Samsung Electronics Applies for 'Consent Decision' to the Fair Trade Commission...Voluntary Correction of In-house Cafeteria Meal Transactions

[Asia Economy Reporter Kim Hyewon] Samsung Electronics announced on the 17th that it has applied for a 'Consent Decision' with the Fair Trade Commission.

Samsung Electronics, along with Samsung Display, Samsung SDI, Samsung Electro-Mechanics, and Samsung Welstory, has decided to voluntarily correct the unfair support case under investigation by the Fair Trade Commission.

A Samsung Electronics official explained, "We have sincerely participated in the FTC investigation process regarding the allegations and have actively demonstrated that the transactions were normal, and this stance remains unchanged. However, considering that the meal service transactions have not been diverse enough so far, we intend to promptly improve and focus on our business."

He continued, "Voluntary correction through the consent decision can quickly and effectively improve the meal service market. We expect this to immediately help small and medium-sized meal service companies struggling due to COVID-19 and other difficulties."

The consent decision system is characterized by resolving contentious issues quickly and early eliminating uncertainties for related parties. While the corrective measures for the consent decision are created by the business operator, the FTC finalizes the consent decision plan after consulting with stakeholders and relevant government departments. From the government's perspective, this allows for broad measures that not only provide simple damage relief but also include win-win plans to enhance consumer welfare and support small and medium-sized enterprises.

What is the Consent Decision System?

The consent decision system is a mechanism in fair trade-related cases where a business under investigation or review proposes corrective measures such as restoration, consumer or trading partner damage relief, and the FTC, after gathering opinions from stakeholders, recognizes the validity of these measures and promptly closes the case without determining the illegality of the incident.

It was first introduced domestically in December 2011 through an amendment to the Fair Trade Act. At the time of its introduction in Korea, major competition authorities in countries such as the United States, the European Union (EU), Germany, and Japan had already adopted and actively operated the consent decision system.

According to a thesis from Kyung Hee University Law School titled "A Study on Changes and Improvement Directions Following the Implementation of the Consent Decision System" (Master's course by Lim Hyeri), a representative case in 2008 involved European regulators investigating Microsoft for bundling its web browser based on its dominant position in the PC operating system market. Microsoft submitted a voluntary corrective plan to the European Commission to ensure consumers' freedom to choose web browsers, obtained consent, and closed the case without any separate monetary compensation or damages.

At a press conference in May, FTC Chairman Cho Sung-wook said, "(Even if the FTC issues corrective measures,) there is a problem that it takes a long time until the case is finally confirmed after appeals in court," and added, "If well operated, the consent decision can quickly compensate victims, making it a good option for the FTC," expressing a positive stance on utilizing the consent decision system.

Samsung's consent decision plan includes the phased full opening of employee cafeterias of Samsung Electronics and related parties, along with effective win-win support measures for small and medium-sized meal service companies.

The consent decision procedure follows the order: business operator's application for consent decision → decision on whether to initiate the consent decision procedure (committee review) → preparation of a provisional consent decision plan (within 30 days if initiated) → collection of stakeholder opinions (30 to 60 days) → finalization of the consent decision plan (committee decision).

On April 5, the FTC held a 'Group Meal Service Opening Ceremony' with eight large business groups including Samsung, Hyundai Motor, LG, and Hyundai Heavy Industries, announcing that they would provide new business opportunities to small and independent meal service companies. The FTC stated at the ceremony that "large business groups themselves were induced to break away from entrenched internal transaction practices with affiliates or family companies."