Fair Trade Criminal Litigation

The principal conduct at issue in fair trade criminal litigation includes improper concerted conduct (collusion), abuse of a market-dominant position, improper coercion of transactions, resale price maintenance, restraint of competition by business associations, and obstruction of Fair Trade Commission investigations.

For such conduct, not only the determination of illegality but also the actor's intent, plan of execution, and chain of instruction must serve as elements of criminal proof, so proof itself is not easy.

However, where specific evidence such as statements by internal officers and employees, emails, and meeting minutes is secured, the likelihood of punishment increases.

In particular, in bid-rigging cases involving large companies or unilateral coercion of transactions by a franchise headquarters, criminal punishment can become a reality on the basis of adverse statements or leaked materials alone.

The harm from fair trade criminal litigation can shake the very foundation of a company's existence, beyond legal and financial losses.

Where the representative director or executives are convicted, the company's external trust plummets, and a chain of harm may follow, including restrictions on public bidding, a downgrade of credit ratings by financial institutions, a plunge in the stock price, and the severance of dealings with partner companies.

From the company's standpoint, the key is to enhance its capacity for proactive response by, in ordinary times, building a fair trade risk management system, conducting compliance training for officers and employees, operating an internal reporting system, maintaining a manual for responding to Fair Trade Commission investigations, and engaging the legal team and outside experts.

Once the stage of fair trade criminal litigation is reached, a refined strategic approach is required, including a strategy for responding to the investigation, judgments on the submission of materials, and review of the possibility of voluntary correction.

This is conduct in which independent businesses that ought to compete with one another agree on or coordinate competitive conditions such as price, quantity, or bidding in advance.

Because this fundamentally restrains market competition, it is regarded as the most serious violation under the Monopoly Regulation and Fair Trade Act.

Example: Where construction companies determine the winning bidder in advance in a public bid, or where food and beverage companies agree on the timing of product price increases, and the like.

This is conduct in which a market-dominant business uses its position to set prices unfairly or to unfairly exclude the activities of competing businesses.

Example: Conduct in which an online platform compels discount benefits only on tenant businesses that use its own service and blocks the use of competing platforms.

This refers to conduct in which a company holding a superior bargaining position compels its counterparty to purchase unwanted products, enter into unfair contracts, and the like.

Example: where a franchise headquarters compels a franchisee to make unnecessary interior renovations or to purchase goods only from a designated supplier

This refers to conduct in which a manufacturer or supplier sets a minimum resale price for a product and compels distributors to comply with it.

Because this restricts price competition within the distribution market, it is unlawful.

Example: where a cosmetics brand compels its online retailers to accept a clause prohibiting sales below the list price

This refers to conduct in which a business entity association, such as an industry association or cooperative, restricts competition by having its members standardize prices or by prohibiting dealings with non-members.

Example: where a regional hospital association standardizes treatment fees, or jointly purchases certain medical equipment while excluding non-member hospitals

This refers to conduct in which a party submits false materials, or deliberately obstructs an investigation, in response to an on-site inspection or a request for the submission of materials by the Korea Fair Trade Commission.

Example: deleting emails and documents, or inducing officers and employees to cooperate, based on investigation information leaked in advance

1. Establishing a Risk Management System

4. A Manual for Responding to Fair Trade Commission Investigations and Systematic Preparation

5. Close Cooperation with the Legal Team and Outside Experts

6. Strategic Response at the Investigation Stage

7. Strengthening the Management of Internal Documents and Evidence

At Daeryun, attorneys specializing in fair trade and attorneys specializing in criminal matters form a task force to propose solutions suited to the client's case based on its experience in fair trade investigations and criminal litigation.

In particular, as prosecutors have recently been focusing on collusion cases and indicting them more frequently, if criminal litigation has been brought, it is advisable to respond as quickly as possible.

This firm operates a 365-day, 24-hour consultation system, so if criminal litigation has been brought or there is a risk that it may be brought, please request a consultation immediately to prepare a response strategy.

If you entrust us with a fair trade criminal litigation case, our specialist attorneys will provide one-stop legal services to protect the client's rights and defend against criminal punishment.