[Editorial] The KFTC Should Move Beyond Business Pressure and Fine-Centered Policies to Promote Free Competition

- The controversy over the Fair Trade Commission’s view of businesses and its regulatory policies, brought to light during the National Assembly audit, should serve as an opportunity for a broad overhaul of fair trade policy

Controversy surrounding the Fair Trade Commission’s view of businesses and its fair trade policies is surfacing during the National Assembly audit. At the National Assembly’s Political Affairs Committee audit on the 12th, the Commission’s perception of large corporations and its methods of investigation and sanctions came under scrutiny. On the 13th, opposition members of the Political Affairs Committee called for the chairperson’s resignation. This controversy should serve as an opportunity to comprehensively reexamine the Fair Trade Commission’s regulation-centered policy management.

The Fair Trade Commission is not an institution that exists to control businesses or sanction specific business groups. Its fundamental role is to establish a free and fair competitive order. If preconceived notions about firm size or ownership structure influence law enforcement, the neutrality and credibility of policy will inevitably be undermined.

The recent trend toward imposing larger surcharges and strengthening sanctions by the Fair Trade Commission also requires reconsideration. This year, it decided to impose surcharges of KRW 408.3 billion for sugar cartelization, approximately KRW 671.0 billion for flour cartelization, and approximately KRW 747.6 billion for starch and starch syrup cartelization. The surcharges in these three cases alone exceed KRW 1.8 trillion.

Sanctions are necessary for clear anticompetitive conduct such as cartelization, but the mere fact that surcharge amounts are increasing is not, in itself, an achievement of fair trade policy. The appropriateness and proportionality of sanctions must be ensured by considering the seriousness of the violation, its anticompetitive effects, and any unjust gains.

Moves to institutionally raise the level of sanctions are also concerning. Last April, the Fair Trade Commission raised the lower end of the standard surcharge rate and the level of additional penalties for repeat violations, while reducing the scope for mitigation. Despite the stated goal of deterring illegal conduct, across-the-board strengthening of sanctions may fail to sufficiently reflect the degree of corporate responsibility and the particular circumstances of individual cases.

The expansion of direct regulation and intervention in the market is also problematic. The Fair Trade Commission has raised the need for special legislation including a cap on delivery app fees and for legislation regulating online platforms. However, administrative control over prices and fees can lead to cost pass-through, lower service quality, and reduced market entry by new businesses.

The Fair Trade Commission’s investigation and sanctions procedures also need improvement. During this National Assembly audit, controversy arose over whether it was appropriate to mention externally a case that had not yet been decided by the Commission. If the possibility of sanctions is highlighted before a company’s legal violation has been confirmed, it can cause unnecessary harm to the company’s reputation and business activities.

Above all, the standard for evaluating the performance of fair trade policy must change. More important than the number of investigations or the amount of surcharges imposed are the revitalization of market competition and the enhancement of consumer welfare. Policy capacity should be focused on minimizing ex ante intervention in companies’ autonomous management activities and eliminating unreasonable barriers to entry.

The Fair Trade Commission should use this National Assembly audit as an opportunity to establish the neutrality and objectivity of law enforcement. It should increase the proportionality and transparency of the surcharge calculation system and closely examine the economic ripple effects of new legislation such as platform regulation. It is also important to guarantee companies’ rights of defense and due process in investigation and deliberation procedures.

The role of the Fair Trade Commission is not to control businesses, but to establish a free and fair competitive order. Taking this controversy as an opportunity, the Chair of the Fair Trade Commission should fully review policies centered on regulatory expansion and surcharges and pursue reforms consistent with the principles of the market economy. The goal of fair trade policy should not be more regulation and larger surcharges, but freer competition and greater consumer welfare.

2026. 10. 15.

Center for Free Enterprise (CFE)

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Original title: [논평] 공정위, 기업 압박·과징금 중심 정책 벗어나 자유로운 경쟁 촉진에 나서야

Author: Center for Free Enterprise (CFE)

Date: 2026-10-15

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=comment&pn=1&idx=29630