9 out of 10 SMEs Say "Unfair Trade Penalty Should Be Used for Affected Companies"

85.9% of SMEs Report Insufficient Support for Damage Relief
Need for National-Level Protection of Companies Affected by Unfair Trade Practices

More than 9 out of 10 small and medium-sized enterprises (SMEs) believe that fines collected by the government due to unfair trade practices should be used to support the affected companies.

The Korea Federation of SMEs announced the results of a "Survey on the Introduction of a Fund for Unfair Trade Damage Compensation," conducted on 700 SMEs, on the 12th. According to the survey, among companies that experienced unfair trade practices, more than 9 out of 10 (90.5%) responded that they were unable to take separate measures for damage relief.

The reasons given included "risk of severing business ties with the offending company" at 51.9%, and both "burden of filing lawsuits for damage relief" and "difficulty in proving damages, making it unlikely to receive actual compensation" at 37.0% each.

Next, it was revealed that 81% of companies affected by unfair trade received less than 50% compensation relative to their damages. Companies that reported receiving less than 30% compensation accounted for 68.5%, while only 4.5% responded that they had fully recovered 100% or more of their damages.

Among SMEs, 85.9% responded that the current system for unfair trade damage relief is inadequate, and 92.7% said that new institutional measures are needed to support companies affected by unfair trade. The reasons included "almost no support programs such as financial aid for companies affected by unfair trade" (57.2%) and "limited scope and effectiveness of the current damage relief system" (42.1%).

As many as 95.7% of companies responded that fines collected by the government due to unfair trade should be utilized to support the affected companies. The reasons were ▲ the need for protection of affected companies at the national level (47.2%), ▲ the necessity to use fines for damage relief since they include the losses of affected companies (46.1%), and ▲ to prevent affected SMEs from going bankrupt during prolonged litigation (39.9%), among others.

Yang Chan-hoe, Head of the Innovation Growth Division at the Korea Federation of SMEs, said, “The survey results show that damage relief for SMEs affected by unfair trade is not smooth, and many SMEs feel burdened by prolonged business uncertainty and high attorney fees due to the difficulty of swift damage relief under current laws.” He added, “The fact that 95.7% of companies responded that fines should be used to support affected companies demonstrates the strong demand within the SME sector for an unfair trade damage support system. It is urgent to establish a fund and prepare support measures at the national level to prevent affected SMEs from going bankrupt during prolonged litigation.”