Hello, this is attorney Lee Young-kyung of Cheongchul Law Firm.

On 30 July 2026, the Korea Fair Trade Commission (KFTC) announced that the examiner in the biofuel (biodiesel and bio-heavy oil) cartel case had submitted an examiner's report to the Commission on 29 July 2026 setting out the conduct found, its illegality and the recommended measures, and had served it on seven respondents (referred to below as Companies A to G) on 30 July 2026, thereby opening the deliberation stage.

This is a large-scale cartel case in which the examiner assessed the affected bidding volume at approximately KRW 9.7 trillion (KRW 7.76 trillion for biodiesel, KRW 1.95 trillion for bio-heavy oil). The investigation is complete and the examiner's report has been filed, but the Commission has not yet reached a final decision through deliberation. This column is based on the KFTC press release dated 30 July 2026, and the individual companies are anonymized as A to G. Please note that the examiner's report reflects the examiner's assessment and does not bind the Commission's final decision.

The case at a glance – examiner's report filed (deliberation opened)

The examiner concluded that seven biofuel manufacturers and sellers (A to G) engaged in organized bid rigging and volume allocation in biofuels over roughly 11 years and 3 months, and recommended corrective measures, administrative fines (surcharges) and criminal referral of both the companies and the individuals involved (current and former officers and employees) for breach of Article 40(1)(8) (bid rigging) and Article 40(1)(3) (volume restriction) of the Monopoly Regulation and Fair Trade Act. These recommendations, however, do not bind the Commission's final decision, and respondents may fully exercise their defense rights within eight weeks of receiving the report by filing written opinions and applying to inspect and copy the evidence. The KFTC plans to hold a Commission session and issue a final decision once the defense-rights procedure closes.

● Stage: examiner's report filed (submitted 29 Jul 2026 / served on respondents 30 Jul 2026)

● Cartel period found by the examiner: Dec 2013 – Feb 2025 (11 years and 3 months in total)

● Affected volume assessed by the examiner: approx. KRW 9.7 trillion (biodiesel KRW 7.76tn, bio-heavy oil KRW 1.95tn)

● Provisions applied by the examiner: Fair Trade Act Article 40(1)(8) (bid rigging) + Article 40(1)(3) (volume restriction)

● Measures recommended: corrective orders + surcharges + criminal referral of the companies and current/former officers and employees

● Defense-rights window: written opinions and document inspection within eight weeks of receiving the report

● Commission's final decision: session to be held after the defense-rights procedure (not yet determined)

1. Background – the biofuel market and the structure of the alleged cartel

Biodiesel – refiner procurement by tender under the Renewable Fuel Standard (RFS)

Biodiesel is produced by chemically converting renewable feedstock such as waste cooking oil and animal or vegetable fats, and is used to replace or be blended with diesel for diesel engines. In Korea, under the Renewable Fuel Standard (RFS), refiners must blend biodiesel into automotive diesel (4.0% as of 2026), and they procure the volumes from biodiesel manufacturers through tenders. Specifications differ by season (pour point of 20°C in summer, cold filter plugging point of 0°C in winter) and so do the feedstocks (palm oil and palm by-products in summer, recovered oil and soybean oil in winter), making the market structure relatively complex.

Bio-heavy oil – power producer procurement by tender under the Renewable Portfolio Standard (RPS)

Bio-heavy oil is a power-generation fuel produced from palm oil, palm by-products, animal and vegetable fats and biodiesel process by-products (pitch, methyl ester), used in place of bunker C oil. Under the Renewable Portfolio Standard (RPS), power producers that must supply a set share of total generation from renewables (15.0% as of 2026) procure volumes from bio-heavy oil manufacturers through tenders.

2. Conduct found by the examiner and the provisions applied

Type and scale of the alleged cartel

The examiner concluded that the seven biofuel companies A to G engaged in organized bid rigging and volume agreements for biodiesel and bio-heavy oil over an extended period of 11 years and 3 months, from December 2013 to February 2025, and assessed the bidding volume affected by the conduct at approximately KRW 9.7 trillion (biodiesel KRW 7.76 trillion, bio-heavy oil KRW 1.95 trillion). These findings and figures remain assessments at the examiner stage and will be confirmed or adjusted through the Commission's deliberation.

