"Attached is the slide deck I used to give an overview of the criminal enforcement system in Korean competition law. My presentation was held on November 30, 2023, at Kyoto University, in a session for the topic of 'abuse of superior bargaining position' (ASBP) in Korea and Japan.

1. Criminal Enforcement of the MRFTA
against ASBP in Korea
Sangyun Lee
Research Fellow, Korea Fair Trade Mediation Agency
Kyoto, Nov 30, 2023
Japan-Korea ASBP Workshop
Previous presentation materials…
• Comparison between Korea's MRFTA and the Japan's AMA: https://competition.tistory.com/pages/main
• Sangyun Lee, 'Abuse of Economic Dependence / Superior Bargaining Position in Korean Competition Law: From
a Comparative Perspective with Japan' (Rikkyo University, Tokyo, 2 Nov 2022) https://shorturl.at/gBC68
• Sangyun Lee, 'Some Afterthoughts on the HARMof ASBP / AED' (2022) https://shorturl.at/ahuC5
Special thanks to Yoon Hoo Kim (Yoon & Yang) for his valuable comments on the criminal enforcement of the MRFTA.

2. Background
2
…
516 1195 376 13 2 55 24 9
78.5% 2.7% 0.4% 11.5% 5.0% 1.9%
Source: KFTC, Statistical Yearbook of 2022 (2023) pp.29-30. Available at https://shorturl.at/eipv6

3. Background
3
“Filing complaints with the prosecution”: UTPs
2014 2015 2016 2017 2018 2019 2020 2021 2022
UTPs
(“unfair business practice”)
4 5 3 2 6 4 5 4 0
ASBP
(“abuse of business position”)
2 3 1 2
Tunneling
(“unfair assistance”)*
2 1 3 2 5 3
Unfair Inducement
(“unfair inducing”)
2 1 1 1
Discrimination
(“discriminative dealing”)
1 1
RPM
(“resale price maintenance”)
2
Others
(Source: KFTC’s Statistical Yearbook of 2014 - 2022 (2015-2023))
* It refers to practices where a company, especially within a Chaebol group, gives unjust preferential treatment or support to its affiliates.
It may involve the transfer of corporate assets or benefits, potentially for personal interest. It may or may not include embezzlement or breach of trust.

4. Overview
• Criminalized practices under the MRFTA
• Abuse of dominance (Art. 5)
Collusion (Art. 40) (incl. some of ‘decisions by associations,’ Art. 51)
(Unfair)* Unfair Trading Practices (Art. 45) (incl. so-called “Tunneling,” Art. 47)
- Abuse of Superior Bargaining Position (Art. 45(1), 6) is an unfair UTP
* Lessening-competition-type practices (excl. tie-ins) and RPM were decriminalized in 2020
• Criminal referral system
• In principle, the KFTC has the exclusive authority to make a criminal referral (“專屬告發權”)
• This referral enables prosecutors to charge (legal/natural) persons, thereby initiating formal criminal proceedings.
• In practice, however, prosecutors can initiate investigations regardless of the referral and may bring
criminal charges based on their own judgment through the filing request system (“義務告發要請制”).
• Under this system, the Prosecutor General and other relevant Ministers can request the KFTC to make the referral,
in response to which the KFTC is obliged to make the referral with no discretion to reject the requests.
4
Arts. 124-125
(Criminal Penalties)
Art. 125, para 4
(2 years, ₩150M)
Art. 129(1)
Request: Art. 129 (3) (4)  Obligation: Art. 129 (5)

5. 5
Article 124 (Penalty Provisions) (formerly, Art. 66)
Any of the following persons shall be punished by imprisonment with labor for up to
three years or by a fine not exceeding 200 million won:
1. A person who engages in abusive practices in violation of Article 5
9. A person who engages in illegal cartel conduct in violation of Article 40 (1) or a
person who causes such conduct;
10. A person who violates Article 45 (1) 9 or 47 (1) or (4);
12. A person who commits a prohibited act for a trade association in violation of
Article 51 (1) 1;
Article 125 (Penalty Provisions) (formerly, Art. 67)
Any of the following persons shall be punished by imprisonment with labor for up to
two years or by a fine not exceeding 150 million won:
4. A person who engages in unfair trade practices in violation of Article 45 (1)
(excluding subparagraphs 1, 2, 3, 7, and 9);
5. A person who commits a prohibited act for a trade association in violation of
Article 51 (1) 3;
(Emphasis added) (Source: KLRI https://elaw.klri.re.kr/eng_service/lawView.do?lang=ENG&hseq=61424)
MRFTA: penalty provisions…
Abuse of dominance
Collusion
Tunneling
Decisions of
Associations
Unfair UTPs (incl. ASBP)
Anticompetitive UTPs
(lessening competition)
Decisions of
Associations

