[비즈한국] Companies sometimes make decisions that are difficult to explain by money alone. Understanding the laws or systems hidden within them can provide a clearer picture of the inside story. 'Useful Business Tips (Al-Ssul-Bi-Beop)' introduces clues that help understand business trends.
One of the prominent features of South Korea's fair trade regulation is the significant emphasis on regulating the abuse of trading positions. Often called regulations for fair transactions between large and small-to-medium enterprises, this area focuses on regulating unfair trade practices that arise from 'gap-eul' relationships. This is a point that clearly distinguishes it from the competition law practices of foreign countries, which primarily target the formation or abuse of monopoly power.
Regarding the regulation of unfair trade practices, there is constant controversy over whether state intervention in transactions between private individuals is justifiable. The core of this criticism is that it goes against the principle of private autonomy. The Korean fair trade legal framework has established the legal basis for regulation by enacting individual, dedicated laws according to the type of transaction. The Subcontracting Act, Franchise Business Act, Large-scale Distribution Industry Act, and Agency Act are the outcomes, enacted sequentially to fit the characteristics of each transaction type.
Considering this legislative background, it is a natural result that the contents of these four laws have similar structures. These laws regulate the following common elements as core content:
① Clear establishment of rights and obligations through written documents
② Information disclosure systems to resolve information asymmetry and the conduct of written fact-finding surveys
③ Prevention of unfair practices that abuse a superior trading position
④ Introduction of systems to support the economically vulnerable in post-dispute situations (estimation of damages, facilitation of evidence collection, mediation systems, etc.)
However, there is a system that, despite accounting for a significant portion of regulatory practice, is often overlooked by practitioners: the written fact-finding survey conducted periodically by the Korea Fair Trade Commission (KFTC). A written fact-finding survey is an administrative survey conducted regularly by the KFTC to understand the overall transaction status of the market and the possibility of legal violations. Specifically, it involves conducting survey-style inquiries targeting thousands to tens of thousands of businesses for purposes such as capturing signs of legal violations, selecting subjects for ex-officio investigations, encouraging autonomous correction, and securing basic data for policy development.
There are three reasons why written fact-finding surveys are noteworthy. First, the number of businesses surveyed reaches tens of thousands, broadly reflecting the conditions of the entire market. Second, individual businesses' potential legal violations can naturally be exposed during the response process. Third, the survey results directly influence the direction of the KFTC's subsequent ex-officio investigations and policy formulation. Due to these characteristics, those working in related industries must keep a close watch on the content and results of written fact-finding surveys.
First, let's look at the results of the 2025 written fact-finding survey on suppliers in the distribution sector. The survey was conducted by the KFTC on 7,600 suppliers trading with 42 large retailers in accordance with the Large-scale Distribution Industry Act. The business types surveyed range from convenience stores, large supermarkets, outlets/complex malls, duty-free shops, specialty retailers, department stores, TV home shopping, to online shopping malls.
Analyzing the responses from suppliers, it was found that improvement in transaction practices compared to the previous year was the lowest in transactions with online shopping malls. Furthermore, the experience rate of damage from online shopping malls was the highest across all major types of unfair practices, including price reductions/delayed payments, unfair returns, transferring promotional costs, forcing exclusive dealings, and unfair collection of sales commissions.
In response, the KFTC explained, "As the distribution market is being reorganized around online platforms, we will seek institutional improvements to prevent potential damage to suppliers, while concentrating policy capabilities on improving transaction practices in areas where unfair practices are frequent." If you are an online shopping mall stakeholder, it is necessary to thoroughly check now whether there are any potential unfair trade issues in your transactions with suppliers.
Next, let's look at the main results of the 2025 written fact-finding survey on subcontracting transactions. The KFTC conducted the survey targeting a total of 100,000 businesses, including 10,000 prime contractors and 90,000 subcontractors across manufacturing, service, and construction sectors. The scale of the survey alone indicates that the Subcontracting Act has the densest regulatory intensity.
The first issue noted in the survey results is the evasion of the subcontract price adjustment system (linked to raw material prices). Many respondents stated that even though they are subject to the system, prime contractors do not comply with it. The subcontract price adjustment system is a policy that mandates prime contractors to sign agreements to adjust subcontract prices when the prices of major raw materials—which account for more than 10% of the subcontract price—fluctuate. The intention is to prevent the burden of raw material price hikes from being shifted to subcontractors, but prime contractors often feel tempted to bypass this duty by obtaining formal consent forms for non-adjustment from subcontractors, and such makeshift practices are widely prevalent.
The second issue is technology misappropriation. Many subcontractor responses pointed to cases of technology-related damage. Specifically, there were numerous reports of prime contractors unilaterally demanding technical data, avoiding the signing of non-disclosure agreements (NDAs), and even misappropriating technology to cause losses.
Based on these survey results, the KFTC announced that it would promote institutional improvements to prevent illegal acts (forcing non-adjustment agreements, split contracts, etc.) to enhance the effectiveness of the subcontract price adjustment system, and expand ex-officio investigations to eradicate technology misappropriation. One can feel that the intensity of KFTC investigations into these two issues is clearly increasing in the field.
Finally, there are the results of the 2025 written fact-finding survey on agency transactions. This survey targeted 510 suppliers and 50,000 agencies across 21 industries. While it is easy to assume that agency transactions have shrunk due to the rapid growth of online distribution, the reality was different. The agency channel still accounts for the largest proportion (51.9%) of total distribution channels, and this figure has actually increased compared to the previous year. This level overwhelms other distribution channels such as online (7.3%), direct supply (19.4%), direct-managed stores (8.4%), and others (13.0%).
However, along with intensifying market competition, the qualitative level of agency transactions is actually deteriorating. According to responses from agency owners, transaction satisfaction is on a downward trend, while the experience rate of unfair practices is on the rise. In particular, structural vulnerabilities are prominent. Agency owners invest an average of over 210 million won when starting a business and spend an additional 55.93 million won on average just for store renovations. Despite this, most agency contracts are signed on a one-year basis, or in many cases, the contract period is not specified at all. The structural problem that investment costs cannot be recovered if the supplier unilaterally terminates the transaction was pointed out as a core issue.
In response, the KFTC announced that it would prepare "measures to regulate unfair contract terminations and refusals to renew by suppliers." If you are a practitioner managing agencies, you need to sufficiently review legal risks and approach decision-making—such as transaction termination, refusal of renewal, or refusal of contract renewal—with extra caution.
Carefully examining the published results of written fact-finding surveys reveals the flow of the market and the outlines of the concerns faced by each business. It is a document worth reading at least once, not only for regulatory response but also to grasp industry trends and proactively manage risks.