This file photo shows the buildings of South Korea’s major companies in Seoul. (Yonhap)
SEOUL, Dec. 27 (Korea Bizwire) — South Korea’s antitrust regulator has made it difficult for loss-making businesses with a capital erosion rate of more than 50 percent to be eligible for a reduction or exemption of fines as long as they are not expected to have serious problems continuing operations.
The Fair Trade Commission (FTC) announced that the notice on detailed standards for the imposition of fines will take effect on Thursday.
Under the current regulations, the FTC can reduce fines by up to 50 percent without other considerations if the business concerned has a capital erosion rate of more than 50 percent.
The revision, however, clarified that the FTC should also take into consideration how much difficulty the business is expected to have in continuing operations.
The move was designed to prevent the recurrence of cases similar to one involving e-commerce giant Coupang Inc. In August, the company was fined 3.3 billion won (US$2.8 million) for alleged unfair business practice.
The fine, however, was reduced by more than 50 percent since Coupang had a capital erosion rate of more than 50 percent.
The revision cleared the way for the FTC to reduce fines by 30 to 50 percent, based on considerations of a business’ financial capability to pay the fine, the degree of aggravation in market and economic conditions, the degree to which the ratio of the fine to unfair gains violates the principle of equality, and the size of the business (if they belong to the SME category).
M. H. Lee (mhlee@koreabizwire.com)
