South Korea's Fair Trade Commission imposed a record fine of 747.5 billion won on four starch and starch syrup manufacturers for price-fixing. The decision announced the previous day targets Daesang, Sajo CPK, Samyang, and CJ CheilJedang for a cartel that operated for 7 years and 5 months. The fine represents the largest penalty ever imposed by the FTC for a cartel case, surpassing the previous record of 671 billion won levied in a flour price-fixing case.
FTC Imposes 747.5 Billion Won Fine on Four Starch Manufacturers
According to industry sources, the FTC issued corrective orders and fined Daesang, Sajo CPK, Samyang, and CJ CheilJedang a total of 747.5 billion won for price-fixing in the starch and starch syrup market. The penalty exceeds the 671 billion won fine imposed in the flour cartel case and the 396 billion won levied in the sugar cartel case. With this decision, the total fines imposed on food ingredient cartel cases this year exceed 1.8 trillion won.
![Four starch companies face record 747.5 billion won fine]()
Food Companies Consider Lawsuits Against Cartel Participants
Some food companies that purchased raw materials from the cartel members are internally reviewing damage compensation lawsuits. These companies stated they can formally discuss responses once administrative procedures conclude. One food industry official said, "We are preparing a lawsuit internally. If management takes no action when fines are imposed, it could be connected to executive breach of duty or shareholder value damage."
An official from the FTC's Cartel Investigation Bureau explained that once the FTC issues its decision, "the facts of conduct and related sales can be specified, which can help in litigation. If the plaintiff issues a document submission order through the court, the respondents must submit related materials." The official added, "Because there are many large end-users, they should be able to receive sufficient damage compensation."
Damage Calculation Presents Major Legal Challenge
Not all companies are expected to pursue litigation. Some firms are quietly monitoring the situation. The difficulty in accurately calculating actual damage is a practical factor making companies hesitant to sue. Attorney Seok Geun-bae of law firm Sejong explained, "For a damage compensation lawsuit to succeed, three elements must be proven: the liability of businesses that participated in the cartel, occurrence of damages, and causal relationship between damages and liability. For example, even if a product that was 10,000 won becomes 12,000 won, you must separate the price increase due to the cartel from other factors like exchange rates or wage increases, which is not simple."
The FTC acknowledged limitations in calculating unjust profits at a briefing. Vice Chairman Nam Dong-il stated, "We made efforts to estimate unjust profits, but extracting actual unjust profits from the cartel is not easy." This difficulty in calculating unjust profits that even the FTC struggles with can become an obstacle for individual companies preparing lawsuits. Documents such as appraisal reports are necessary to objectively prove the scale of damages in litigation.
![Record fine imposed on starch syrup cartel]()
Litigation Expected to Require Years to Resolve
For various reasons, completing the litigation is expected to take time. Some observers suggest it could take at least 5 years. In one example, the FTC sanctioned six construction companies in 2007 for bid-rigging in the Seoul Subway Line 7 extension project, but related damage compensation lawsuits took over 10 years to conclude. Given the high public interest in this case, the actual responsibility each company will bear is expected to become clear only after lengthy court battles.
FAQ
What companies received fines in South Korea's starch price-fixing case?
Daesang, Sajo CPK, Samyang, and CJ CheilJedang received a combined fine of 747.5 billion won from South Korea's Fair Trade Commission for operating a price-fixing cartel for 7 years and 5 months. This represents the largest cartel fine in FTC history.
Why is damage calculation difficult in cartel lawsuits?
Calculating damages requires separating price increases caused by the cartel from other factors like exchange rates and wage increases. Even the FTC acknowledged that extracting actual unjust profits from the cartel is not easy, making it challenging for individual companies to objectively prove the scale of damages in litigation.
