🚨 Exclusive Prosecution Right

Today Korean Social News for Beginners | 2026.02.15

0️⃣ Sugar Price-Fixing ₩400 Billion Fine and Fair Trade Law Enforcement Debate

📌 ₩400 Billion Fine for Sugar Price-Fixing…Debate Over Who Can Prosecute Heats Up

💬 Korea's Fair Trade Commission (FTC) caught three major sugar companies — CJ CheilJedang, Samyang Foods, and Daihan Jeil Sugar — secretly agreeing to raise sugar prices together. The FTC fined them a combined ₩408.3 billion and ordered them to stop. But before the FTC even finished its process, prosecutors had already charged company executives. This unusual move reignited a long-running debate about Korea's "exclusive prosecution right" — a rule that says only the FTC can send price-fixing cases to prosecutors. The president called for reform, and now a national conversation has begun about how to best enforce fair trade law.

💡 Summary

• The "exclusive prosecution right" means prosecutors can only file criminal charges in price-fixing cases if the FTC gives them the go-ahead first.
• In the sugar case, prosecutors charged executives before the FTC finished its own review — an unusual situation.
• Debate is growing over how to make enforcement stronger without putting too much burden on businesses.

1️⃣ Definition

The Exclusive Prosecution Right is a rule that allows prosecutors to file criminal charges in certain cases — like price-fixing — only after the relevant government agency (in this case, the FTC) officially reports the case to them.

Think of it this way: imagine several grocery stores secretly agree to raise the price of milk at the same time. Even if prosecutors find out, they cannot take these stores to criminal court on their own. They must wait for the FTC to say, "Yes, please prosecute this case." The idea is that the FTC, as a specialist agency in market competition, should review the case first to make sure criminal action is truly needed.

💡 Why Does This Matter?

• Price-fixing directly harms consumers by forcing them to pay more than they should.
• Under the current system, if the FTC does not act, criminal charges are nearly impossible.
• If the rule is removed, businesses could face investigations from both the FTC and prosecutors at the same time.
• This is a key debate between two important values: strong law enforcement vs. fair treatment of businesses.

2️⃣ What Happened and What Are the Key Issues?

📕 The Sugar Price-Fixing Case

• Three big sugar companies were caught fixing prices together. Here is what happened:

  • CJ CheilJedang, Samyang Foods, and Daihan Jeil Sugar secretly agreed in advance to raise sugar prices at the same time.
  • The FTC caught them and handed down a total fine of ₩408.3 billion, along with orders to stop the illegal behavior.
  • Price-fixing on sugar hurts not only regular consumers but also food companies that use sugar as an ingredient — they have to pay more for it too.
  • This is one of the biggest and most impactful price-fixing cases in Korea in recent years.

• Prosecutors filing charges first sparked the debate. Here is what made this case unusual:

  • Before the FTC formally finished its process, prosecutors had already charged the companies' executives — this almost never happens.
  • Prosecutors used a separate mechanism called the "prosecution request right" to move forward without waiting for the FTC's go-ahead.
  • This reversed the usual order of events, raising questions about whether the system is working as it should.
  • The president personally called for reform of the exclusive prosecution right, which quickly turned this into a major national issue.

📕 Arguments For and Against the Exclusive Prosecution Right

• Those who want to keep the system argue the following:

  • Price-fixing and competition law are complex. The FTC, as a specialist body, is better equipped to judge when criminal prosecution is truly needed.
  • If both the FTC and prosecutors investigate at the same time, companies face double the pressure and costs, which may be unfair.
  • The current system is linked to a "leniency program" — where companies that confess to price-fixing get reduced fines. If criminal risk increases, companies may stop confessing, making it harder to catch wrongdoing.
  • Rushing to criminal prosecution could chill normal business activity and have a negative effect on the economy.

• Those who want to change or remove the system argue the following:

  • If the FTC chooses not to act, consumers who were harmed have no way to push for criminal charges.
  • The line between FTC authority and prosecutor authority is unclear, which makes enforcement inconsistent.
  • Consumers and competitor companies harmed by price-fixing have no direct path to request criminal action.
  • Simply expanding the "prosecution request right" is not enough to fix the deeper problem.

💡 Key Issues in This Case

1. Out-of-order prosecution: Prosecutors charged executives before the FTC formally concluded — was this appropriate?
2. Authority overlap: Who should have the power to start criminal proceedings — the FTC or prosecutors?
3. Double burden on businesses: Running administrative and criminal investigations at the same time could be too much for companies to handle.
4. No voice for victims: Consumers harmed by price-fixing have no direct way to demand criminal charges.
5. Risk to leniency program: Reforming the system could reduce the incentive for companies to confess price-fixing voluntarily.

3️⃣ How Should the System Be Improved?

✅ Reforming the Exclusive Prosecution Right

• The goal is to make law enforcement stronger while keeping things fair. Key directions include:
  • In serious cases where consumer harm is clear, prosecutors could be allowed to investigate and charge on their own.
  • The "prosecution request right" could be expanded or made easier to use, so more cases can reach the criminal system.
  • The FTC and prosecutors should share information early and work together to avoid investigating the same thing twice.
  • The law should clearly spell out when the FTC leads and when prosecutors can step in.