Provisions applied – Article 40(1)(8) and (3) of the Fair Trade Act

The examiner concluded that the conduct constitutes a very serious violation of Article 40(1)(8) (bid rigging) and Article 40(1)(3) (volume restriction) of the Fair Trade Act.

Measures recommended by the examiner

The examiner recommended to the Commission corrective measures including prohibition orders, the imposition of surcharges, and criminal referral of the companies and the individuals involved (current and former officers and employees). The Commission will now decide, after deliberation, whether the law has been breached and, if so, the specific level of sanctions.

3. The deliberation procedure after receiving the report and the respondents' defense rights

Under the KFTC's rules on case procedure, a respondent that has received the examiner's report may exercise the following defense rights.

4. Practical checklist for in-house teams that have received an examiner's report

The following sets out what in-house legal, compliance and management personnel at a respondent company should review and act on immediately.

5. FAQ for companies under cartel investigation

Q1. Once the examiner's report is filed, is the cartel already established?

No. The examiner's report merely sets out the conduct, illegality and recommended measures identified through the investigation; it does not bind the Commission's final decision. Respondents may fully exercise their defense rights through written opinions, inspection of evidence, the hearing procedure and oral submissions at deliberation, and the Commission may reach a different conclusion from the examiner's recommendation, including dismissal or mitigation.

Q2. Must a written opinion be filed within eight weeks of receiving the report?

Yes. Under the rules on case procedure, a written opinion must be filed with the case management officer within eight weeks of receiving the report (six weeks for cases assigned to a sub-committee). The deadline may be adjusted where, for example, the respondent's parent company is located overseas or the case is complex, so managing the eight-week window is the starting point for exercising defense rights.

Q3. The recommended measures include criminal referral of the company and its current and former officers and employees. Is criminal punishment possible?

Yes, it is possible. Bid rigging and volume restriction are criminal offences under the Fair Trade Act, and if the Commission adopts the examiner's recommendation and resolves to refer the case, a prosecution investigation may follow. Because individual officers and employees, not only the company, are then exposed to criminal proceedings, the potential conflict of interest between the company and the individuals should be assessed at the report stage and the need for separate counsel carefully considered.

Q4. Does the KRW 9.7 trillion figure identified by the examiner become the basis for calculating the surcharge?

No. The affected volume assessed by the examiner may differ from the actual basis for the surcharge (relevant turnover), and the final amount is determined during deliberation according to the scope of relevant turnover, the calculation period, the gravity assessment and any mitigating factors. Respondents should prepare precise rebuttal arguments on relevant turnover and gravity in their written opinion and at the deliberation stage.

Q5. The filing has been reported in the press. How should external communications be handled?

Because no final Commission decision exists at the filing stage, external communications should make clear that the case is under deliberation, that the report reflects the examiner's view rather than a final decision, and that the company intends to exercise its defense rights fully, so as to avoid creating a false impression of finality. It is important to prepare a response manual in advance so that public relations, investor relations, account management and legal all deliver a consistent message.

6. Cheongchul Law Firm's cartel investigation, examiner's report, deliberation and litigation practice

Cheongchul Law Firm has extensive advisory, investigation, deliberation and litigation experience across the statutes administered by the KFTC, including the Fair Trade Act, the Subcontracting Act and the Franchise Business Act, acting for both companies and the Commission. In particular, we provide the following services in exercising defense rights and responding to Commission deliberation after receipt of an examiner's report in a cartel case.

● Close analysis of the examiner's report and drafting of rebuttal written opinions

● Applications to inspect and copy evidence, and refinement of rebuttal arguments based on the inspected materials

● Oral advocacy at the preliminary hearing procedure and at plenary or sub-committee deliberation

● Management of criminal referral risk for companies and individuals, and response to criminal proceedings (prosecution investigation and indictment)

● Administrative litigation to revoke corrective orders, surcharges, publication orders and referrals

● Establishment of internal cartel compliance manuals and employee training

With an affected volume in the region of KRW 9 trillion, this biofuel cartel case is a large-scale matter in which the eight-week defense-rights window after the filing of the examiner's report and the response at the deliberation stage are expected to shape the final outcome. If you need assistance with notices of cartel investigation, receipt of an examiner's report, deliberation strategy, leniency review or management of criminal referral risk for your officers and employees, please feel free to contact Cheongchul Law Firm.