Hello, this is attorney Eom Sang-yoon of Cheongchul Law Firm.

An unfair concerted practice — commonly called a cartel — is a paradigmatic market-distorting act that artificially removes competition among businesses and shifts the burden onto consumers. The Monopoly Regulation and Fair Trade Act (the "Fair Trade Act") prohibits such conduct in principle and allows the authorities to impose corrective orders together with a fine calculated as a percentage of the relevant turnover.

On 29 April 2026 the Korea Fair Trade Commission (KFTC) amended the Notification on Detailed Criteria for the Imposition of Fines (KFTC Notification No. 2026-3, the "Fine Notification"), sharply raising the level of fines for violations of the Fair Trade Act, with effect from 30 April 2026. The amendment (i) substantially raises the lower bound of the base rate for every category of violation including cartels, (ii) strengthens the aggravation applied to repeat offenders, and (iii) narrows or removes discretionary mitigating factors — fundamentally reinforcing the effectiveness of economic sanctions. This post first outlines how cartel fines are calculated, then examines how far the amendment has raised the level of sanctions, and finally sets out the practical implications for businesses.

How cartel fines are calculated

Fines for cartels are determined through the calculation process laid down in Articles 43 and 102 of the Fair Trade Act and in the subordinate Fine Notification.

The first step is to determine the relevant turnover — the turnover of the goods or services directly or indirectly affected by the cartel. Where the conduct concerns a specific contract, such as bid rigging, the contract value serves as the basis. Where relevant turnover cannot readily be calculated, a separate fixed base amount applies.

Next, a base rate reflecting the gravity of the violation is applied to produce the basic calculation standard. Cartels are graded as (i) very serious, (ii) serious, or (iii) less serious violations, with a specific rate set within the range prescribed for each grade.

The basic standard then passes through a first adjustment reflecting the duration and number of violations, and a second adjustment reflecting intent or negligence and the nature and circumstances of the conduct. Aggravation for repeat violations applies at the first stage; mitigation for cooperation with the investigation and hearing, or for voluntary remediation, may apply at the second.

Finally, the adjusted standard may be reduced in light of the firm's actual ability to pay, the effect of the conduct on the market, and market or economic conditions, producing the final fine.

Key content of the amended Fine Notification (effective 30 April 2026)

The core of the amendment is a sharp increase in the level of sanctions at each stage of the above framework. Focusing on cartels:

1. Sharp increase in the lower bound of the cartel base rate

On the view that cartels distort competitive order and cause consumer harm without any efficiency gains, the amendment raises the lower bound of the base rate as follows.

The minimum cartel base rate rose from 0.5% to 10% — a twentyfold increase, and the minimum for serious cartels rose fivefold from 3.0% to 15%. As a result, any cartel now attracts a calculation standard of at least 10% of relevant turnover. The fixed base amount applied where turnover is absent or incalculable also rose sharply, from "KRW 10 million to under KRW 800 million" (less serious cartels) to "KRW 2 billion to under KRW 3 billion".

2. Stronger aggravation for repeat offenders

Previously a single violation in the preceding five years attracted 10% aggravation, rising to a maximum of 80% depending on the number of violations. Under the amendment, a single prior violation alone can attract up to 50%, and repeated violations up to 100%. For cartels specifically, a separate reinforced provision allows aggravation of up to 100% where the firm has received even one order to pay a cartel fine in the preceding ten years. In theory, a repeat cartelist could therefore face a fine approaching 40% of relevant turnover (20% × 2) — a design intended to eliminate the economic incentive to reoffend.

3. Narrowing of discretionary mitigation and removal of certain grounds

The amendment curtails the discretionary mitigating factors on which firms have relied. (i) Cooperation credit, formerly available at up to 10% each at the investigation and hearing stages for a combined 20%, is now capped at 10% in total and only where the firm cooperates consistently from investigation through to the close of the hearing. (ii) Mitigation for voluntary remediation was cut from a maximum of 30% to a maximum of 10%. (iii) The 10% mitigation for slight negligence was removed entirely.

4. Revision of the detailed evaluation table

The detailed evaluation table underpinning the assessment of gravity was also revised. In particular, no separate criteria previously existed for bid rigging where the ordering party is a provincial office of education or a school, whether public or private; the amendment adds a provision requiring such cases to be evaluated on a par with local governments.

Although the amended Notification took effect on 30 April 2026, the former Notification continues to apply to violations that ended before that date. The level of the fine can therefore differ dramatically depending on whether the conduct ended before or after the effective date.

Practical implications

For businesses generally, with the minimum cartel base rate raised to 10% of relevant turnover, the old assumption that "a fine, if imposed, will be around 1–2% of relevant turnover" must be abandoned entirely. In a cartel case with relevant turnover of KRW 10 billion, the former minimum calculation could be around KRW 50 million (0.5%); under the amendment the calculation standard is at least KRW 1 billion (10%). Once first-stage aggravation for duration and aggravation for repeat violations are applied in sequence, the final fine can reach a substantial proportion of relevant turnover — and firms with a prior cartel record face materially higher fines than before.

Given this greatly reinforced level of sanctions, businesses should (i) build internal compliance systems capable of preventing conduct carrying cartel risk — exchanging price information with competitors, discussing market allocation, sharing bid-related information; (ii) provide regular competition law training so that employees clearly understand the elements and risks of a cartel; and (iii) where a cartel is suspected, promptly consider a leniency application to secure immunity from criminal punishment and reduction of the fine. With mitigation for voluntary remediation and cooperation now sharply reduced, securing relief through leniency has become relatively more important.

Because the former Notification still applies to conduct that ended before 30 April 2026, precisely fixing the date on which the conduct ended is of considerable practical importance. Where conduct continued across the effective date, the amended Notification — and the sharply increased fine — may apply. Firms involved in a cartel should therefore assess whether the conduct can be regarded as having ended before the effective date and secure objective evidence to that effect.

That said, the amendment raises the floor of sanctions; it does not change the standards for determining whether a violation occurred. The fine actually imposed in any given case will still depend on the specific facts at each stage: calculation of relevant turnover, assessment of gravity, the first and second adjustments, and determination of the final amount. A business facing suspicion of a cartel or other Fair Trade Act violation should therefore promptly obtain expert assistance to assess relevant turnover, gravity and the need for a leniency application, and build a response strategy tailored to the case — the safest course under this markedly stricter regime.