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South Korea: Establishment of Rules on Management of and Procedures for the Consent Decree System
In connection with the consent decree system adopted on December 2, 2011, the KFTC introduced the Rules on Management of and Procedures for the Consent Decree System (the "Rules") on March 28, 2012.
Under the consent decree system, a respondent in an investigation initiated by the KFTC may voluntarily propose a corrective measure, which will then be reviewed by the KFTC in consultation with other interested parties. If the proposal is deemed reasonable, the KFTC will close the case without making a determination of liability. Similar systems are already in place and have been adopted by most competition authorities in other jurisdictions. The KFTC, however, intends to operate the consent decree system under stricter standards and scope, which are summarized as follows:
- Upon request by a respondent, the KFTC will decide whether to initiate the consent decree process by considering factors such as the need for expedient resolutions and compensation for damages. However, the consent decree system is not available for cartel cases and other clear and material violations of the FTL that are subject to criminal sanctions.
- After initiation of the consent decree process, a 30 to 60 days of public comment period will follow during which interested parties and government agencies can submit their opinions and, in particular, the KFTC will consult with the Prosecutor's Office regarding the possibility of criminal prosecution.
- Once the KFTC issues a consent decree after its deliberation and resolution procedure, any respondent who fails to comply with its own proposed corrective measure shall be subject to an enforcement fine of up to KRW 2 million per day and/or the consent decree may be vacated.
The KFTC anticipates that the system will (i) facilitate consumers to seek prompt and effective remedies from the damages incurred, (ii) promote corporations to save time and resources and prevent negative impact on the public perception and also (iii) allow the government to reduce administrative costs otherwise incurred in determining liability. Further, the KFTC believes that the system will function as an effective relief measure to address areas where significant consumer harm has occurred.
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