This article was published on July 3, 2025, at 9 a.m. on the ChosunBiz RM report site.
Discussions are intensifying, primarily within the political arena, about allowing exceptions for joint actions that have been considered 'collusion' under the Fair Trade Act. The aim is to exclude industry-level consultations such as cooperative projects of small and medium-sized enterprises and production rate adjustments in the petrochemical industry from the sanctions of the Fair Trade Commission. In a situation that requires consideration of policy flexibility while adhering to the principle of autonomous competition under the competition law, the Fair Trade Commission is maintaining a cautious stance and has begun reviewing the legal system.
According to the political arena and industry on the 3rd, arguments are being raised to institutionalize different forms of collusion exceptions for small and medium-sized enterprises and the petrochemical industry. President Lee Jae-myung explicitly stated in his presidential campaign pledge book that he would exclude the cooperative projects of small and medium-sized enterprises from the application scope of the Fair Trade Act.
This pledge aligns with the Democratic Party's overall policy stance of enhancing negotiation power for businesses in a subordinate position, such as franchise owners, agency owners, and platform entry companies, by allowing collective registration and collective negotiation rights. The intent is to establish a more stable transaction base by granting collective negotiation rights to small and medium-sized enterprise cooperatives.
In February, the Fair Trade Commission commissioned a comparative legal study regarding the exclusion of competition law applications for small and medium-sized enterprises and is currently analyzing the feasibility of implementing related systems. This study aims to compare domestic and international legislative examples and law enforcement cases regarding joint actions, including those of small and medium-sized enterprise cooperatives, and to derive policy implications of exceptions to the application of competition law. Joint projects by small and medium-sized enterprise cooperatives include collective procurement of raw materials and joint supply contracts to large demand sources.
A Fair Trade Commission official noted, "The results of the study are expected to be released in September, and we are also conducting internal reviews so that we can determine the policy direction without being too late," while also stating, "No direction has been established yet, and we are analyzing the logic from both pro and con positions along with the ripple effects of applying the system."
There are concerns that small and medium-sized enterprises that are not members of the cooperatives could be at a relative disadvantage. If the exception under the Fair Trade Act is applied to joint projects, there are claims that companies outside the cooperatives may experience competitive disadvantages in pricing decisions or supply opportunities.
Separate from the small and medium-sized enterprise cooperatives, discussions about exemptions from the Fair Trade Act for the petrochemical industry have also intensified in the National Assembly. Representative Joo Cheol-hyun of the Democratic Party of Korea proposed the 'Special Bill for Strengthening Competitiveness in the Petrochemical Industry' last month. The bill includes provisions to exclude consultations among corporations regarding production rate adjustments or production cuts from the Fair Trade Commission's collusion sanctions.
The petrochemical industry has a history of sanctions from the Fair Trade Commission due to collusion on product prices. Notably, from 1994 to 2005, 10 petrochemical companies, including SK, LG CHEM, and Hyosung, were imposed a penalty surcharge of 105.1 billion won for colluding on the prices of polypropylene and high-density polyethylene.
The petrochemical industry is facing a triple whammy of declining global demand, oversupply from China, and rising energy prices. Amid growing demands from the industry for a restructuring method that can reduce production without shutting down facilities, arguments continue to allow institutional exceptions for the 'chemical integration' method, which is currently considered collusion under existing laws.
In response, the Fair Trade Commission is also reviewing the possibility of conflicts with international competition law systems. Even if exceptions are allowed domestically in industries with a high export proportion like petrochemicals, there is caution that they could still face sanctions for violations of competition laws in importing countries.
Stakeholders' perspectives on policy promotion are also divided. A lawyer specializing in fair trade at a large law firm stated, "Joint actions by small and medium-sized enterprise cooperatives have a counter-cartel nature, so policy reviews to enhance negotiation power are necessary," while also noting, "If the exception application becomes generalized, collusion among small and medium-sized enterprises may actually spread, thus caution is needed in designing the system."
Lee Jun-gil, a senior advisor at the law firm Jipyeong, emphasized, "Even if consultations among corporations are allowed domestically, if the products are exported, it is hard to avoid the application of competition laws in the importing country," adding that "even if there are exception clauses in the legislation of the importing country, it is crucial to closely examine whether the actions under Korea's laws meet those requirements."
He further added, "Since exceptions for cooperative projects of small and medium-sized enterprises are recognized to some extent even now, it would be better to first examine how to operate and supplement the existing system rather than create a new law."