6. 6
Article 128 (Joint Penalty Provisions) (formerly, Art. 70)
If the representative of a corporation (including an unincorporated organization; hereafter
in this Article, the same shall apply) or an agent or employee of, or any other person
employed by, the corporation or an individual commits any violation specified in Articles
124 through 126 in conducting the business affairs of the corporation or individual, the
corporation or individual shall be punished by a fine prescribed in the relevant Article
in addition to punishing the violator accordingly: Provided, That the foregoing shall not
apply where such corporation or individual has not been negligent in giving due
attention and supervision concerning the business affairs to prevent such violation.
MRFTA: penalty provisions…
Simply speaking, the penalty provisions apply to both natural and legal persons
FYI. Many scholars in Korea criticize the structure of Article 128, reasoning that the MRFTA basically
imposes obligations on corporate entities and outlines administrative sanctions for violations of these
obligations, and therefore, the criminal provision should be based on the responsibility of corporate
entities and then extend to individual liability. Article 128, however, reads that it adopts the opposite
approach, assuming individual responsibility as the basis and then extending it to corporations. To
my understanding, the Supreme Court seems to take the latter position, interpreting that the article
basically applies to individuals and then can extend to legal persons. See 2016Do9287.

7. Article 45 (Prohibition of Unfair Trade Practices) (formerly, Art. 23)
(1) No business entity shall perform any of the following acts that are likely to hinder fair trade
(hereinafter referred to as "unfair trade practices") or cause its affiliate or any other business entity to
perform such acts:
1. Unfairly rejecting a transaction;
2. Unfairly discriminating against the other party to a transaction;
3. Unfairly excluding a competitor;
4. Unfairly enticing a competitor's customer to make transactions with the business entity itself;
5. Unfairly force a competitor's customer to make transactions with the business entity itself;
6. Making transactions with the other party to the transaction by unfairly taking advantage of the
bargaining position of the business entity itself;
7. Making transactions under the terms and conditions that unfairly restrict business activities of the
other party to the transaction;
8. Unfairly disrupting business activities of other business entities;
9. Unfairly assisting a related party or another company by doing any of the following acts:…
10. Doing any other act that is likely to hinder fair trade.
(Emphasis added) (Source: KLRI https://elaw.klri.re.kr/eng_service/lawView.do?lang=ENG&hseq=61424)
MRFTA: UTPs provisions…
(e.g., group boycott or unilateral refusal)
(e.g., unfair or deceptive inducement)
(e.g., tie-ins)
(e.g., exclusive dealing or restrictions on regions/customers)
7

8. Article 129 (Criminal Charges) (formerly, Art. 71)
(1) Prosecution for a violation specified in Article 124 or 125 may be initiated only if the Fair Trade Commission files a criminal charge.
(2) Where it is deemed that a violation specified in Article 124 or 125 substantially hinders competition as the gravity of such violation is
objectively obvious and serious, the Fair Trade Commission shall file a criminal charge with the Prosecutor General.
(3) The Prosecutor General may notify the Fair Trade Commission of the existence of facts satisfying the requirements for filing criminal
charges under paragraph (2) and may request the Fair Trade Commission to file a criminal charge.
(4) Even if the Fair Trade Commission concludes that a case does not satisfy the requirements for filing criminal charges under paragraph (2),
the Chairperson of the Board of Audit and Inspection of Korea, the Minister of SMEs and Startups, and the Administrator of the Public
Procurement Service may request the Fair Trade Commission to file a criminal charge for other reasons, such as far-reaching social
effects, influence on the national finance, and the extent of the damage to small and medium enterprises.
(5) Upon receipt of a request for filing a criminal charge under paragraph (3) or (4), the Fair Trade Commission shall file a criminal charge
with the Prosecutor General.
(6) The Fair Trade Commission may not withdraw a criminal charge after a prosecution has been initiated.
(emphasis added) (Source: KLRI https://elaw.klri.re.kr/eng_service/lawView.do?lang=ENG&hseq=61424)
MRFTA: Criminal referral system
KFTC Prosecutors
Prosecutor General
Chairperson of the Board of Audit and Inspection of Korea
Minister of SMEs and Startups
Administrator of the Public Procurement Service
Courts
8
Request (Arts. 129(3), (4))
Referral (Art. 129(1))
when it finds that there’s an “obvious and serious” violation
of rules in terms of market competition (Art. 129(2))
when they find that there are “other reasons,” such as
societal impacts, impacts on national finance, and damages
to SMEs (Art. 129(4))
(inserted in 1996)
(inserted in 1996)
(inserted in 2013)
(inserted in 2013)
(inserted in 1996)

