	Severity	Assessment Score	Base Rate		Fixed-Amount Administrative Fine
	Severity	Assessment Score	Current	Proposed Amendment	Current	Proposed Amendment
FDTA	Very Serious Violation	2.2 and above	60% – 80%	90% – 100%	KRW 400 million – KRW 500 million	KRW 450 million – KRW 500 million
	Serious Violation	1.4 to less than 2.2	40% – 60%	75% – 90%	KRW 200 million – KRW 400 million	KRW 350 million – KRW 450 million
	Less Serious Violation	1.2 to less than 1.4	20% – 40%	50% – 75%	KRW 5 million – KRW 200 million	KRW 250 million – KRW 350 million
	Less Serious Violation	Less than 1.2	20% – 40%	40% – 50%	KRW 5 million – KRW 200 million	KRW 5 million – KRW 250 million

Increase aggravation rates for repeat offenders: The proposed amendments increase the additional penalty for repeat offenses by up to 50% for a single repeat violation, and up to 100% depending on the number of violations. For FDTA and Franchise Act violations, the proposed amendments establish a legal basis for allowing a 30% increase if the respondent retaliates against a party for filing a report with the KFTC or applying for dispute mediation (as is currently the case under the MRFTA and the Large Retail Business Act).
Reduce discretionary mitigating factors: The proposed amendments reduce the scope of mitigation so that a maximum total reduction of 10% may be applied, only in cases where cooperation is provided from the investigation stage through the hearing stage (under the current rules, a 10% mitigation may be applied at each stage, for a total of up to 20%). For respondents that reverse their statements during the subsequent litigation process, the proposed amendments provide a basis for the ex officio revocation of the mitigating benefits granted in the previous stages. The proposed amendments also reduce the mitigation rate for voluntary corrective measures from 50% to “up to 10%, only if the effects of the violation have been substantially removed.”

Implications

In announcing the series of proposed amendments as part of its Penalty Reform Plan, the KFTC emphasized the need to impose administrative fines that are substantially greater than the unjust enrichment gained from violations. This indicates that the increased fine calculation base rates will result in significantly higher administrative fines being imposed by the KFTC.

Further, because the KFTC intends to narrow the scope of discretionary mitigation for cooperation during the investigation and hearing stages, and revoke mitigating benefits granted in the previous stages for respondents that reverse their statements during the subsequent litigation process, securing mitigation for administrative fines will likely be even more difficult in the future. Therefore, the importance of responding in a strategic manner from the initial stage will be greater, whereby cooperating with the investigation while planning to contest the findings later may no longer be a valid strategy.

Meanwhile, the proposed amendments to the administrative fine notifications for the FLAA, Subcontracting Act, Franchise Act, Large Retail Business Act and FDTA (excluding the notification for E-Commerce Act) include transitional provisions in their addenda. These provisions require that administrative fines for violations concluded before the amendments take effect be imposed in accordance with the pre-amendment notifications. As the overall administrative fine system will be strengthened once these proposed amendments take effect (in July 2026), companies should proactively assess their risk of violating fair trade-related laws.

[Korean Version]

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