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KFTC Closes Investigation into Alleged Unfair Subcontracting Transactions by a Software Company Without Imposing Sanctions


Amid efforts by the Korea Fair Trade Commission (the “KFTC”) to reinforce the protection of subcontractors’ technical data, including issuing guidelines on drafting written requests for technical data and related non-disclosure agreements, there has been an increasing number of cases where whether a subcontract agreement contains elements that unfairly ask subcontractors to provide their technical data in violation of the Fair Subcontract Transactions Act (the “FSTA”) has been debated.

Representing a Korean software company in the KFTC’s investigation into allegations that the subcontract agreements the company had entered into over a span of around seven years violated Article 12-3 of the FSTA, Kim & Chang obtained the KFTC’s decision to close the investigation without imposing sanctions by effectively arguing that the allegations were unwarranted. This case is significant in that our firm, amid the growing regulatory scrutiny of contractors’ requests for subcontractors’ technical data, successfully defended our client against an extensive ex officio investigation on this issue by the KFTC.