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The Korea Fair Trade Commission (KFTC) is South Korea's regulatory authority for economic competition. It was established in 1981 within the Economic Planning Board. The establishing law was the Monopoly Regulation and Fair Trade Act (MRFTA), Law No. 3320, December 31, 1980. In 1994, the Fair Trade Commission and its secretariat were separated from the Economic Planning Board as an independent vice ministerial-level, central administrative organization.[1] In 1996, the status of the KFTC Chairman was elevated from vice-ministerial to ministerial level.
The original KFTC had five commissioners from 1981 to 1990. This was increased to seven commissioners from 1990 to 1997. Since 1997 the KFTC has had nine commissioners, which includes a Chairman who serves for fixed three years, a Vice-Chairman, and three other standing commissioners. There are four non-standing commissioners. Their terms can only be renewed for once. The KFTC is supported in its work by a secretariat.
Apart from the MRFTA, the KFTC enforces the following statutes:
Adhesion Contract Act, Law No. 3922, December 31, 1986.
Fair Labelling and Advertising Act, Law No. 5814, February 5, 1999.
Omnibus Cartel Repeal Act, Law No. 5815, February 5, 1999.
Door-to-Door Sales Act, Law No. 4481, December 31, 1991.
Installment Transactions Act, Law No. 4480, December 31, 1991.
Fair Subcontract Transactions Act, Law No. 3799, December 31, 1984.
Fair Franchise Transactions Act, Law No. 6704, May 13, 2002.
Consumer Protection in Electronic Commerce Act, Law No. 6687, March 30, 2002.
Notable cases
2005 Microsoft bundling
On December 7, 2005, the KFTC reached the decision to order Microsoft Corporation and Microsoft Korea, inter alia, to unbundle certain tied products, including Windows Media Player and MSN Messenger, and to impose surcharges amounting to 33 billion won (31 million US dollars) for violation of the Monopoly Regulation and Fair Trade Act (MRFTA), including the abuse of market dominant position provision.[4] On October 16, 2007, the Associated Press reported that Microsoft has stopped appealing the December 2005 decision and has withdrawn the appeal.[5]
2009 LPG supplier cartel
In 2009, the KFTC fined six liquefied petroleum gas suppliers a combined KRW 668.9 billion for fixing the prices of propane and butane. This broke the fine record, previously held by Qualcomm. SK Gas, the second to come forward, was exempted from half the fine. Its affiliate SK Energy was the first to confess and was completely exempted. This reduced the total sum to KRW 409.3 billion. The remaining four denied the charges, blaming Saudi Aramco's 60 percent share of the market supply for the similar prices.[6]
2011 Gas stations
In 2011, KFTC find four oil refiners KRW 434.8 billion in total for restricting sales to competitors' gas stations.[7]
On February 28, 2011, the KFTC alleged that fifteen online music companies decided to rig the market once non-DRM digital songs were allowed to be downloaded, starting May 2008. Non-DRM songs allow for infinite downloads, which led companies to discontinue products and certificates that catered to non-DRM songs. Thirteen of the listed companies also stopped distributing songs to services which offered infinite downloads. A representative of the FTC revealed that the companies fixed prices together, restricting consumer choice.
LOEN Entertainment's CEO Shin Won-soo, KT Music's CEO Kim Min-wook and Mnet Media's CEO Kim Sung-soo would be prosecuted separately.[8][9]
2016 Qualcomm patents
In 2016, the KFTC fined Qualcomm KRW 1 trillion for refusing to license patents to rival chipmakers.[10] This was the largest KFTC fine at that point. The company also prevented mobile phone manufacturers from using patents without purchasing chipsets. The Seoul High Court upheld the fine as well as six out of ten of the corrective orders in 2023 after the company appealed in 2017.[11]
2021 Google Android OS
In 2021, the KFTC fined Google KRW 207.4 billion for restricting smartphone manufacturers from installing alternative operating systems through anti-fragmentation agreements. Samsung Electronics and LG had violated these contracts before through modifications of Android on various devices.[12]
Most fined conglomerates
According to KFTC data from 2016, covering 2012 onwards, it had fined the following conglomerates the most:[13]
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