On August 13, 2019, the Korea Fair Trade Commission (“KFTC”), in an effort to improve the effectiveness of internal antirust compliance programs (“CPs”) of companies, proposed an amendment to its Guidelines on Operation of CPs and Provision of Incentives (the “Proposed Amendment”). The Proposed Amendment purports to (i) exempt companies with the highest CP rating from having to publish their past records of antitrust violation; (ii) lift existing restrictions that prevent companies with past records of antitrust violation from applying for a CP evaluation; and (iii) streamline the process for adopting and evaluating CPs. The KFTC will be gathering feedback on the Proposed Amendment until September 2, 2019, before putting it into effect.
The Proposed Amendment is in line with the amendment bill for the comprehensive overhaul of the Monopoly Regulation and Fair Trade Law (“FTL”) which is currently pending review by the National Assembly (the “Amendment Bill”). Among others, the Amendment Bill includes a section on the adoption of a CP rating system for promoting voluntary compliance with the FTL coupled with an incentive program which further incentivizes compliance based on each company’s CP ratings. The Proposed Amendment is expected to take effect around the time the CP related sections of the Amendment Bill is passed into law. Once the Amendment Bill and the Proposed Amendment take effect, the KFTC is expected to make full use of the incentive program to encourage more companies to adopt CPs. To claim the full benefit of the incentive program, companies are advised to consider constructing/reconstructing their CPs in a way that would be eligible for the highest possible CP ratings under the new system.
To make sure that the Proposed Amendment reflects the realities of the market, companies are encouraged to review the details of the Proposed Amendment as summarized below, and submit their opinion to the KFTC by September 2, 2019.
The details of the Proposed Amendment are as follows:
Amendment | Details |
(1) Requirements for Adopting CPs |
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(2) CP Rating System |
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(3) Incentives for Companies with Excellent CP Ratings |
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