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

On September 9, 2026, the Korea Fair Trade Commission (KFTC) announced that it had decided to impose corrective orders and a total surcharge of KRW 3,009 million (30억 900만 원) on six printing paper manufacturers and sellers (hereinafter “Companies A to F”) that colluded in advance on the prospective winner, cover bidders, and bid prices in six printing paper tenders issued by a particular media company between June 2021 and November 2024, and to refer two of those corporations to the prosecution. This case follows the printing paper price-fixing case sanctioned in April 2026 (Decision No. 2026-112 dated June 9, 2026), and is an instance in which the same companies were additionally found and sanctioned for restricting competition at the bidding stage as well, showing that cartel enforcement in the paper industry is being further strengthened. Cheongchul Law Firm is composed of fair trade law specialists who have both represented the KFTC in having the legality of its dispositions upheld in court and represented numerous companies in responding to investigations, hearings, and litigation concerning bid rigging and unfair collaborative acts.

This column is based on the KFTC press release dated September 9, 2026, and the names of the individual companies have been anonymized as Companies A to F.

The Disposition at a Glance – Advance Agreement on the Prospective Winner, Cover Bidders, and Bid Prices

As an extension of the price-fixing they had begun on all printing paper products, the six printing paper manufacturers and sellers (Companies A to F) agreed on the prospective winner and bid prices through pre-bid meetings or telephone contact, and carried this out, in order to prevent low-price awards and maintain a high award ratio in the printing paper tenders issued by a particular media company. As a result, they maintained an abnormally high average award ratio of approximately 96.2% (up to approximately 99.4%) during the collusion period, far exceeding the average award ratio of 87.6% during the period without collusion (2018–2020). The KFTC determined this to be an “unfair collaborative act (bid rigging)” prohibited under Monopoly Regulation and Fair Trade Act Article 40(1)8 (공정거래법 제40조 제1항 제8호), imposed corrective orders and surcharges, and referred the two corporations that led the collusion to the prosecution.

● Collusion period: June 2021 – November 2024 (approx. 3 years and 5 months, 6 tenders in total)

● Subject of collusion: Tenders for the purchase of printing paper for year-end publications and periodicals issued by a particular media company

● Result of collusion: Average award ratio of approx. 96.2% (up to 99.4%) during the collusion period vs. 87.6% during the non-collusion period

● Applicable provision: Monopoly Regulation and Fair Trade Act Article 40(1)8 (공정거래법 제40조 제1항 제8호) (bid rigging)

● Parties sanctioned: Six printing paper manufacturers and sellers (Companies A to F)

● Dispositions: Corrective orders (cease-and-desist orders) + total surcharge of KRW 3,009 million (30억 900만 원) + criminal referral of two corporations

● Background: Additional detection following the printing paper price-fixing case involving the same companies (Decision of June 9, 2026)

1. Background of the Case and Market Characteristics

Oligopolistic Structure of the Printing Paper Market

Printing paper is paper used to produce printed materials such as documents, books, magazines, calendars, and pamphlets, and is classified according to whether the surface is coated into uncoated printing paper (woodfree paper, mechanical paper, etc.) and coated printing paper (art paper, etc.). The domestic printing paper market has long been dominated by six paper manufacturers, including Companies A to F, in a two-pillar structure (centered on two corporate groups), and the combined market share of these six companies on a 2024 sales basis is approximately 95% (approximately 81% even when imported printing paper is taken into account). Such an oligopolistic structure, in which a small number of companies control the market, can heighten both the incentive for and the feasibility of collusion.

Background of the Collusion – Falling Demand and Rising Cost Pressure

As demand for printing paper continued to decline amid the spread of digital transformation, price competition among paper manufacturers intensified, and from 2020 onward manufacturing costs also rose due to the effects of COVID-19, the war in Ukraine, and rising exchange rates. In response, the six paper manufacturers began price-fixing on all printing paper products from around February 2021 with the aim of avoiding mutual competition and maximizing profits, and it was confirmed that they also took part in this bid rigging in the course of maintaining and reinforcing that arrangement.

Bidding Method – Restricted Competition / Lowest Price

The media company, as the ordering entity, purchased through tenders each year the printing paper needed to produce year-end publications (calendars, household account books, etc.) and periodicals (monthly magazines, pamphlets, etc.). Only companies meeting certain qualification requirements, such as business track record, production, and supply capacity, could participate in these tenders, so in practice only the six paper manufacturers were eligible, and the tenders were conducted under a “restricted competition / lowest price” method that selected the company submitting the lowest bid at or below the estimated price.

2. Content of the Agreement and Outcome of the Six Tenders

Content of the Agreement – Advance Determination of the Prospective Winner, Cover Bidders, and Bid Prices

While participating in the six printing paper tenders conducted by the ordering entity between June 2021 and November 2024, the six printing paper sellers agreed in advance on the prospective winner, cover bidders, and bid prices. The participating companies differed by tender: Company A (which began production and sales in April 2024) took part only in the 6th tender, and Company F, having ceased production in 2024, did not participate in the agreement from the 5th tender onward.

Outcome – The Agreed Prospective Winner Won in Most of the Six Tenders

In accordance with the agreement, Company D in the 1st tender, Companies B and C in the 3rd and 4th tenders, and Companies A, B, and C in the 6th tender were awarded the contracts as the pre-agreed prospective winners. However, in the 2nd tender, Company D, the prospective winner, was notified by the ordering entity of a restriction on its bidding eligibility and did not participate, so the cover bidders, Companies B and C, won; and in the 5th tender, Company E, the prospective winner, was disqualified for incomplete documents, so the cover bidders, Companies B and C, won. Despite such variables, it was confirmed that the winners were on the whole determined within the agreed framework.

