How Far Should Leniency Extend to Self-Reporting by Repeat Cartel Participants? Five Questions on the Proposed Leniency Amendments to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

Materials Read and Stage Confirmed

This entry examines the advance legislative notice of the proposed amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, issued by the Fair Trade Commission on September 23, 2026 as Fair Trade Commission Public Notice No. 2026-216. The instrument is a Presidential Decree, and the responsible unit is the Market Surveillance Policy Division of the Fair Trade Commission. According to the National Participatory Legislation Centre screen, the period for submitting opinions runs from September 23 to November 2, 2026, and submissions were still being accepted when the screen was checked on October 16, 2026. The screen showed one legislative opinion, but its content was not read.

Three materials were read: the body of the notice, the attached PDF of the draft statute, and the article-by-article statement of reasons for enactment and amendment. The draft statute PDF is in the form of a resolution. It names the submitter as the Prime Minister (under the jurisdiction of the Fair Trade Commission), states the review stage as before review by the Ministry of Government Legislation, and states the administrative regulation item as before regulatory review. The regulatory impact analysis field contains only a confirmation of non-attachment. This entry therefore deals with a proposal at the stage of collecting opinions. Its wording may change in the course of review by the Ministry of Government Legislation, regulatory review and deliberation by the State Council.

Sources for this section: National Participatory Legislation Centre, Advance Legislative Notice: Advance Legislative Notice of the Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Commission Public Notice No. 2026-216) · Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · Article-by-Article Statement of Reasons for Enactment and Amendment: Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hwpx)

What the Current Act and Enforcement Decree Provide

Article 44(1) of the Act in force on the reference date provides that the corrective measures under Article 42 or the surcharge under Article 43 may be reduced or exempted, and that a criminal referral under Article 129 may be waived, for a person who has voluntarily reported an unfair concerted practice and for a person who has cooperated in the investigation and the deliberation and resolution by providing evidence or by other means (including that person's current and former officers and employees). Article 44(2) provides that if a person who has received a reduction or exemption under paragraph (1) newly violates Article 40(1) within five years from the date of receiving that reduction or exemption, no reduction or exemption under paragraph (1) shall be granted. Article 44(5) delegates to Presidential Decree the scope of persons eligible for reduction or exemption and the criteria for, and extent of, reduction or exemption, among other matters. The Act read for this entry is Act No. 22043, in force from October 2, 2026.

Article 51(1) of the current Enforcement Decree, made under that delegation, sets out four categories. Subparagraph 1 provides that the first sole provider of evidence who voluntarily reports before the commencement of an investigation is exempted from both the surcharge and corrective measures if all requirements are met. Subparagraph 2 covers a person who cooperates after the commencement of an investigation. If that person meets the requirements, such as cooperating at a time when the Fair Trade Commission has not obtained the information or has not secured sufficient evidence, the surcharge is exempted and corrective measures are reduced or exempted. Subparagraph 3 provides a 50 per cent reduction of the surcharge for the second sole provider of evidence. Subparagraph 4 provides for reduction or exemption where another unfair concerted practice is reported. The Enforcement Decree read for this entry is Presidential Decree No. 36220, in force from March 24, 2026.

Article 51(2) of the current Enforcement Decree lists two cases in which leniency is not granted. Subparagraph 1 covers coercing another business operator, against its will, to participate or not to withdraw. Subparagraph 2 covers repeatedly violating Article 40(1) of the Act by engaging in unfair concerted practices during a certain period. The wording of the Enforcement Decree does not state how long that period is. The article-by-article statement of reasons explains that the specific requirement, namely engaging within five years in an unfair concerted practice that violates the corrective measure concerned, is set out in the Public Notice on the Operation of the Leniency Programme for Reduction of or Exemption from Corrective Measures, etc. for Voluntary Reporters, etc. of Unfair Concerted Practices. The original text of that Public Notice was not consulted for this entry, so its content is reported only as described by the Fair Trade Commission. Article 51(3) to (6) of the current Enforcement Decree provide for grounds for revoking leniency, exceptions to the provision of information, separate deliberation, and delegation to public notice.

