Unfair Penalty Given by Fair Trade Commission

It was discovered that the Fair Trade Commission (FTC) lost in over 50 percent of its administrative litigation cases in settling penalty matters.

Also, it was pointed out that fine for a violation of the Fair Trade Law is set too high.

According to the “Closing Report of 2003” by the political committee on September 9, in 2003, among the administrative litigation cases which were caused by objections raised to the penalty that the FTC placed, the FTC lost 55.6 percent of them.

The rate of FTC defeats gradually increased: 30.0 percent in 2001, 47.1 percent in 2002, and over 50 percent in 2003.

The rate that administrative litigations were raised against FTC’s penalties also increased from 32.9 percent in 2001, 27.5 percent in 2002, and 43.2 percent in 2003.

In the report, the political committee ordered reasonable computation and imposition of penalty, enhancement of investigation and inspection ability, and guarantee of examinee’s rights of statements and protection rights by saying, “Positive efforts to revise and specify abstract and problematic articles are needed.”

The fact that the interest rate for delinquent payment of penalty for violation of Fair Trade Law is 14.6 percent annually, substantially higher than the six percent for the delinquent payment of penalty for violation of other laws including the Finance Holding Company Law and the Telecommunication Law, was also raised as another problem.

Moreover, refund interest rate, caused by lost litigations, is only 4.36 percent annually, resulting in lacking the principle of equity.

The FTC explained in a report that the rate of lost cases has temporarily risen because most of appealed cases received verdicts from Supreme Court simultaneously.

The FTC said, "Classifying cases which were ordered to adjust a little due to different standard in placing penalty as defeats is wrong.”

Yong Park parky@donga.com