[Column] The Korea Fair Trade Commission's Poor Excuse Despite High Win Rate

[Sejong=Asia Economy Reporter Kwon Haeyoung] "The Fair Trade Commission's full victory rate (75.2%) is significantly higher than the full victory rate of administrative lawsuits nationwide (55.5%)."

The Fair Trade Commission (FTC) issued a press explanation on the 8th in response to two articles including "FTC's Misguided Fine of 1 Trillion Won" reported by this outlet, rebutting the claims. It was puzzling because the FTC equated its disposition, which is equivalent to a first-instance court ruling, with administrative dispositions nationwide. Unlike other administrative agencies, FTC-related administrative lawsuits end at the second instance, not the third. This is because the FTC acts both as an investigator (prosecutor) and as a judge. Losing as a prosecutor is different from having a court decision overturned by a higher court.

Despite reports that the FTC's loss rate in administrative lawsuits (including partial losses) was 24.7% from 2015 to 2019, the FTC claimed that including 'partial victories' raises the victory rate to 92.8%. By reversing partial losses to partial victories, the loss rate sharply dropped from 24.7% to 7.2%. The report that the amount of refunded fines over the past five years was 990.8 billion won was also said to be an overestimation. According to the FTC's explanation, the actual amount of refunded fines (670.3 billion won) is 32.7% of the collected amount (2.0459 trillion won, excluding Qualcomm fines) during the same period, which is still relatively high. Criticism regarding excessive sanctions and administrative resource waste is unavoidable.

However, there was no specific explanation in the statement regarding the core issue of the independence of adjudication. The only thing attached was the relevant provisions of the Fair Trade Act, stating that investigation and adjudication functions are strictly separated. The clear fact is that the chairman effectively controls the personnel rights of 7 out of 9 commissioners responsible for adjudication. Currently, among the 5 standing commissioners, 3 were promoted to first grade after being selected by Chairman Cho Sungwook, having previously been in charge of investigations at the secretariat.

Expecting internal reform from the FTC, which is self-congratulatory despite criticism from the business community, legal circles, and academia, is unrealistic. The Japanese Fair Trade Commission, the model for our FTC, abolished its adjudication function in 2014 and switched related administrative lawsuits to a three-instance system. It is time to seriously start discussions on changing the personnel rights of the commission, abolishing the adjudication function, or transitioning to a three-instance system for fair trade cases to secure the independence of adjudication at the FTC, which currently plays the dual role of judge and prosecutor.