Fair Trade Commission Targets Prices... Focused Monitoring of Unfair Practices in Food and Daily Necessities

Operation of Dedicated Team for Report Center Management

Han Ki-jung, Chairman of the Fair Trade Commission.

The Fair Trade Commission (FTC) is establishing a reporting center for unfair practices such as collusion and operating a dedicated team to closely monitor these activities in order to stabilize prices. The aim is to prevent unfair price hikes or collusion that take advantage of high inflation caused by rising raw material prices, including international oil prices.

On the 30th, the FTC announced the "Market Monitoring and Competition Promotion Enhancement Plan for Livelihood Stability" with these details. First, to prevent price collusion in areas closely related to daily life such as food, clothing, housing, and daily necessities, a separate online reporting center will be established.

Starting from the 1st of next month, the FTC will operate the "Unfair Practices Reporting Center for Livelihood-Related Sectors" on its website. The reporting targets include collusive acts involving livelihood-related items and resale price maintenance practices by franchise food service companies. If collusion is confirmed through a report, whistleblowers may receive a reward of up to 3 billion KRW depending on the evidence and the level of action taken.

An FTC official stated, "Considering that employees of businesses violating the law can also be eligible for whistleblower rewards, we plan to actively encourage internal reporting as well."

Additionally, a "Market Monitoring Dedicated Team" led by an investigation manager will be activated. The dedicated team will consist of designated personnel from the Cartel Investigation Bureau, Market Surveillance Bureau, and five regional offices including Seoul. They will focus on sectors where excessive price increases relative to costs have occurred among previously colluded items, sectors maintaining previously raised prices for a significant period despite cost decreases, and sectors where reports from related ministries or internal whistleblowing have been made.

At a briefing, FTC Vice Chairman Cho Hong-seon said, "By establishing a reporting center specialized in livelihood-related sectors, the dedicated team will immediately recognize and respond to reports, thereby enhancing the effectiveness of the system."

Regarding concerns that the competition authority might be excessively intervening in prices, he said, "It has been empirically confirmed that monopolized market structures during periods of price increases are a cause of price hikes. Since the difficulties faced by the public due to rising prices are intensifying, we intend to respond more actively to unfair practices that harm livelihoods." He also stated that ongoing collusion investigations will be handled promptly.

The FTC plans to improve systems by identifying the actual conditions of monopolistic market structures and competition-restricting regulations in daily life sectors such as baking and alcoholic beverages. In the baking sector, through research projects, the FTC will analyze the current domestic baking market status, transaction structures, and factors causing price increases to prepare improvement measures that can enhance consumer welfare.

In the alcoholic beverage sector, the FTC will continue consultations to promote competition by participating in the Alcoholic Beverage Competitiveness Task Force, and through research projects, identify regulations that restrict new market entry or innovative business activities and propose improvement plans.

Last month, the consumer price index rose by 3.1% compared to the previous month, continuing a two-month streak of over 3% increases. The living cost index, which is composed mainly of frequently purchased items and closely reflects perceived inflation, rose by 3.8%. The prolonged Ukraine war followed by instability in the Middle East has led to increases in oil and various raw material prices and logistics costs, fueling inflation.

As the high inflation situation prolongs, the government is strengthening a cross-ministerial cooperation system including the FTC, which is not the main agency responsible for price control. The FTC plans to use the results of recent joint inspections on agricultural and marine products, petroleum, and information confirmed through reports from related ministries as leads for investigations.