In all fairness, FTC explains fine amounts
Published: 11 Jun. 2013, 21:38
Companies that violate the fair trade law will soon face stricter penalty standards and larger fines in line with the government’s economic democratization initiative.?
The Fair Trade Commission said yesterday that starting next week it will apply enhanced and detailed standards as the revision of the penalty imposition provision in the fair trade law takes effect.
The government watchdog said it will first determine the severity of wrongdoing based on the three standards of ”very grave,” “grave” and “less grave,” according to a scoring system.
The system will assess cases in terms of their effect on the market, the company’s market share, and additional sales and profit attributed to violation.
The score will be measured on a scale of 0 to 3.
The higher the score, the higher the fine the company will face.?
The “very grave” standard will include cases with a score of 2.2 or higher, while “grave” will deal with those between 1.4 and 2.2.
“Less grave” will indicate minor cases with a score of less than 1.4.
Cases that fall into the category of “very grave” will face a fine that amounts to 10 percent of the proceeds for unfair practices.
The fine rate for the “less grave’ group is 0.5 percent to 3 percent of related revenues.
“If a company is found to have committed a wrongdoing with bad intent, for example involving an executive, it will face an additional fine,” said Song Sang-min, a director at the FTC. “The FTC decided to unveil the renewed evaluation standards in order to help people and businesses understand how the watchdog calculates fines.”
FTC Chairman Noh Dae-lae earlier said the commission will slap companies in violation of the fair trade law with stronger measures, including larger financial penalties.
The antitrust agency collected a record amount of nearly 1 trillion won ($923 billion) in fines last year.
In 2011, the amount was 347 billion won.?
There have been complaints from businesses about unfair fines imposed by the FTC.
Haitai Beverage filed a lawsuit in February challenging the FTC’s imposition of a 2.2 billion won fine for fixing prices with other companies in 2009.
Lotte Chilsung filed a similar complaint saying a 22.6 billion won fine was exorbitant for what it had done.
The Supreme Court ruled in favor of the companies, saying the two cases should be reviewed by a high court.
BY SONG SU-HYUN [[email protected]]
The Fair Trade Commission said yesterday that starting next week it will apply enhanced and detailed standards as the revision of the penalty imposition provision in the fair trade law takes effect.
The government watchdog said it will first determine the severity of wrongdoing based on the three standards of ”very grave,” “grave” and “less grave,” according to a scoring system.
The system will assess cases in terms of their effect on the market, the company’s market share, and additional sales and profit attributed to violation.
The score will be measured on a scale of 0 to 3.
The higher the score, the higher the fine the company will face.?
The “very grave” standard will include cases with a score of 2.2 or higher, while “grave” will deal with those between 1.4 and 2.2.
“Less grave” will indicate minor cases with a score of less than 1.4.
Cases that fall into the category of “very grave” will face a fine that amounts to 10 percent of the proceeds for unfair practices.
The fine rate for the “less grave’ group is 0.5 percent to 3 percent of related revenues.
“If a company is found to have committed a wrongdoing with bad intent, for example involving an executive, it will face an additional fine,” said Song Sang-min, a director at the FTC. “The FTC decided to unveil the renewed evaluation standards in order to help people and businesses understand how the watchdog calculates fines.”
FTC Chairman Noh Dae-lae earlier said the commission will slap companies in violation of the fair trade law with stronger measures, including larger financial penalties.
The antitrust agency collected a record amount of nearly 1 trillion won ($923 billion) in fines last year.
In 2011, the amount was 347 billion won.?
There have been complaints from businesses about unfair fines imposed by the FTC.
Haitai Beverage filed a lawsuit in February challenging the FTC’s imposition of a 2.2 billion won fine for fixing prices with other companies in 2009.
Lotte Chilsung filed a similar complaint saying a 22.6 billion won fine was exorbitant for what it had done.
The Supreme Court ruled in favor of the companies, saying the two cases should be reviewed by a high court.
BY SONG SU-HYUN [[email protected]]
with the Korea JoongAng Daily
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