FTC to penalize hagwon and cram school publications

Megastudy hagwon building at Seocho District, Seoul on Wednesday. [YONHAP]

Korea's antitrust agency is in the final stages of penalizing major private cram schools, commonly referred to as hagwon, for engaging in false advertising practices.

According to an official at the Fair Trade Commission (FTC), five major hagwon and four cram school publications are expected to face significant fines by the end of this month.

Although the specific names of the hagwon and publications have not been disclosed, local media reports have suggested that they include institutions such as Sidae Injae and Megastudy, as well as the publication Imagine C & .

These hagwon and publications are accused of false advertising, which includes exploiting parents' concerns and exaggerating the qualifications of some of their teachers who contribute to curriculum development and study guides.

Some have even falsely claimed that their teachers were involved in drafting questions for the Korean university entrance exam.

Additionally, they have exaggerated their claims about having the highest number of students admitted to medical school or having the most students enrolling in their classes.

Megastudy, for instance, reportedly promised to refund students with scholarships once they gained admission to medical school.

The FTC has the authority to impose fines of up to 2 percent of a business's revenue if they are found guilty of false advertising.

In cases involving antitrust practices, fines of up to 4 percent of the annual revenue can be imposed.

This penalty action follows more than three months of investigation by the FTC into the private education market, initiated after President Yoon Suk Yeol raised concerns about profiteering cartels in the industry.

Previous government investigations, including those conducted by the Education Ministry, have revealed instances where teachers provided leaked questions to private cram schools.

Some of these teachers were involved in creating mock versions of the Korean university entrance examination, known as the College Scholastic Ability Test (CSAT).

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]