Sources for this section: National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026) · National Law Information Centre, Current Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Presidential Decree No. 36220, in force from March 24, 2026) · Article-by-Article Statement of Reasons for Enactment and Amendment: Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hwpx)

What the Amendment Would Change

First, proposed subparagraph 2 of Article 51(1) would change the surcharge treatment for the first cooperating business operator after the commencement of an investigation from exemption to a 75 per cent reduction of the surcharge. The part providing that corrective measures are reduced or exempted, and the requirements in each item, remain as they are. The full exemption for the first party before the commencement of an investigation (subparagraph 1) and the 50 per cent reduction for the second party (subparagraph 3) are left untouched. The Fair Trade Commission gives two reasons. Voluntary reports made before and after the commencement of an investigation contribute to case handling to different degrees, and the change will strengthen the incentive to report before an investigation begins.

Second, proposed subparagraph 2 of Article 51(2) would redefine the ground for denying leniency. It would cover a person who has received corrective measures or an order to pay a surcharge for violating Article 40(1) of the Act and who newly violates Article 40(1) of the Act within five years from the date of receipt. The article-by-article statement of reasons explains two effects. The change replaces the Public Notice requirement of an unfair concerted practice that violates the corrective measure concerned with the case of a new violation of Article 40(1) of the Act, which broadens the scope of the restriction. It also elevates that requirement to the Enforcement Decree. Leniency would thus be denied not only where the same cartel is repeated, but also for a different cartel joined within five years after the sanction.

Third, newly proposed Article 51(3) would apply where a person eligible for leniency newly commits a violation within ten years from the date of receiving corrective measures or an order to pay a surcharge, or within ten years from the date of receiving a reduction or exemption under Article 44(1) of the Act. In that case, the reduction would be limited to only 50 per cent of the surcharge amount that would otherwise be reduced or exempted under paragraph (1). Cases falling under Article 44(2) of the Act or proposed subparagraph 2 of Article 51(2) are excluded by a parenthetical, so the provision in practice applies to repeat violations committed more than five years but within ten years later. The notice and the statement of reasons likewise describe the period as five years or more and within ten years.

Fourth, newly proposed Article 51(4) would extend the restrictions on reduction or exemption under Article 44(2) of the Act and under proposed subparagraph 2 of Article 51(2) and Article 51(3) to a person who has succeeded to the business related to the unfair concerted practice through a merger, division, division-merger, business transfer or similar transaction. The statement of reasons explains that the aim is to prevent corporate divisions or business transfers from being used to evade sanctions. Current Article 51(3) to (6) would be renumbered as paragraphs (5) to (8). Article 1 of the Addenda provides that the Decree takes effect on the date of promulgation. Article 2 of the Addenda provides that the amended provisions of Article 51(1) to (4) apply from the first application for leniency made after this Decree takes effect.

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · Article-by-Article Statement of Reasons for Enactment and Amendment: Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hwpx) · National Participatory Legislation Centre, Advance Legislative Notice: Advance Legislative Notice of the Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Commission Public Notice No. 2026-216)

What Separates Before and After the Commencement of an Investigation?

If the proposal takes effect, a first party will receive a full exemption from the surcharge if it reports before the commencement of an investigation, but only a 75 per cent reduction if it reports after. One quarter of the surcharge thus depends on a single point in time, the commencement of the investigation. Yet neither Article 44 of the Act nor Article 51 of the Enforcement Decree defines when an investigation commences. The wording of the Enforcement Decree alone does not reveal whether the reference point is an on-site inspection, a request for the submission of materials or a request to appear. This entry has not confirmed whether that criterion is found in the Public Notice.

Item (a) of subparagraph 2 of current Article 51(1) requires that, even after the commencement of an investigation, the Fair Trade Commission has not obtained the information or has not secured sufficient evidence. A party must already meet this requirement to qualify as the first party after the commencement of an investigation. The reasons for the amendment state that the degree of contribution differs before and after an investigation, but the proposal does not assess contribution separately. It divides the benefit solely by the point at which the investigation commences. In a case where an investigation has commenced but the Fair Trade Commission holds almost no evidence, how far the contribution of a cooperating business operator differs from that of an operator who reported before the investigation may vary from case to case.

From the business operator's perspective, the level of leniency can be predicted only if the operator can know at the time of reporting whether an investigation has commenced. The proposal also does not state how cases will be treated where an investigation has commenced only against other cartel participants, or where an investigation is under way only for some products within the same case. Will the point at which an investigation commences be defined in the Enforcement Decree, or left to the Public Notice? And how can a business operator confirm, at the time of reporting, which side of the line it falls on?

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · National Law Information Centre, Current Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Presidential Decree No. 36220, in force from March 24, 2026) · National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026)

Which Conduct, at What Point in Time, Counts as a New Violation Within Five Years After a Sanction?