9. Criminalization of UTPs incl. ASBP
• Legislative Intent?
• The penalty provision (about UTPs, including ASBP) has existed since the law's initial enactment in 1980 (see Art. 15, para
4 (ASBP) and Art. 56, para 2, of the old MRFTA).
• It is generally considered that the Korean MRFAT is modeled on the Japanese AMA.
• However, there are no criminal penalties on UTPs in Japan. Question (remains unanswered): ‘Then, from where?’
• As a Last Resort (Ultima Ratio)?
• In the 1995 ACE Bed case (94Hun-ma136),* the Constitutional Court explained that:
‘For effective sanctions and prevention, criminal penalties against violations of the MRFTA (with strong psychological
deterrent effects) are necessary, particularly when the illegality is obvious and the impact of the conduct in question is so
large that it affects the entire economy and the general consumer.’
• However, for now, the gravity or seriousness consideration applies only to instances of referral.
In assessing illegality, there are no differences between criminal and administrative cases. Question: ‘Last resort?’
9
(available: https://shorturl.at/ekyU1 )
* This case was about the legitimacy of the KFTC's decision not to make a criminal referral against an allegedly unfair refusal
(UTPs). Back then, the unfair refusal was subject to criminal sanctions. In this case, the Court ruled that the KFTC's exclusive
referral right was legitimate; however, it determined that this discretion was limited, requiring the agency to make a referral in
cases of serious violations. This decision led to the 1996 amendments by which the prosecutors were given the right to request.

