Unfair Trade Practice Lawyer
Unfair Trade Practice Lawyer | Understanding regulated conduct and building a response strategy
"Unfair trade practice" refers to a broad category of conduct prohibited under Article 45 of the Monopoly Regulation and Fair Trade Act (독점규제 및 공정거래에 관한 법률 제45조), covering unfair refusal to deal, discriminatory treatment, exclusionary practices, coercion, abuse of bargaining position, and unfair customer solicitation, among others. Because the statutory categories are broadly worded, whether a specific act qualifies almost always turns on economic evidence about market effects and intent, not just the literal wording. Companies contacted by the Fair Trade Commission for an on-site investigation or a request for materials need to assess exposure early, since findings can result in a corrective order, a surcharge calculated as a percentage of related sales, and in serious cases a criminal referral to prosecutors.
Unfair Trade Practice | What Counts as an Unfair Trade Practice
Article 45(1) of the Fair Trade Act lists the categories of conduct that can be treated as unfair trade practices, and the Enforcement Decree further specifies subtypes within each category. Not every instance of the listed conduct is automatically unlawful — the FTC and courts examine whether the conduct unfairly impedes fair competition or unjustly disadvantages a counterparty.
This covers refusing to transact with a specific business without justification, or treating certain trading partners less favorably in price or terms than others (독점규제 및 공정거래에 관한 법률 제45조 제1항 제1호). The key issue is usually whether there was a legitimate business reason, such as credit risk or capacity constraints, or whether the refusal was aimed at excluding a competitor.
Includes practices that unfairly interfere with a competitor's transactions or attract customers through deceptive or excessively induced means (같은 법 제45조 제1항 제3호, 제4호). Disputes often center on whether ordinary marketing crossed into misleading representation or economic pressure on distributors.
This applies to a party in a superior bargaining position — commonly a large company toward a subcontractor or franchisor toward a franchisee — imposing unreasonable burdens such as unpaid additional work, unilateral price cuts, or forced purchase of goods (같은 법 제45조 제1항 제6호). Whether a real imbalance of bargaining power existed is usually the first point of dispute.
Covers transactions that provide economic benefit to an affiliated company on markedly favorable terms compared to normal transactions, potentially bolstering a company's position through indirect means rather than open competition (같은 법 제45조 제1항 제9호). These cases frequently involve extensive internal transaction data and require careful reconstruction of what a market-rate transaction would have looked like.
Overlap With Other Fair Trade Act Provisions
Conduct investigated as an unfair trade practice sometimes overlaps with abuse of market dominance (Article 5) or unfair collaborative acts, i.e., cartels (Article 40), which carry different standards of proof and different surcharge calculation methods. Early in an investigation it is worth clarifying which provision the FTC is actually building a case under, since the defense strategy differs significantly depending on the applicable article.
Unfair Trade Practice | How an FTC Investigation Unfolds
Fair Trade Commission investigations typically begin either from a third-party complaint, an ex officio investigation, or a referral from another agency, and proceed through on-site inspection, requests for materials, and interviews before a case report is drafted.
On-Site Inspection and Document Requests
FTC investigators can visit business premises to examine documents and electronic data relevant to suspected violations, and can separately request that materials be submitted by a set date (같은 법 제81조). Companies should keep a log of exactly what was collected or requested, since disputes over the scope of an investigation sometimes become a procedural defense in themselves.
Responding to the Examiner's Report
The Examination Bureau's report on examination results sets out the alleged facts, the applicable provision, and the proposed sanction, and the company is given a chance to review it and submit a written opinion before the Commission session. This is usually the most important single opportunity to reframe the factual narrative before it hardens into a formal decision.
The Commission Hearing
At the hearing, both the Examination Bureau and the company present their positions, and the Commission members deliberate and vote on whether a violation occurred and what sanction to impose. Preparing a hearing statement that anticipates the specific questions Commission members are likely to raise, rather than repeating the written submission, tends to matter more than companies expect.
⚠ Deadline to Submit an Opinion After the Examiner's Report
Once the FTC's Examination Bureau issues a report on the examination results (심사보고서), the company generally has a limited window to submit a written opinion before the case goes to the Commission's deliberation. Missing this window can significantly limit what arguments can still be raised at the hearing.
Unfair Trade Practice | Corrective Orders and Surcharge Calculation
If the FTC finds a violation, it can issue a corrective order requiring the company to stop the conduct and take remedial measures, and in many categories of unfair trade practice it can also impose a surcharge calculated based on the sales related to the violation.
Corrective Order and Public Announcement
A corrective order can require the company to cease the conduct, take measures to restore the prior state, and in some cases publicly announce the fact of the violation (같은 법 제49조). Because a public announcement order affects reputation independently of the surcharge amount, some companies focus their defense specifically on avoiding or narrowing that part of the order.
