1.

Key Points
 

• The Korea Fair Trade Commission (“KFTC”) has announced a proposed amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act that would differentiate reductions in administrative surcharges for leniency applicants and restrict leniency for repeat cartel offenders. It also announced a proposed amendment to its Leniency Guidelines.

• Under the proposals, a first-in leniency applicant that reports a cartel after an investigation has begun would receive a 75% reduction in its administrative surcharge, rather than a full exemption. If a company sanctioned for cartel conduct reports another cartel more than five but no more than ten years later, its leniency benefit would be reduced by half.

• The KFTC also announced a proposed amendment to its Bid-Rigging Guidelines that would expand the criteria for requesting restrictions on repeat offenders’ eligibility to participate in public tenders. The period used to assess repeat cartel conduct would increase from five to ten years, and the threshold for such a request would change from “more than five points” to “four or more points.”

• Comments on the proposed Enforcement Decree and Leniency Guidelines amendments may be submitted until November 2 and October 13, 2026, respectively. Comments on the proposed Bid-Rigging Guidelines amendment may be submitted until October 12, 2026.

On September 21, 2026, the KFTC announced a proposed amendment to the Guidelines for Reviewing Improper Concerted Acts in Bidding (“Bid-Rigging Guidelines”). On September 23, it announced proposed amendments to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act and the Guidelines on the Operation of the Leniency Program for Corrective Measures and Other Sanctions for Applicants Reporting Unfair Collusive Conduct (“Leniency Guidelines”).

The proposals would strengthen sanctions against cartel participants. They would broaden the circumstances in which the KFTC may request restrictions on participation in public tenders and reduce leniency benefits depending on when a cartel is reported and on the applicant’s history of cartel conduct. Companies previously sanctioned for cartel conduct or granted leniency should assess how these changes could affect their participation in public tenders and future decisions about whether to seek leniency.
 

2.

Background

The leniency program reduces or waives administrative surcharges and other sanctions for companies that voluntarily report cartel conduct or cooperate with an investigation. By encouraging cartel participants to report their conduct and provide evidence, the program aims to detect and prevent cartels that would otherwise be difficult to uncover. Because repeat cartel conduct has persisted, however, the KFTC is seeking to encourage reports before investigations begin and to reduce leniency benefits for repeat offenders.

Separately, the Act on Contracts to Which the State Is a Party provides that, at the KFTC’s request, the Public Procurement Service and other procuring entities may restrict a company’s eligibility to participate in bidding. Under the existing Bid-Rigging Guidelines, the KFTC may request such a restriction only if a company has accumulated more than five penalty points for bid rigging during the preceding five years. Concerns about repeated bid rigging by some companies have led to continued calls for stronger deterrence.
 

3.

What the KFTC Proposed

The proposed amendments would (i) reduce leniency benefits for reports made after an investigation begins, (ii) further reduce benefits for repeat cartel offenders, and (iii) expand the circumstances in which the KFTC may request restrictions on participation in public tenders.
 

(1)

Reduced Leniency Benefits for Reports Made After an Investigation Begins (Differentiated Leniency Benefits)
 
Under the current rules, the first-in leniency applicant receives a full exemption from administrative surcharges, regardless of whether it reports the cartel before or after the KFTC begins its investigation. The KFTC considers, however, that a report made voluntarily before an investigation contributes more to resolving a case than one made after an investigation has begun. The proposal would therefore retain the full exemption for a first-in applicant that reports before an investigation begins, while limiting a first-in applicant that reports after an investigation begins to a 75% reduction in its administrative surcharge.

This change appears intended to encourage earlier reporting and the earlier detection and dismantling of cartels.
 

(2)

Further Reductions in Leniency for Repeat Cartel Offenders
 
Under the current rules, leniency is restricted only where a company that has previously received leniency or been sanctioned for cartel conduct engages in another cartel within five years. Under the proposal, if repeat cartel conduct occurs more than five but no more than ten years later, the reduction in administrative surcharges otherwise available through leniency would be halved.
 

(3)

Expanded Scope of Requests to Restrict Participation in Public Procurement Bids (Stricter Criteria for Requesting Restrictions on Bid Participation Eligibility)

The KFTC would rename the Bid-Rigging Guidelines as the Guidelines on Improper Concerted Acts in Bidding and Requests to Restrict Bid Participation Eligibility. The new title would reflect an expansion of the Bid-Rigging Guidelines’ scope: in addition to setting out the types of bid-rigging and the standards for reviewing them, the Bid-Rigging Guidelines would comprehensively address the criteria for requesting restrictions on bid participation eligibility for all types of cartel conduct.

The KFTC would also extend the period used to assess repeat cartel conduct from five years to ten years and aggregate penalty points imposed for all types of cartel conduct, not just bid-rigging. It would also lower the threshold for requesting a restriction from “more than five points” to “four or more points.” Consequently, a company that receives a corrective order or a more severe measure for cartel conduct and then receives another such measure within ten years may become subject to a request to restrict its bid participation eligibility.

Under the current Bid-Rigging Guidelines, a company is not subject to such a request even if it has been ordered to pay administrative surcharges twice and accumulated five penalty points. Under the proposed amendments, a company could be subject to a request even if it has received only two corrective orders, resulting in a total of four penalty points.
 

4.

Why This Matters

The changes to the leniency program will also affect how companies involved in cartel conduct decide whether and when to self-report.

Because the benefit available to a first-in leniency applicant after an investigation has commenced would be reduced from a full exemption to a 75% reduction, companies would have a stronger incentive to report cartel conduct before an investigation begins. Where the conduct constitutes repeat cartel conduct, the reduction may be further limited, and restrictions on leniency may apply regardless of the line of business involved. Companies with a history of cartel conduct should therefore carefully consider whether and when to apply for leniency. The proposed amendment to the Leniency Guidelines would also treat the continuation of an existing cartel as repeat cartel conduct. As noted above, however, this point may be clarified during the legislative process, so companies should review the provisions as finally adopted. In addition, restrictions on leniency may transfer to a company that acquires a business through a corporate division or business transfer. Acquirers should therefore closely examine the target business’s history of cartel conduct during M&A due diligence.

The changes are also expected to have a significant impact on participation in public procurement bids and self-reporting decisions by companies with a history of repeated cartel conduct. Companies that rely heavily on transactions with public institutions should review the measures imposed and penalty points received for cartel conduct over the past ten years and, taking the transitional provision into account, assess whether they may be subject to a request to restrict their eligibility to participate in bids. Because the conduct subject to penalty points would expand from bid-rigging to all types of cartel conduct, and the threshold would be four or more points, even a company that has received only two corrective orders may fall within the scope of such a request. The rules would therefore apply to a broader range of companies than before.