Effective October 2, 2026, the Prosecutors’ Office will be abolished and replaced by two new agencies: the Public Prosecution Office and the Serious Crimes Investigation Agency (the “SCIA”). Under the new structure, violations of the laws within the jurisdiction of the Korea Fair Trade Commission (the “KFTC”) – including Korea’s primary competition and fair trade law, the Monopoly Regulation and Fair Trade Act – will become principal subjects of investigation by the SCIA. Recent legislative amendments have also changed the recipient of the KFTC’s criminal referrals for all cases under its jurisdiction, from the Prosecutor General to the Head of the SCIA. The affected laws include the Monopoly Regulation and Fair Trade Act, the Subcontracting Act, the Large Retail Business Act, the Franchise Business Act, the Agency Act, and the Display Advertising Act.

These institutional changes could affect criminal investigation and prosecution of competition and fair trade violations in profound ways.
 

• The Public Prosecution Office may not conduct direct investigations but, where necessary, could request supplementary investigation from the SCIA;

• The decision on whether to prosecute competition law violations will rest with the Public Prosecution Office;

• Although not yet confirmed, the authority responsible for criminal leniency may be split between the SCIA and the Public Prosecution Office;

• Discussions are underway to abolish or relax the KFTC’s exclusive right to file criminal referrals and to expand the range of parties entitled to file criminal referrals to include heads of local governments, among others, which may in turn bring changes to the investigating authorities.

Because these changes are wide-ranging, interconnected, and in some respects still unsettled, they warrant continued attention and analysis. The principal changes confirmed to date are set out below.
 

In connection with the abolition or relaxation of the KFTC’s exclusive right to make a criminal referral on fair trade cases, discussions are also underway regarding a scheme that would allow a certain number of citizens, central administrative agencies, and metropolitan local governments to file criminal referrals directly with the investigating authorities without going through the KFTC.

The relevant institutional framework has not yet been finalized, and several details will need to be monitored, such as the scope of parties entitled to file criminal referrals and which authority will handle them. It also remains unconfirmed how the criminal leniency (voluntary reporting and reduction) system will operate under the new Public Prosecution Office and SCIA structure. Because criminal leniency bears directly on the decision whether to prosecute, there are competing views: one that the Public Prosecution Office should take the lead, and another that the SCIA should take the lead as it serves as the point of intake for investigative leads. Given the institutional importance of criminal leniency, we will continue to monitor the reform process and whether specific procedures are established, and will provide updates as appropriate.

Once the SCIA is established, major investigations into antitrust and competition cases, such as collusion, are likely to be conducted primarily through the Antitrust Investigation Bureau (comprising four divisions) of the Seoul SCIA. In parallel, the KFTC has newly established a Key Investigation Planning Group to handle “significant” cases, which is scheduled to become fully operational in the fourth quarter of 2026. Comprehensive review of, and preparation for, competition law investigations and inquiries will be critical as companies navigate the new enforcement system.

[Korean Version]