10. 10
… 형벌을 제외한 나머지 제재수단은 그 어느 것이나 위반행위로 인하여 초래된
경쟁제한의 상태를 배제하여 이를 회복하거나 위반행위자가 당해 위반행위로 취득한
이득의 범위 내에서 이를 박탈하는 데 그치는 것에 불과하므로, 기업범죄 내지
조직체범죄로서 소위 전형적인 화이트칼라 범죄의 하나라고 할 수 있는
공정거래법위반행위에 대한 효과적인 제재와 예방을 위하여는 시정조치나 과징금
등의 행정조치만으로는 부족하고 강한 심리강제효과를 갖는 형벌의 적극적인 활용이
요청된다 할 것이다.
한편 공정거래법위반행위는 기업의 영업활동과 밀접하게 결합되어 있거나 영업활동
그 자체로서 행하여지기 때문에, 그에 대하여 무분별하게 형벌을 선택한다면 관계자나
관계기업은 기업활동에 불안감을 느끼게 되고 자연히 기업활동이 위축될 우려가 있고,
… 공정거래법위반행위에 대한 형벌은 가능한 한 위법성이 명백하고 국민경제와
소비자일반에게 미치는 영향이 특히 크다고 인정되는 경우에 제한적으로 활용되지
아니하면 아니된다 …
… 전속고발제도는 이와 같은 제사정을 고려하여 독립적으로 구성된 공정거래위원회로
하여금 거래행위의 당사자가 아닌 제3자의 지위에 있는 법집행기관으로서 상세한
시장분석을 통하여 위반행위의 경중을 판단하고 그때 그때의 시장경제상황의 실상에
따라 시정조치나 과징금 등의 행정조치만으로 이를 규제함이 상당할 것인지 아니면 더
나아가 형벌까지 적용하여야 할 것인지의 여부를 결정하도록 함으로써 공정거래법의
목적을 달성하고자 하는 데 그 취지가 있다.
…
결국 공정거래법이 추구하는 앞서 본 법목적에 비추어 행위의 위법성과 가벌성이
중대하고 피해의 정도가 현저하여 형벌을 적용하지 아니하면 법목적의 실현이
불가능하다고 봄이 객관적으로 상당한 사안에 있어서는 공정거래위원회로서는 그에
대하여 당연히 고발을 하여야 할 의무가 있고 이러한 작위의무에 위반한 고발권의
불행사는 명백히 자의적인 것으로서 당해 위반행위로 인한 피해자의 평등권과
재판절차진술권을 침해하는 것이라고 보아야 할 것이다.
(Source: https://isearch.ccourt.go.kr/view.do?idx=00&docId=1937_010200 )
… 罰金を除くその他の制裁手段は、どれも違反行為によって生じた競争制限
の状態を排除し、それを回復するか、または違反行為者が該当違反行為で獲
得した利益の範囲内でこれを剥奪するに留まるため、企業犯罪あるいは組織
犯罪として、いわゆる典型的なホワイトカラー犯罪の一つである公正取引法
違反行為に対する効果的な制裁と予防のためには、是正措置や課徴金などの
行政措置だけでは不十分であり、強い心理的強制効果を持つ刑罰の積極的な
活用が求められるであろう。
一方で、公正取引法違反行為は企業の営業活動と密接に結びついているか、
または営業活動そのものとして行われるため、それに対して無差別に刑罰を
選択すれば、関係者や関係企業は企業活動に不安を感じ、自然と企業活動が
萎縮する恐れがある。… 公正取引法違反行為に対する刑罰は、可能な限り違
法性が明白で、国民経済と消費者一般に与える影響が特に大きいと認められ
る場合に限定的に活用されなければならない…
… 独占告発制度は、このような事情を考慮して、独立して構成された公正取
引委員会が、取引行為の当事者ではない第三者の立場にある法執行機関とし
て、詳細な市場分析を通じて違反行為の軽重を判断し、その時々の市場経済
状況の実態に応じて是正措置や課徴金などの行政措置だけで規制することが
適当か、それともさらに刑罰を適用すべきかを決定することにより、公正取
引法の目的を達成しようとする意図がある。
…
結局、公正取引法が追求する前述の法目的に照らして、行為の違法性と可罰
性が重大であり、被害の程度が顕著であり、刑罰を適用しなければ法目的の
実現が不可能であると客観的に相当と認められる事案においては、公正取引
委員会としては、そのに対して当然に告発を行うべき義務があり、このよう
な作為義務に違反した告発権の不行使は明らかに恣意的なものであり、該当
違反行為による被害者の平等権と裁判手続き陳述権を侵害するものと見なさ
れるべきである。(ChatGPT translation)
Constitutional Court 94Hun-ma136, Jul 21, 1995

11. Criminalization of UTPs incl. ASBP
• What are the differences between UTPs and criminal UTPs (incl. ASBP)? (1)
• The constitutive elements and the criteria for illegality are the same, but the intent (mens rea) differs.
• In the 2018 KNN Life case (2017Du51365),* the Supreme Court ruled that, in cases of UTPs,
when imposing criminal sanctions, one must exercise caution in recognizing the existence of 'intent.’
This intent encompasses the perpetrator’s awareness of the consequential 'unfairness’ of their conduct.
Meanwhile, in the imposition of administrative sanctions, it is permissible, in principle, to apply
sanctions (without finding the intent stricto sensu), provided there is no justification for the conduct.
11
* In this case, KNN Life, a funeral service provider in Korea, was accused of inducing rivals’ customers by offering them excessive
profits. Specifically, KNN Life offered transfer discounts to customers of rival companies, recognizing payments customers had
already made to these companies and converting their contracts to KNN Life without additional costs. While, in 2015, the KFTC
sanctioned the firm (without the criminal referral) for what it considered unfair inducement, a violation of UTP under the MRFTA,
the Seoul High Court disagreed, in 2017, viewing the conduct as not unfair. However, the Supreme Court overturned this
decision, in 2018, and remanded the case to the lower court, seeing that the conduct was unfair.
FYI. There is no information in the decision explaining why the Supreme Court addressed the issue of criminal intent (as the KFTC did not make a
criminal referral against KNN Life). However, it seems to be possible that the Bumo Sarang case might have influenced this aspect. In the Bumo
Sarang case, another funeral service provider and its former CEO faced criminal charges for similar allegations of engaging in unfair inducement
(charged in 2015). Bumo Sarang’s conduct involved providing unfair benefits and deceptive information to attract customers from rivals, which may
have had an impact on the KNN Life case. In Bumo Sarang case, the former CEO was sentenced to 6 months in prison, suspended for 2 years, in
2019.