✅ Better Protection for Victims

• People harmed by price-fixing need easier ways to get compensation. Key goals include:
  • Make it simpler for consumers and businesses to sue for damages caused by price-fixing.
  • Introduce or expand class action lawsuits so many victims can take legal action together.
  • Create stronger links between FTC fines and actual compensation for victims.
  • Any reforms should keep the leniency program working so companies still have a reason to confess.

4️⃣ Key Terms Explained

🔎 Fair Trade Act

• The Fair Trade Act is Korea's main law to protect fair competition in markets.
  • Its full name is the "Monopoly Regulation and Fair Trade Act," enacted in 1980. It covers abuse of market dominance, price-fixing (illegal joint actions), and other unfair trade practices.
  • The exclusive prosecution right has been part of this law since the beginning. The idea was that economic crimes are complex, so a specialist agency should decide when criminal prosecution is appropriate. Over time, concerns have grown that this gives the FTC too much unchecked power.
  • If a company is caught price-fixing, the FTC can fine it up to 20% of related revenue. If the case goes criminal, executives can face up to 3 years in prison or fines of up to ₩200 million. For consumers, this law serves as a shield that keeps market competition healthy.

🔎 Prosecution Request Right

• The prosecution request right softens the strict nature of the exclusive prosecution right.
  • Introduced in 1996 as a fix for the weaknesses of the exclusive prosecution right, this allows certain government officials — like the Prosecutor General, the head of the Public Procurement Service, and others — to formally ask the FTC to send a case to prosecutors.
  • If one of these officials makes such a request, the FTC is expected to comply unless there is a special reason not to. This mechanism was used in the sugar price-fixing case.
  • However, it is still just a "request" — if the FTC refuses, the path is blocked. Some believe that is exactly why prosecutors took the unusual step of filing charges directly in this case.

🔎 Leniency Program

• Companies that confess to price-fixing first can get their fines reduced or waived.
  • The leniency program rewards companies that voluntarily report price-fixing to the FTC. The first company to confess can have its fine completely waived. The second gets a 50% reduction.
  • This is one of the most powerful tools the FTC has to uncover secret price-fixing schemes that would be very hard to detect from the outside.
  • This is a key reason why reforming the exclusive prosecution right requires careful thought. If criminal risk goes up dramatically, companies may stop confessing — and that could actually make it harder to catch price-fixing. Any reform must keep this program effective.

🔎 Administrative Penalties vs. Criminal Penalties

• The same wrongdoing can lead to both administrative and criminal punishment.
  • Administrative penalties are things like fines, correction orders, and business suspension orders — issued by the FTC through a government review process. Criminal penalties include prison sentences and fines — decided by courts after prosecutors bring a case.
  • Under the exclusive prosecution right system, administrative action by the FTC comes first, and criminal prosecution follows only after. This is meant to prevent companies from being hit twice unfairly.
  • When both happen at the same time — or in the wrong order, as in this case — companies must deal with both the FTC investigation and a criminal investigation simultaneously. Some call this an unfair double burden. Others say it is a natural consequence for serious violations.

5️⃣ Frequently Asked Questions (FAQ)

Q: How did the sugar price-fixing actually hurt me as a consumer?

A: It forced you to pay more than you should have for sugar and products that use sugar.

• Price-fixing happens when competing companies secretly agree to raise prices together instead of competing. If sugar companies all agreed to charge more, consumers paid more than they would have if the companies had competed fairly.
• Sugar is an ingredient in drinks, snacks, bread, and many other foods. So when sugar prices go up artificially, the cost ripples through to lots of other products too. The ₩408.3 billion fine is not just a punishment for the companies — it also sends a message that consumer rights matter. Note that the fine money goes to the government. If you want direct compensation as a victim, you would need to file a separate lawsuit against the companies.

Q: The FTC already issued a fine — so why is there still a controversy?

A: Because prosecutors filed criminal charges before the FTC even finished its own process — that almost never happens.

• Normally, the FTC investigates first, issues fines and correction orders, and then — if it decides criminal punishment is also needed — refers the case to prosecutors. But this time, prosecutors used the prosecution request right to charge executives before the FTC's process was complete.
• This created two different perspectives. One view is: "This is great — it means tougher enforcement." The other is: "If the rules keep changing, businesses don't know what to prepare for." The core of this debate is finding the right balance between tough enforcement and a system that businesses can predict and plan around.

Q: What would change if the exclusive prosecution right is removed?

A: Criminal prosecution would become easier, but it could also lead to more business burden and fewer voluntary confessions.

• Without the exclusive prosecution right, prosecutors could investigate and charge companies for price-fixing without needing the FTC's approval first. In theory, this would mean faster and stronger enforcement. For consumers, it could mean more serious consequences for wrongdoers.
• However, businesses would risk being investigated by both the FTC and prosecutors at the same time, which is a heavy burden. There is also a real concern that if the risk of criminal prosecution goes up, companies will stop using the leniency program to confess — which could actually allow more price-fixing to go undetected. That is why most reform proposals do not suggest a full removal of the system, but rather allowing prosecutors to act independently only in clear-cut, serious cases.

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