[Exclusive] Fair Trade Commission's Final Verdict on 'Lotok Incident' on the 15th... Bar Association's Sanction Level in Focus

[Asia Economy Reporter Eunju Lee] The Fair Trade Commission (FTC) will hold a plenary session on the 15th to decide the level of sanctions imposed by the Korean Bar Association (KBA) on members registered with the legal service platform "Lotoc." With the final review date for the FTC's "Lotoc case," which had been repeatedly postponed, now set, attention is focused on the severity of the sanctions against the KBA.

According to industry sources on the 10th, the FTC has decided to hold a plenary session on the 15th to review the KBA's violations of the Monopoly Regulation and Fair Trade Act and the Act on Fair Labeling and Advertising. The FTC examiners view the KBA's policy of prohibiting lawyers from joining Lotoc and disciplining those who violate this as an act prohibited for business associations under the Fair Trade Act, which also restricts free labeling and advertising activities.

Originally, the FTC planned to review and decide on the level of sanctions against the KBA by October last year, but postponed the plenary session twice at the KBA's request. As a result, the delay in the FTC's conclusion has caused some negative side effects. The KBA held disciplinary committees for lawyers registered with Lotoc and imposed disciplinary measures such as fines.

However, since the FTC has announced a focused investigation on business associations that hinder newly entering platforms in the market this year, there is growing speculation that heavy sanctions may be imposed on the KBA. A senior FTC official stated, "We will focus our investigation on obstructive acts that hinder platform market innovation, such as those by lawyer associations in conflict with Lotoc or the Medical Association, which clashed with Gangnam Unni." This was also included in the work report conducted last month. The FTC can impose corrective measures and fines up to 1 billion KRW for prohibited acts by business associations. In cases of violations of the Fair Labeling and Advertising Act, fines may be imposed within a range not exceeding 2% of sales revenue.

Meanwhile, recently, political circles have actively intervened to mediate the conflict between the KBA and Lotoc, increasing pressure on the KBA. Last month, the Office for Government Policy Coordination's Regulatory Reform Office, the Ministry of Justice, and Law&Company gathered to hold a closed-door discussion on mediation measures related to the Lotoc incident. This is the first time the government has directly intervened in the Lotoc case. Previously, the People Power Party's Regulatory Reform Promotion Team (led by Hong Seok-jun) also collected opinions on the issue through the "Legal Startup Regulatory Innovation Issue Meeting." This case began when Law&Company, the operator of Lotoc, reported the KBA to the FTC in June 2021.