Proposed subparagraph 2 of Article 51(2) makes a new violation of Article 40(1) of the Act within five years from the date of receiving corrective measures or an order to pay a surcharge a ground for denying leniency entirely. What Article 40(1) of the Act prohibits is agreeing to engage in, or causing another business operator to engage in, conduct that unfairly restricts competition. The proposal does not state two things. It does not say whether an agreement that began before the date of the sanction and continued after it counts as a new violation. Nor does it say whether the five years are measured from the time of the agreement or from the time its implementation ended.

Questions also remain about the starting point. The proposal does not specify whether the date of receipt means the date of the resolution or the date on which the written resolution was received. It also does not say whether the period is still counted from the date of receiving a disposition that has been revoked, in whole or in part, in administrative litigation. In addition, this subparagraph broadens the reference to the whole of Article 40(1) of the Act, so leniency is barred within five years even for a cartel in an entirely different industry or product. The chapeau of paragraph (2) states only that corrective measures and surcharges shall not be reduced or exempted. The wording of the Enforcement Decree alone therefore does not make clear whether the waiver of criminal referral, provided separately in Article 44(1) of the Act, is also barred.

Article 44(2) of the Act bars leniency for a repeat violation within five years by a person who has already received leniency. The proposal attaches the same effect, by Enforcement Decree, to a person who received only a sanction without leniency. The reasons for the amendment state that the incentive to self-report should not be excessively dampened. Even so, during those five years a business operator with a sanction history that joins a new cartel and then reports it first can obtain no reduction of or exemption from the surcharge or corrective measures. At what point in time is the conduct assessed in determining a new violation within five years? And how is a uniform bar on leniency, extending even to cartels in other markets, consistent with the programme's purpose of exposing hidden cartels?

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026) · National Participatory Legislation Centre, Advance Legislative Notice: Advance Legislative Notice of the Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Commission Public Notice No. 2026-216)

Does the Leniency Remaining for a Repeat Violation Within Ten Years Reduce Only the Surcharge?

Proposed Article 51(3) provides that only 50 per cent of the surcharge amount reduced or exempted under paragraph (1) is to be reduced. Applied according to its wording, the first party before the commencement of an investigation would receive a 50 per cent reduction instead of a full exemption from the surcharge. The first party after the commencement of an investigation would receive a 37.5 per cent reduction instead of 75 per cent, and the second party a 25 per cent reduction instead of 50 per cent. These figures were calculated for this entry by applying the wording as it stands. They do not appear in the notice or the statement of reasons.

This paragraph refers only to the surcharge and says nothing about corrective measures. Each subparagraph of paragraph (1) provides for exemption from or reduction of corrective measures together with the surcharge. The proposal does not make clear whether a repeat violator within ten years retains leniency for corrective measures unchanged or has it reduced as well. Its relationship with the waiver of criminal referral under Article 44(1) of the Act is likewise not addressed. The question remains whether corrective measures and criminal referral may still be exempted on the first-party standard while the surcharge is reduced by only half.

The period is also counted from two different starting points. Subparagraph 1 of Article 51(3) counts ten years from the date of receiving corrective measures or an order to pay a surcharge. Subparagraph 2 counts ten years from the date of receiving a reduction or exemption. Where both dates exist for the same business operator, the provision reads as applying if either falls within ten years, but the article does not spell this out. The wording also differs: subparagraph 2 of Article 51(2) uses the form "ro-buteo" (from the date of receipt), whereas subparagraph 1 of Article 51(3) uses "buteo" (from the date of receipt). How will corrective measures and the waiver of criminal referral be treated at the stage of reduced leniency? And will the two starting points and the two forms of wording be harmonised to carry the same meaning?

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · National Law Information Centre, Current Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Presidential Decree No. 36220, in force from March 24, 2026) · National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026)

Does the Delegation in the Act Provide a Basis for Extending the Restrictions to Successors to the Business?

Proposed Article 51(4) provides that not only the Enforcement Decree's own restrictions but also the restriction in Article 44(2) of the Act apply to successors. Article 44(2) of the Act is a statutory provision whose subject is the person who received a reduction or exemption, and it makes no mention of successors. Article 44(5) of the Act delegates to Presidential Decree the scope of persons eligible for reduction or exemption, the criteria for and extent of reduction or exemption, and other matters. The notice materials do not separately explain whether that delegation covers an Enforcement Decree broadening the personal scope of a denial of leniency laid down by statute.

