The amendments to the Rules on the Korea Fair Trade Commission (the “KFTC”)’s Hearing Operation and Case Handling Procedure (the “Case Handling Rules”) and Rules on Consent Decree Operation and Procedures (the “Consent Decree Rules”), which were proposed by the KFTC and received public comments from April 5 to April 26, 2021, took effect on May 20, 2021 (the “Amendments”).
The Case Handling Rules and Consent Decree Rules were amended as a follow-up measure to facilitate the effective enforcement of the Monopoly Regulation and Fair Trade Law (the “FTL”) which was amended as of May 19, 2020 and took effect on May 20, 2021.
The amended Case Handling Rules include (i) the starting date of the statute of limitations, (ii) the respondent’s right to request access and reproduction of materials, (iii) the duty to notify the result of investigation, (iv) the restriction on investigation conducted during the deliberation and resolution stage, (v) the streamlining of presentation time and scope of attendees at the plenary session or subcommittee meeting, and (vi) the expanded scope of recipient and method of notice of commencement of the case investigation.
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Definition of “investigation commencement date” (Article 10-2 (1) and (2))
The “investigation commencement date,” which is one of the starting points of reckoning the statute of limitations for unfair collusive act, is the earliest of (i) the filing date of the report in case of a reported case, and (ii) the date of on-site investigation or the date of request for information in case of the KFTC’s ex officio investigation. -
Clarification of the respondent’s right to request access and reproduction of materials (Articles 29 (12) and 29-2)
While allowing the parties subject to investigation to request access to and copy of the Examiner’s Report and its attachments, except for trade secret materials, materials related to leniency applications and materials withheld pursuant to other laws, the KFTC has clearly specified the relevant methods and procedures. -
Detailed obligation to notify investigation results (Article 53-2 (5) and (6))
In principle, the KFTC shall notify the parties of the grounds, details and reasons for the KFTC investigation even if it decides not to take any action. -
Restriction on investigation at the deliberation/resolution stage (Article 29 (18))
The Amendments prohibit KFTC investigators from conducting on-site investigations or interviews with the parties at the deliberation and resolution stages. -
Streamlining of presentation time and scope of attendees at the plenary session or subcommittee meeting (Article 40 (2), Article 34 (1))
The Amendments allow the Chairperson to limit the presentation time to an appropriate extent in order to lead the plenary meeting and subcommittee meeting more effectively. The Amendments expand the scope of attendees of the plenary session or sub-meeting to members of the committee. However, to delineate the function of the investigation and deliberation, the members of the deliberation management office will be excluded. -
Expanded scope of recipients of the notice of commencement of case examination (Article 11 (4))
The Amendments expand the scope of those who need to be informed of the commencement of the case to include not only the respondent but also the complainant. It also diversifies the methods by which the notice is to be provided, for example, by utilizing text messages in addition to written notice.
On the other hand, the amended Consent Decree Rules designate the Korea Fair Trade Mediation Agency and the Korea Consumer Agency as entrusted institutions for the implementation and management of the consent decree system (Article 14-2), and provided the KFTC with the authority to oversee and supervise the entrusted institutions and to revoke or suspend their activities, if they are deemed illegal or unfair (Article 14-3). In addition, the Consent Decree Rules allow the KFTC to provide, at the request of the entrusted institution, necessary materials and resources to those entrusted institutions to conduct their delegated activities (Article 14-4), and the head of the entrusted institution is required to report quarterly to the KFTC in writing on the status of compliance with the consent decrees (Article 14-5).
Implications
The amended Case Handling Rules are expected to facilitate the enforcement of the amended FTL, which enhances the right of defense of the respondent, and increase clarity and transparency in the overall process of case handling. Furthermore, the amended Consent Decree Rules are expected to allow more competent management and thorough post-monitoring of the implementation of consent decrees. Companies that are subject to the KFTC’s investigation and that are required to implement the remedial measures under a consent decree need to be fully aware of the above Amendments and carefully assess how the KFTC will implement the Amendments.
