Korea moves to strip registrations from two-time cartel offenders in 17 industries

Fines were rising before any of this. Since the Lee Jae-myung administration took office, the commission has pushed to lift the cap on cartel fines to 30% of related sales from 20% ^[9], half again the old ceiling ^[4]. This year's five major cases, against banks, sugar makers, paper companies, flour millers and starch producers, came to 2.4372 trillion won ^[10][11]. Spread across the 24 companies fined, the total works out to about 101.6 billion won each ^[1], and the four starch and starch-sugar producers averaged 186.9 billion won apiece ^[3]. The report does not give those companies' sales, so it cannot show whether fines of that size were ones they could absorb.

The revocation list points at different companies. Among the 17, the report names firefighting equipment, pharmaceutical manufacturing and imports, high-pressure gas production, electrical construction, petroleum refining and sales, waste treatment, and passenger and freight transport ^[2]. Banking, sugar, paper, flour and starch do not appear among the industries it names ^[5]. On the published list, the threat to a company's right to operate covers refiners, drugmakers and transport operators, while the companies in this year's major cases face money, or rather a great deal more money, and no registration risk ^[5][9].

The leniency change is the harder puzzle. Under the plan, a confessed cartel counts toward the repeat tally ^[8]. Take a drug importer with one finding already on its record. If it confesses to a second cartel within five years, that confession could become the ground for a request to suspend or revoke its registration ^[8]. I think that firm stops confessing. The plan also adds provincial education offices to the bodies that must submit bidding data, so procurement records can be matched against the Bid Rigging Indicator Analysis System ^[7], a detection route that does not depend on a cartel member turning itself in.

If ministries revoke on request, the threat to operate is real in 17 industries ^[3]. They could instead choose suspension, an option the revision also provides ^[3], and a suspension is a time-limited cost that a firm can price much like a fine. Or confessions could dry up among firms with a prior finding, and fewer second cartels would surface to trigger the clause at all ^[8].

I'd expect the third outcome to matter most in the first few years. Revocation deters only if cartels get found, and the plan makes self-reporting costlier for the firms closest to a second strike ^[8]. The counter-thesis is that the commission is aiming at the cartel before it forms: if two findings can end a registration, fewer firms join one, and leniency matters less ^[3]. Steady leniency filings from the 17 industries after the law passes would prove me wrong ^[2].