Fair Trade Mediation Agency, "22,000 Disputes Resolved Over 12 Years... Economic Impact of 754.8 Billion KRW"

2019 Dispute Mediation Receipt and Processing Proportion by Sector.

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Mediation Agency has reached 22,000 cases of dispute mediation handled in 12 years since the start of operations (February 2008). The economic achievements, including the mediation amounts and saved litigation costs, amount to 754.8 billion KRW.

The Fair Trade Mediation Agency announced on the 11th that it had handled a total of 22,406 cases by 2019, 12 years after starting operations in February 2008. This is about four years after surpassing 10,000 cumulative dispute mediation cases around November 2015.

Last year, 3,032 cases were received, and including ongoing cases, a total of 3,014 cases were handled. By sector, subcontracting transactions accounted for the largest number with 1,145 cases, followed by general unfair trade transactions (918 cases), franchise business transactions (656 cases), terms and conditions (176 cases), agency transactions (85 cases), and large-scale distribution transactions (34 cases).

In the subcontracting payment field, where a total of 1,145 cases were handled, unpaid-related acts were the most common with 777 cases (67.9%), followed by unfair subcontract payment decision-related acts with 82 cases, and unfair cancellation of consignment-related acts with 74 cases. In the general unfair trade transaction field, among a total of 918 cases, acts related to providing disadvantages were the most frequent with 572 cases (62.3%), followed by refusal of transactions with 120 cases, and interference with business activities with 27 cases.

The average case processing period was 49 days, slightly longer than the previous year (46 days). The statutory period is 60 days, and it can be extended to 90 days if both parties agree.

The economic achievements from mediation settlements last year totaled 116.1 billion KRW, exceeding 100 billion KRW for two consecutive years following 2018. The economic achievement per dispute mediation settlement case was 87.65 million KRW, a 21% increase compared to the previous year (72.32 million KRW).

Notably, the average economic achievements increased significantly in the large-scale distribution transaction and terms and conditions sectors. The average economic achievement in large-scale distribution transactions was 73.69 million KRW, a 317% increase compared to the previous year (17.66 million KRW), and for terms and conditions, it was 15.89 million KRW, a 260% increase compared to the previous year (4.41 million KRW).

An official from the Mediation Agency explained, "It is understood that the demand for damage relief from businesses seeking to resolve disputes in the relatively low-application sectors of large-scale distribution transactions and terms and conditions through the agency’s mediation system has increased. In particular, in the terms and conditions sector, there has been a sharp rise in dispute applications related to online advertising agency contracts, where recently, large portal companies were impersonated to induce contract signing, and upon contract termination requests, refusals or excessive penalties were demanded. This appears to have been reflected in the economic achievements from resolving such disputes."