The scope of the wording is also open. The proposal does not determine three points. First, it does not say whether the "or similar transaction" following the list of merger, division, division-merger and business transfer includes a transfer of control through an acquisition of assets or of shares. Second, it does not say whether "the business related to the unfair concerted practice" means the business of the previously sanctioned cartel or that of the new cartel. Third, it does not say whether, where only part of a business is taken over, the restriction extends to cartels in the successor's other business divisions.

The statement of reasons gives the example of a business operator caught in a cartel that divides or transfers a business division and then resumes the cartel. That example depicts the prevention of sanction evasion. The article, however, does not make an evasive purpose a requirement, so the same restriction would apply to a person who took over a business through an ordinary merger or acquisition. By what means are the statutory basis and scope of the application to successors to be confirmed? And will the same restriction apply to a succession that has no evasive purpose?

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · Article-by-Article Statement of Reasons for Enactment and Amendment: Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hwpx) · National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026)

How Are Violations and Sanction Histories Predating Entry into Force Counted?

Article 2 of the Addenda applies the amended provisions of Article 51(1) to (4) from the first application for leniency made after this Decree takes effect. The reference point is the time of the leniency application, not the time of the cartel conduct. The new standards therefore apply to a cartel that began before entry into force if the application is made after it. Because the proposed date of entry into force is the date of promulgation, there is no separate grace period in which business operators could consider the new standards and decide when to apply.

The Addenda do not separately state whether corrective measures, orders to pay a surcharge and leniency received before entry into force are included when counting the five-year and ten-year periods. Because the wording places no temporal limit on the date of receipt, the provisions may be read as including them. In that case, however, a reduction of leniency that did not exist when the sanction was imposed would attach afterwards. Will the Addenda make clearer how far sanction histories predating entry into force are taken into account, and which standards apply to cases in which an application is made immediately after entry into force?

Sources for this section: Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

Timing of Entry into Force and Remaining Issues

The proposal is at the stage where opinions are still being accepted. After submissions close on November 2, 2026, it must undergo review by the Ministry of Government Legislation, regulatory review and a resolution of the State Council. The proposed date of entry into force is only the date of promulgation, and no fixed date has yet been set. This entry makes no prediction as to whether or when the amendment will take effect.

It remains to be seen how the Public Notice will change together with the amendment of the Enforcement Decree. Current Article 51(6) (paragraph (8) under the proposal) delegates to public notice the details of the criteria for and extent of leniency and its methods and procedures. If the repeat-cartel requirement is elevated to the Enforcement Decree, the corresponding provisions of the Public Notice will need to be revised, but no draft amendment to the Public Notice accompanies the present notice materials. Nor can the current materials show whether the gaps identified in the questions above will be filled by the Public Notice. These include the criterion for the commencement of an investigation, the scope of succession, and the treatment of corrective measures at the stage of reduced leniency.

Sources for this section: National Participatory Legislation Centre, Advance Legislative Notice: Advance Legislative Notice of the Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Commission Public Notice No. 2026-216) · Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · National Law Information Centre, Current Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Presidential Decree No. 36220, in force from March 24, 2026)

What This Entry Has Not Verified

Several materials were not read: the original text of the Public Notice on the operation of the leniency programme, the regulatory impact analysis (only a confirmation of non-attachment was posted), the content of the legislative opinions submitted, Fair Trade Commission press releases, and statistics on actual leniency cases. The current provisions were verified against the original text on the National Law Information Centre. Where the notice and the statement of reasons describe the content of the Public Notice, that content is reported only as so described. Middle dots in the original statutory text have been rendered in adjusted notation.

This entry neither supports nor opposes the amendment and is not a substitute for submitting an opinion. The questions record the gaps that arise between the wording of the published proposal and the current provisions. No prediction is made as to how the proposal will ultimately be dealt with.

Sources for this section: National Participatory Legislation Centre, Advance Legislative Notice: Advance Legislative Notice of the Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Fair Trade Commission Public Notice No. 2026-216) · Draft Statute PDF: Draft Partial Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act · Article-by-Article Statement of Reasons for Enactment and Amendment: Proposed Amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hwpx) · National Law Information Centre, Current Monopoly Regulation and Fair Trade Act (Act No. 22043, in force from October 2, 2026) · National Law Information Centre, Current Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Presidential Decree No. 36220, in force from March 24, 2026)