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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] South Korea’s Fair Trade Commission cut nearly KRW 100 billion from fines imposed on three major sugar producers in a price-fixing case, according to a recently disclosed decision document.
The ruling, issued by the full commission, shows that the regulator reduced the initial penalty calculations by 20% for each company during the adjustment process. The case involves CJ CheilJedang, Samyang Corporation, and Daehan Sugar.
As a result, CJ CheilJedang’s fine was lowered from approximately KRW 172.9 billion to KRW 138.3 billion, Samyang Corporation’s from KRW 162.8 billion to KRW 130.2 billion, and Daehan Sugar’s from KRW 159.2 billion to KRW 127.3 billion. The total reduction across the three companies amounted to roughly KRW 99 billion.
The FTC said the reduction reflected the companies’ cooperation during the investigation, including consistently acknowledging the violations and providing materials and statements that aided the authority’s assessment. Under the FTC’s penalty guidelines, companies may receive up to a 10% reduction for cooperation during the investigation phase and another 10% for facilitating efficient proceedings and admitting wrongdoing through the end of deliberations.
Notably, the commission applied the maximum reduction rates in both categories.
The document also indicates that the FTC took a relatively conservative approach when applying aggravating factors. In the case of CJ CheilJedang, a prior violation of fair trade law resulted in a 10% surcharge—the lowest within the applicable range of 10% to 20%.
In addition, the FTC applied a base penalty rate of 15%, the lower end of the 15%–20% range designated for “very serious violations,” such as cartel conduct. The final fine is determined by applying this rate to cartel-related sales and then adjusting for mitigating or aggravating factors.
Had the FTC applied the maximum base rate of 20% under otherwise identical conditions, total fines would have reached approximately KRW 528 billion—about KRW 132 billion higher than the roughly KRW 396 billion ultimately imposed.
The FTC said the cartel conduct, which lasted more than four years, inflicted significant harm on the national economy, allowed the companies to act effectively as a monopoly in setting prices, and resulted in substantial illicit gains, warranting strict sanctions despite the applied reductions.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