Surcharge Base and Ratio
The surcharge is generally calculated by applying a statutory ratio to the sales amount related to the violation during the relevant period, with the ratio and any aggravating or mitigating adjustments set out in the Enforcement Decree and the FTC's own surcharge guidelines (같은 법 제50조). Disputing how the 'related sales' figure is defined — for example, whether it should include an entire product line or only the specific transactions at issue — is often where the surcharge amount can be meaningfully reduced.
Criminal Referral
Certain unfair trade practices, particularly repeated or serious violations, can result in the FTC referring the matter to the prosecution, which can lead to a separate criminal proceeding against the company or its officers (같은 법 제71조). Because a criminal referral proceeds independently of the administrative sanction, a company's response strategy sometimes needs to address both tracks at once rather than treating the Commission hearing as the end of the matter.
Unfair Trade Practice | Challenging the Commission's Decision
A company that disagrees with the Commission's decision is not without recourse — there is a structured path to seek reconsideration or judicial review, though the deadlines are strict.
Filing Directly With the Seoul High Court
Unlike most administrative disputes that start at a district court, litigation challenging an FTC decision is filed as a first-instance case directly with the Seoul High Court, which reflects the specialized and technical nature of fair trade cases (같은 법 제100조). This means the case can move to the Supreme Court in one further appeal rather than the usual three-tier structure.
What the Court Actually Reviews
The court examines both whether the underlying conduct actually meets the statutory definition of an unfair trade practice and whether the sanction — the corrective order, public announcement, or surcharge amount — was calculated and imposed within the bounds of the Commission's discretion. Because much of the underlying case relies on economic analysis prepared during the investigation, building a competing economic or factual analysis early, rather than only at the litigation stage, tends to produce a stronger record on appeal.
⚠ 60-Day Filing Deadline for an Administrative Litigation
A lawsuit challenging an FTC decision must generally be filed within 60 days of receiving the written decision, and it goes directly to the Seoul High Court rather than a district court (같은 법 제100조, 제99조). Missing this deadline generally forecloses further challenge to the decision itself.
Unfair Trade Practice | From First Contact to Resolution
Review the on-site inspection or document request received from the FTC, identify the suspected provision, and assess the company's exposure and available defenses.
Organize internal documents, contracts, and transaction data responsive to the FTC's requests, and prepare a factual timeline before any interview or further submission.
Draft and submit a written opinion responding to the Examination Bureau's report on examination results, addressing both the factual findings and the proposed sanction.
Prepare and deliver oral argument at the Commission hearing, anticipating questions from Commission members on the specific facts and market analysis.
If the decision is unfavorable, evaluate whether to seek reconsideration or file litigation with the Seoul High Court within the statutory deadline.
Unfair Trade Practice | How Fees Are Set
Generally set based on the stage at which the firm is engaged — early-stage investigation response tends to differ from fees for a full Commission hearing or litigation — and on the complexity of the underlying transactions and volume of documents involved.
Where applicable, a success fee can be structured around the concrete outcome achieved, such as a reduction in the surcharge amount or narrowing of the corrective order, rather than a guaranteed result.
Fair trade cases often require an economic expert to analyze market definition, related sales, or competitive effects; these costs are typically billed separately from the legal fee depending on the scope of analysis needed.
Covers costs such as document production, translation of foreign-language materials, and travel for on-site fact-finding, billed at actual cost.
※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.
Unfair Trade Practice | Self-Check Before You Respond
1️⃣ Received an On-Site Inspection or Document Request
- Did the investigators identify the specific provision or type of conduct under suspicion?
- Do you have a complete log of every document and data item collected or requested?
- Have you preserved relevant emails and internal communications rather than allowing routine deletion?
- Have relevant employees been briefed on what they can and cannot say during an interview?
2️⃣ Reviewing the Examiner's Report
- Does the factual narrative in the report match your own internal records?
- Is the proposed surcharge based on a related-sales figure you can dispute?
- Is there a legitimate business justification for the conduct that the report does not address?
- Have you calculated the filing deadline for your written opinion?
3️⃣ Preparing for the Commission Hearing
- Have you identified which Commission members are likely to focus on which factual issues?
- Do you have an economic analysis ready if market effects are contested?
- Is there a public announcement order component you specifically want to challenge?
- Have you considered whether a consent decree or voluntary corrective measure could resolve the case earlier?
4️⃣ After an Unfavorable Decision
- Have you confirmed the exact date the written decision was received, since the 60-day clock runs from that date?
- Have you decided whether to challenge the finding of violation, the sanction amount, or both?
- Have you gathered the economic or factual analysis needed to support litigation at the Seoul High Court?
- Are there parallel criminal referral proceedings that need a separate, coordinated response?