12. 12
Supreme Court Decision 2017Du51365 Decided July 12, 2018 (Source: https://shorturl.at/ekpy5 )
… 不公正取引行為における「公正取引妨害性」も刑罰の客観的構成要
件に該当するため、行為者が認識すべき対象として「故意」の内容を
構成する。したがって、不公正取引行為の型の中で、諸事情の軽重と
分析を経て競争に及ぼす効果に関する判断までもが求められる場合や、
使用された手段の性質と実質が価格割引に類似する側面があり、競争
秩序あるいは取引秩序全体に及ぼす影響の波及効果までも総合的に考
慮すべき場合など、複雑な規範的・経済的分析と判断が必要な場合に
は、行為者に対して犯罪の構成要件である「公正取引妨害性」に関す
る「故意」を認める際には慎重であるべきである。このように故意の
証明が適切に行われたか否かを明確に審査することによって、刑事手
続きにおいて被告人が予測しがたい処罰を受ける危険を排除すること
ができる。しかし、刑事処罰と異なり、制裁的処分の場合には、原則
として行為者にその任務怠慢を正当化する事情がない限り、その処分
が可能である。したがって、不公正取引行為を原因とする制裁処分を
争う行政訴訟では、取引秩序全体に及ぼす影響など多様な事情を総合
的に考慮して不当性あるいは公正取引妨害性を判断し、これを制裁的
処分に関する厳格解釈原則、責任主義原則や罪刑法定主義に反すると
は言えない。 (ChatGPT translation)
… 불공정거래행위에서의 ‘공정거래저해성’ 역시 형벌의 객관적
구성요건에 해당하므로 행위자가 인식해야 할 대상으로서 ‘고의’의
내용을 구성한다. 따라서 불공정거래행위의 유형 중, 제반 사정의
형량과 분석을 거쳐 경쟁에 미치는 효과에 관한 판단까지도 요구되는
경우나 사용된 수단의 성격과 실질이 가격할인과 유사한 측면이 있어
경쟁질서 내지 거래질서 전반에 미치는 파급효과까지 종합적으로
고려해야 하는 경우 등 복잡한 규범적·경제적 분석과 판단이 필요한
경우에는, 행위자에게 범죄의 구성요건인 ‘공정거래저해성’에 관한
‘고의’를 인정하는 데 신중해야 한다. 이처럼 고의의 증명이 제대로
되었는지 여부를 명확하게 심사함으로써 형사절차에서 수범자가
예측하기 어려운 처벌을 받을 우려를 제거할 수 있다. 그러나
형사처벌과 달리 제재적 처분의 경우에는 원칙적으로 행위자에게 그
임무 해태를 정당화할 사정이 없는 이상 그 처분이 가능하다. 따라서
불공정거래행위를 원인으로 한 제재처분을 다투는 행정소송에서는
거래질서 전반에 미치는 영향 등 다양한 사정을 종합적으로 고려하여
부당성 내지 공정거래저해성을 판단할 수 있고, 이를 제재적 처분에
관한 엄격해석 원칙, 책임주의 원칙이나 죄형법정주의에 어긋난다고 볼
수는 없다.

