On January 8 (Wednesday) at 2:00 PM, the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, the Korea Fair Trade Commission, and the Financial Services Commission held a joint meeting at the Government Complex Seoul (9th Floor Conference Room) under the chairmanship of Choi Sang-mok, Acting President and Deputy Prime Minister and Minister of Economy and Finance. The meeting aimed to review the annual work plans of the key ministries and hold a “Solution Forum for Key Issues.”
Unlike traditional work reports, this year's meeting was designed to address the public's growing concerns in an increasingly severe domestic and international environment. The ministries collaborated as one government team to devise actionable solutions to pressing issues and report them to the public. The following summarizes the Korea Fair Trade Commission’s (KFTC) agenda.
The KFTC aims to establish a foundation for fair trade to support economic recovery and prepare for the future through three major initiatives:
- Ensuring fair compensation for subcontractors, small businesses, and suppliers in the subcontracting and distribution sectors.
- Expanding transparency in franchise operations by introducing a disclosure system.
- Promoting consumer protection measures in response to demographic challenges.
Key Initiatives
Subcontracting and Distribution Sectors
To alleviate liquidity pressures caused by high inflation and exchange rates, the KFTC will:
- Implement a comprehensive improvement plan to ensure the stability of subcontract payment practices.
- Propose legislation to encourage timely payments to suppliers in the distribution sector.
Specifically, in the subcontracting sector, the KFTC plans to introduce institutional reforms such as payment guarantees via third-party guarantors and expanding the scope of direct payments by ordering parties. It will also intensify monitoring for illegal practices aimed at evading subcontract price indexation systems.
In the distribution sector, measures include imposing obligations for payment settlement deadlines and separate account management on online intermediary platforms. Additionally, the KFTC will review and work to shorten payment settlement periods for traditional retail methods like direct purchases and special arrangements.
Franchise Sector
To address information asymmetry between franchise founders, franchisees, and headquarters, the KFTC will introduce a “Franchise Disclosure System.” This system replaces the current “Franchise Registration System,” which often delays the delivery of up-to-date information due to lengthy registration reviews. Under the new system, franchise headquarters will promptly disclose information without prior KFTC review. Any false disclosures identified in post-monitoring will result in corrections and sanctions.
Consumer Protection Amid Demographic Changes
The KFTC plans to enhance consumer safety nets to address challenges posed by low birth rates and an aging population.
- To alleviate the financial burden of weddings, referred to as “weddingflation,” major wedding venues and agencies will provide pricing information (venue rentals, dress, makeup, etc.) through the Korea Consumer Agency’s “Consumer Price” platform on a quarterly basis starting January.
- In the funeral services sector, which includes 8.92 million subscribers and prepaid deposits totaling KRW 9.4 trillion, the KFTC will strengthen consumer protection by:
- Establishing an integrated platform to provide one-stop support for compensation claims arising from funeral service provider failures.
- Conducting on-site inspections and implementing regulatory improvements to prevent insolvency and encourage responsible management practices.