Joo Byung-ki, chairman of the Fair Trade Commission, took the unusual step of publicly expressing regret after a court granted requests by Coupang and Hanwha (000880) to suspend the effect of FTC investigative actions. Joo said the commission will revise its internal rules and related systems to eliminate room for companies to evade its investigations.
Speaking at a press meeting marking his first year in office at the Government Complex Sejong on the 21st, Joo addressed the Seoul High Court's decisions to grant Coupang's request to suspend an on-site inspection order and Hanwha's request to suspend a document submission order. "I find this very regrettable," he said. "We plan to review our internal rules on investigations once again and consider revisions that clearly remove any room for evading inspections."
With the court ruling suspending the effect of the FTC's on-site inspection decision, the investigation has been put on hold for about a month. "In practical terms, the effectiveness of our investigation has been neutralized," Joo said. "Most laws under the FTC's jurisdiction are the last line of defense for the economically weak," he added. "The Large Retail Business Act is the last line of defense protecting the rights and interests of small business owners, and if FTC investigations cannot be carried out in practice, there is no way to protect those rights."
Responding to criticism that FTC on-site inspections may infringe on companies' right to defend themselves, Joo pushed back by explaining how the inspections are conducted. "FTC on-site inspections are carried out with the consent of the party under investigation, and they are entirely different from criminal search-and-seizure operations by police or prosecutors," he said. "There are no cases where a company has been unable to operate or has had to halt production because of an on-site inspection."
He also argued that when courts decide on suspension requests, they should weigh not only the disadvantages to companies but also the public interests that the FTC seeks to protect through law enforcement. "When judging whether an investigation infringes on a company's right to defense, it must be compared against what public interest the law protects," Joo said.
Joo raised the suspension decisions on the FTC's price redetermination orders in the same context. The Seoul High Court also granted requests to suspend price redetermination orders issued to paper and flour producers. "It is deeply regrettable that we have lost the opportunity to periodically redetermine prices and assess whether competition has been restored," Joo said. "Frankly, I have serious doubts about what irreparable harm this caused the companies." He added, "If the price redetermination orders cannot be carried out, irreparable harm could be inflicted on consumers as a whole."
He drew a line, however, at sharply expanding the FTC's investigative powers. Asked about the possibility of compulsory investigations or the introduction of special judicial police officers, Joo said, "Most of our work is carried out with good cooperation in investigations." He added, "Two cases are not enough to warrant seriously considering the introduction of special judicial police powers that we have not adopted until now."
On allegations that Coupang submitted false materials during the process of designating its controlling shareholder, Joo signaled action in line with the law and established principles. "We plan to verify the facts quickly, wrap up the investigation and take strict action," he said.
Regarding recent criticism from U.S. political circles over the Korean government's regulation of Coupang, Joo explained that bilateral talks with U.S. competition authorities focused on general discussions of issues facing the two countries and the direction of antitrust enforcement, rather than individual cases. On a push in the U.S. House of Representatives to amend legislation to restrict entry into the United States by foreign officials deemed to discriminate against American companies, he said, "Rather than responding directly, we will convey our views through the Ministry of Foreign Affairs if necessary."
Joo also rejected the argument that Korean government regulation of Coupang is discriminatory. "As an IT powerhouse, our country has had no choice but to be the most active in enforcing the law against foreign companies," he said. "Over the past 25 years, there has never been a single instance where discrimination or unfairness in our law enforcement was raised as an issue."
The commission is also pushing this year for a system to restrict market participation by businesses that repeatedly engage in collusion. The FTC is consulting with relevant ministries on revoking registrations and licenses or suspending operations of repeat colluders across roughly 20 industries, including safety sectors covered by the Fire Facilities Construction Business Act, environmental sectors under the Wastes Control Act and transport sectors under the Passenger Transport Service Act. "To dramatically eradicate repeat collusion, there needs to be a strong system that completely strips away the expected gains from collusion," Joo said.
The FTC is also pursuing structural remedies such as market exit and forced divestitures to address abuses of monopoly and oligopoly power. Responding to criticism from some quarters that structural remedies such as business transfers infringe on property rights, Joo said, "In the case of a business transfer, the present value of the future cash flows that the business generates is converted into money and sold, so property rights can be preserved." He added, "Structural remedies are a means of resolving abuses of monopoly and oligopoly power while guaranteeing property rights."
On delivery app commissions and advertising fees, Joo repeatedly stressed the need for reductions. "I believe the burden on merchants on these platforms, including advertising fees, is excessive and that the overall burden needs to come down," he said. "Regulators can play a role when prices are excessive." The FTC also plans to continue discussions with the National Assembly on special legislation aimed at lowering cost burdens in the delivery app market.