13. Criminalization of UTPs incl. ASBP
• What are the differences between UTPs and criminal UTPs (incl. ASBP)? (2)
• In the case of criminal UTPs, the “instigator (敎唆犯)” is not subject to criminal punishment.
They can only be sanctioned with administrative fines and corrective orders,
according to the Supreme Court in the T-Broad ASBP case (2016Do9287).*
• One can argue that the general provisions of the Korean Criminal Act do not apply to the MRFTA criminal cases.
Criminal Act, Section 3 (Complicity), Article 31 (Instigator) (1) For a person who instigates another to commit a crime, the same
punishment shall be applied to the instigator as one who actually commits the crime;
Article 32 (Accessories) (1) Those who aid and abet the commission of a crime by another person shall be punished as accessories.
13
* In this case, T-broad Holdings and its affiliates, Hanbit Broadcasting and Seohae Broadcasting, were sanctioned by the KFTC in 2015 for,
among others, abusing their superior bargaining position over customer service centers. Specifically, T-broad Holdings directed the affiliates,
Hanbit and Seohae, to reduce the service fee paid to customer service centers that handle tasks like subscription, repair, relocation, and
telephone response for cable TV, internet, and phone services provided by T Broad. Most of their revenue came from dealings with T-broad,
which held a monopolistic position in that region.
The KFTC referred T-Broad Holdings to the criminal authority, and the case was brought before criminal courts. The courts recognized that the
firm held a superior position and that its conduct, deviating from normal trading practices, was unfair.
However, regarding its practices of directing its affiliates, the 1st instance court noted that the statute of limitations had expired. Meanwhile,
both the Seoul Regional Court and the Supreme Court, in subsequent instances, determined that such practices were not subject to criminal
sanctions under the MRFTA.

14. Supreme Court Decision 2016Do9287 Decided Feb 27, 2020
… 関連する法律条文の解釈、立法趣旨と改正経緯、刑罰法規は文言に
従って厳格に解釈・適用することが原則である点、公正取引法 [第45条
第1項] 違反に対する刑罰規定である [第125条第4号] は、事業者のため
にその違反行為を行った自然人のみが処罰対象となり、法人である事
業者は、本件のように両罰規定である [第128条] に従った別の要件を満
たした場合にのみ処罰対象となるなど、課徴金の課すに関する規定と
は規律の対象者や適用要件で区別され、これらの規定の解釈や適用が
必ずしも一致する必要はないという点等を総合すると、公正取引法 [第
125条第4号] に関する本件の争点に関して次のような結論を導き出すこ
とができる。事業者が取引相手に対して「直接取引上の地位乱用行為
を行った場合」ではなく「系列会社または他の事業者にこれを行わせ
た場合」は公正取引法 [第45条第1項第6号] の禁止規定を違反したもの
として、課徴金の課すなど公正取引法が定める別の制裁対象となり得
るが、これを理由に同法 [第125条第4号] に従った刑事処罰の対象とは
ならないと見なすべきである。
… 관련 법률조항 문언의 해석, 입법취지와 개정 경위, 형벌법규는 문언에
따라 엄격하게 해석·적용하는 것이 원칙인 점, 공정거래법 [제45조
제1항]위반에 대한 벌칙규정인 [제125조 제4호]는 사업자를 위해 그
위반행위를 한 자연인만이 처벌대상이 되고 법인인 사업자는 이
사건에서처럼 양벌규정인 [제128조]에 따른 별도의 요건을 갖춘 때에만
처벌대상이 되는 등 과징금 부과에 관한 규정과는 규율의 대상자나
적용요건에서 구별되어 위 규정들의 해석이나 적용이 반드시 일치할 필요가
없다는 점 등을 종합하면, 공정거래법 [제125조 제4호]에 관한 이 사건 쟁점에
관하여 다음과 같은 결론을 도출할 수 있다. 사업자가 거래상대방에게 ‘직접
거래상 지위남용행위를 한 경우’가 아닌 ‘계열회사 또는 다른 사업자로
하여금 이를 하도록 한 경우’는 공정거래법 [제45조 제1항 제6호]의
금지규정을 위반한 것으로서 과징금부과 등 공정거래법이 정한 별도의
제재대상이 될 수 있음은 별론으로 하고, 이를 이유로 같은 법 [제125조 제4호]
에 따른 형사처벌의 대상이 되지는 않는다고 보아야 한다.
Article 125 (Penalty Provisions) (formerly, Art. 67)
Any of the following persons shall be punished by imprisonment with labor for up to two years or by a fine not exceeding 150 million won:
4. A person who engages in unfair trade practices in violation of Article 45 (1) (excluding subparagraphs 1, 2, 3, 7, and 9)
* <Legislative Background> When the MRFTA was initially enacted in 1980, it identified only the direct perpetrators of UTPs as offenders under
the MRFTA. In 1986, the Act was amended to include those who incited others to engage in UTPs, though the penalty provision was not
amended at this time. In 1992, a provision for administrative fines specifically for UTPs was newly added to the MRFTA, applying to UTP
offenders. This provision was further revised in 2004 to encompass those who incited the offenders to engage in UTPs. However, the penalty
provision itself remained unchanged throughout these amendments. 14