3. Applicable Law – Monopoly Regulation and Fair Trade Act Article 40(1)8 (Bid Rigging)

The provision applied in this case is Monopoly Regulation and Fair Trade Act Article 40(1)8 (「독점규제 및 공정거래에 관한 법률」 제40조 제1항 제8호).

4. Dispositions by Company – Corrective Orders, KRW 3 Billion in Surcharges, and Criminal Referral of Two Corporations

The KFTC decided to impose corrective orders (cease-and-desist orders) together with a total surcharge of KRW 3,009 million (30억 900만 원) on the six companies, and to refer the two corporations that led the collusion (Companies D and E) to the prosecution.

Total: Aggregate surcharge of KRW 3,009 million (30억 900만 원; the final amount is subject to partial adjustment)

5. Key Implications of This Action

Implication ① Possible Linkage Between Price-Fixing and Bid Rigging

This case is one in which the six companies, already engaged in price-fixing on all printing paper products, went on to carry out collusion in the tenders of an individual ordering entity as an extension of that arrangement. In a market where industry-wide price-fixing exists, the risk that individual tenders will also lead to agreements on the prospective winner and cover bidders is very high, so a company with a history of being investigated for price-related collusion should re-examine on its own initiative its overall history of participation in related tenders.

Implication ② An Abnormally High Award Ratio Is Strong Circumstantial Evidence of Collusion

The KFTC relied on the fact that the average award ratio during the collusion period (approx. 96.2%) far exceeded the average award ratio during the non-collusion period (87.6%) as the key basis for proving the collusion. Where the award ratio in dealings with a particular ordering entity remains consistently very high, it should be noted that this may be evaluated as circumstantial evidence of collusion and become the trigger for an investigation.

Implication ③ All Participating Companies Sanctioned Regardless of Degree of Involvement

Although some companies participated in the agreement for only some of the tenders depending on the timing of their market entry or exit (Company A only in the 6th tender; Company F not from the 5th tender onward), they were sanctioned without exception for the tenders in which they participated. This case reaffirms that a short period of involvement, or involvement in only some of the tenders, does not free a company from liability.

Implication ④ Criminal Referral of the Corporations That Led the Collusion

In this case, the KFTC did not stop at imposing surcharges on all six companies, but also referred to the prosecution the two corporations it found to have led the collusion. This is yet another example showing that bid rigging is a serious violation that can lead not only to corrective orders and surcharges but also to criminal punishment.

6. Frequently Asked Questions from Personnel at Companies Under Cartel Investigation (FAQ)

Q1. Can our company be sanctioned even though we participated in only some of the tenders?

Yes, it can. In this case as well, some companies were fined for the tender in which they took part even though, depending on the timing of their market entry or exit, they participated in the agreement for only one of the six tenders. If there is a tender in which you participated, liability for that tender is recognized as a matter of principle.

Q2. Does it count as collusion if we participated only as a cover bidder and did not actually win?

Yes, it does. Participation as a cover bidder is itself evaluated as part of the execution of the collusion, and regardless of whether you actually won, you are subject to sanctions once it is established that you joined the advance agreement and restricted competition.

Q3. If we were the prospective winner but failed to win due to circumstances on the ordering entity’s side (such as a restriction on bidding eligibility), are we free from liability?

No. The very fact of having agreed to be the prospective winner constitutes collusion, so you may be held liable regardless of whether you actually won. In this case too, there were instances in which the prospective winner was disqualified due to an eligibility restriction or incomplete documents, but the agreement itself was recognized as collusion.

Q4. How are the targets of criminal referral decided?

The KFTC decides which corporations to refer by comprehensively considering the degree to which they led the collusion, their market share, and the duration of their involvement. Under the KFTC’s established rule, the Guidelines of the Fair Trade Commission on Criminal Referral of Violations of the Monopoly Regulation and Fair Trade Act and Other Acts (독점규제 및 공정거래에 관한 법률 등의 위반행위의 고발에 관한 공정거래위원회의 지침), a score is calculated and a corporation exceeding a certain score is in principle subject to referral; in this case, too, the corporations with high market shares that were found to have led the collusion were referred. Once a referral is resolved, it leads to a criminal investigation and creates a separate risk of criminal punishment, so it is necessary from the early stage of the investigation to distinguish and address the risks of the corporation and those of individual executives and employees.

7. Cheongchul Law Firm’s Bid Rigging and Fair Trade Investigation Response and Advisory Services

Cheongchul Law Firm is composed of fair trade and cartel specialists who have both represented the KFTC in having the legality of its dispositions upheld in court and represented numerous companies in responding to KFTC investigations, hearings, and litigation across the full range of laws under the KFTC’s jurisdiction, including the Monopoly Regulation and Fair Trade Act (공정거래법), the Fair Transactions in Subcontracting Act (하도급법), and the Fair Transactions in Franchise Business Act (가맹사업법). In the areas of bid rigging, price-fixing, and unfair collaborative acts in particular, we manage corporate risk through the following services.

● Self-audits for bid rigging and price-fixing and establishment of in-house compliance manuals

● Response to KFTC on-site investigations and representation at every stage from commencement of the investigation through hearing and decision

● Representation in revocation litigation against dispositions such as corrective orders, surcharges, and criminal referrals

● Response to criminal proceedings (investigation and prosecution) following a criminal referral, with separate handling of corporate and individual executive/employee risk

● In-house training for bidding personnel at companies in oligopolistic industries such as paper, printing, and construction

This printing paper bid rigging case shows that industry-wide price-fixing can extend to collusion at the level of individual tenders, and industries with an oligopolistic market structure are especially exposed to similar risks. Corporate personnel who need a self-audit of their tender participation history, assistance in responding to a notice of investigation, a leniency review, or management of criminal risk following a referral to the prosecution are welcome to contact Cheongchul Law Firm.