Practical Issues in the Enforcement of Leniency Program in Korea

Abstract

Since its introduction in 1997, the leniency program has played an important role in Korea in detecting cartel activities that have the clandestine nature. Recently, however, its operation by the Korea Fair Trade Commission (hereinafter KFTC) gave rise to criticism among companies and practitioners, ranging from doubts over the leniency regime’s reliability or transparency to the fundamental skepticism over whether or why the leniency program itself should exist. Such criticism got intensified as statements submitted by leniency applicants have been dismissed in a number of recent cartel cases. Nevertheless, it is difficult to deny the efficacy of the leniency program, not only in detecting existing cartels but also in deterring future cartel activities. For this reason, the leniency program is indispensable for the KFTC to facilitate its investigation of cartels, which are by nature secretive. Therefore, the KFTC should continue its effort to beef up the leniency program by actively addressing practical issues that have been raised during the implementation and operation of the current leniency program. Against this backdrop, this article analyzes some practical key issues raised by the companies, the academia, and practitioners in the course of the KFTC’s implementation of the leniency program, including such issues as the reliability of leniency applicants and the interpretation of key leniency requirements such as degree of necessary evidence, termination of cartel activities, coercion, and the scope of continued and sincere cooperation. It also touches upon issues related to restricting leniency immunity against repeat offenders, joint leniency application and protecting identity of leniency applicants.