15. Discussions
• The concurrent imposition of administrative and criminal sanctions – Constitutionally legitimate?
• Korean Constitution* Art. 13(1), “No citizen shall be prosecuted for an act which does not constitute a crime under the Act in force at
the time it was committed, nor shall he or she be placed in double jeopardy.”
• The Korean Constitutional Court ruled, in the SK case (2001Hun-Ka25),* that the concurrent imposition of both sanctions does not
constitute double jeopardy, as administrative sanctions (i.e., pecuniary fines) are not punishments in the sense of a criminal penalty.
• “… the surcharge pursuant to the provision at issue in this case is not punishment as the exercise of the state authority to criminal punishment
prohibited by Article 13(1) of the Constitution, and is not in violation of the principle against double jeopardy.”
• However, the Court also emphasized that this concurrency must be evaluated in light of the principle of proportionality.
• “…Permitting simultaneous imposition of criminal punishment and surcharge for one act of unjust support does not mean that the state is permitted to
impose repeated sanctions for a single unlawful act without restrictions. As the functioning of the state power burdening the citizens may not be free
from the restriction of the constitutional principle of proportionality, the aggregate of various sanctions should not be excessively grave compared with
the unlawful act that is being sanctioned.”
• Although, in this case, the Court acknowledged the broad discretion of policymakers and dismissed the claim of unconstitutionality
against the administrative fine, the question remains whether the imposition of criminal penalties, especially for UTPs is desirable.
15
(Source: https://elaw.klri.re.kr/eng_service/lawView.do?lang=ENG&hseq=1 )
* Constitutional Court 2001Hun-Ka25, Jul 24, 2003
- In this case, SK was accused of unfairly assisting its affiliates. The KFTC fined the SK for its practices. SK and its affiliates appealed the
decision, and the Seoul High Court referred the case to the Constitutional Court for a constitutionality review on the administrative fine.
- The official translation of the Court’s decision is available at https://english.ccourt.go.kr/site/eng/decisions/casesearch/caseSearch.do

16. Discussions
• What is the (desirable) objective of the enforcement of MRFTA? Problem-solving v. Retribution?
• Are the overlaps between the two authorities, the KFTC and criminal authority, desirable and beneficial?
• According to Landau’s redundancy theory,* organizational overlaps in a system can be beneficial, especially when:
(1) the failure of a single part can lead to the entire system’s failure;
(2) incremental increases in redundancy lead to exponential increases in the system’s reliability (i.e., Cost ≤ Probability x Damage);
(3) the failure of parts is random and statistically independent (i.e., independence of each part); and
(4) multiple parts can perform the same function, allowing compensation for damaged parts, albeit less efficiently (i.e., equipotentiality).
• From this view, the parallel enforcement by the criminal authority can be beneficial only in cases such as cartels or bid rigging.
In the case of UTPs (incl. ASBP), the parallel enforcement by the criminal authority is likely to result in negative and harmful redundancy.
• E.g., Unfairness only represents a contract failure, not of the market;
the error cost of criminal penalties is very high, while their contribution to the system’s reliability is limited;
the referral request system, which compels the KFTC to make a criminal referral, can result in the repetition of the criminal authority’s false positive errors
during the KFTC's subsequent assessment of illegality; and
in the case of UTPs, differently from the case of cartels, the criminal authority’s capability to replace the function of the KFTC’s enforcement is limited.
16
* Martin Landau, ‘Redundancy, Rationality, and the Problem of Duplication and Overlap’ (1969) 29(4) Public Administration Review 346, pp.350-351