Antitrust regulator's losing streak continues amid unfavorable legal decisions

The Fair Trade Commission's sign is seen on a building of the Government Complex in Sejong. Newsis

Criticism continues to mount over the Fair Trade Commission’s (FTC) punitive measures taken under the previous Moon Jae-in administration, as the antitrust regulator lost a series of lawsuits filed by companies that were sanctioned under the previous government, according to industry officials, Sunday.

Last Thursday, the Seoul High Court nullified a 3.4 billion won ($2.5 million) fine that the FTC imposed on a Taiwanese shipping company, Evergreen, in January 2022 for 15 years of alleged collusion with 22 other companies to fix freight rates for sea routes between Korea and Southeast Asian ports.

The antitrust authorities slapped a combined 96.2 billion won in fines at that time on 11 foreign shipping firms and 12 Korean companies, despite the Ministry of Oceans and Fisheries’ claim that it is unreasonable and thoughtless to prohibit “collaborative actions” that are allowed under international law.

Although the FTC emphasized that the court has yet to make decisions on fines issued to the other 22 shipping firms, industry officials expect similar rulings to be made.

“We have conducted collaborative actions over the past 40 years in compliance with the Marine Transportation Act, but the FTC ignored our claim and wrongly viewed our actions as illegal,” Korea Shipowners’ Association Vice Chairman Yang Chang-ho said. “The court ruling corrected the FTC’s wrong decision and justified our collaborative actions.”

The FTC was also ordered last Thursday to return a 3.3 billion won fine it imposed on Coupang in 2021 for the e-commerce firm’s request between 2017 and 2020 for suppliers not to offer discounts when selling their products through other online shopping malls.

A day before the court ruling on the Coupang case, SPC Group won a lawsuit it filed to get back 64.7 billion won in fines from the FTC, which had slapped it with the fine in 2020 for an allegation that the food firm’s owner family illegally offered 41.4 billion won worth of financial support to the group’s key subsidiary, Samlip, between 2011 and 2019.

On Jan. 24, the court nullified a combined 1.6 billion won fine imposed on SK Group Chairman Chey Tae-won and his company in 2021 for an allegation that his acquisition of SK siltron shares prevented the group’s holding firm from exploring a new business opportunity.

Industry officials point out that the FTC’s reckless sanctions have tarnished the brand images of Korean companies and burdened them with significant amounts of legal expenses.

“The FTC should not impose unnecessary fines so that it does not restrict a company’s creative economic activities or waste taxpayers’ money,” Rep. Song Seog-jun of the ruling People Power Party said.