[Fair Trade] Subcontracting Act Amendment Voiding Unfair Special Terms Passes the National Assembly

As one of its 2025 work plans, the Fair Trade Commission announced that it would expand the scope of direct payment by the ordering party as a safeguard against a prime contractor's inability to pay subcontract payments. Korea's Subcontracting Act has been influenced by Japan's Subcontracting Act since its enactment; however, unlike Korea's, Japan's Subcontracting Act does not provide subcontractors with a direct claim against the ordering party. Accordingly, in order to realize the legislative intent of the Subcontracting Act to protect subcontractors, and to examine how the direct claim right under Article 14 of the Subcontracting Act should be interpreted, attorney Son Gye-jun reviewed the key provisions of the direct right of action under French subcontracting law and the question of priority between subcontractors and other interested parties under Korea's Subcontracting Act.

For the first time since the introduction of the expenditure report system, the Ministry of Health and Welfare and the Health Insurance Review and Assessment Service have disclosed to the public expenditure reports detailing the provision of economic benefits. We summarize the findings of the expenditure report survey, along with their implications and the measures companies should take in response.

The franchise industry is growing rapidly, but problems of unfair trade between franchisors and franchisees continue to arise. The main issues include the forced purchase of mandatory items, the shifting of advertising costs, and unilateral contract changes, and in response the Fair Trade Commission is trending toward stronger regulation. We summarize the FTC's commitment to institutional improvement—pursuing policies such as establishing provisions for designating mandatory items and introducing consultation procedures for changing transaction terms—as well as companies' response measures.