Cartels harm consumers, businesses and economies by increasing prices, reducing choice and distorting innovation processes. The Korean Monopoly Regulation and Fair Trade Act (MRFTA) prohibits all kinds of agreements of cartel activities such as price fixing, supply restriction and market division. In South Korea, administrative sanctions can be imposed on a legal body who makes any contract or arrangement, or arrives at any understanding which includes cartel activities prescribed by the Korean MRFTA. Even though an individual who personally engages in cartel agreements can be convicted of an offence. Not only the legal body but also the agent would be able to be punished by the fine when an agent of a legal body commits a violation of the Korean MRFTA.
Only a few of the cartel cases which have been handled by the Korea Fair Trade Commission (KFTC) are prosecuted in South Korea because the KFTC prefers administrative directives to criminal sanctions. As a result, there will be very little likelihood that a corporation or its agents face a criminal sanction for cartel behavior. However, the administrative sanctions have failed to provide adequate deterrence. We need more severe punishments for cartels.
To find desirable sanctions against the cartels, we perform an comparative analysis on criminal remedies against cartel of Japanese Antitrust Law, U.S. Sherman Act, German Gesetz gegen Wettbewerbsbeschränkungen(GWB), and Treaty on the Functioning of the European Union(TFEU) from jurisdictional and legislative viewpoints.
Among these legislations, the current Korean Competition Law seems to follow Japanese examples especially in the area of criminal enforcement on cartel. Thus, we particularly focus on an examination in the Japanese Antitrust Law and some provisions regarding cartel sanctions in the criminal law through introducing important judicial precedents related to the criminal enforcement on cartels in Japan. We extensively review federal sentencing guidelines and its application to cartel cases in the section of the analysis on US legislations.
German and E.U. don't have any criminal law provisions in their Competition Laws and stipulate any articles concerned with cartels(except bid-rigging) in criminal law unlike Japanese and US approaches. Therefore, we analyze in detail the fine which is a kind of monetary sanction by German and European competition authorities.
Throughout the comparative analysis, we draw some implications on the way of cooperation between leniency program and criminal enforcement on cartel, and the penalty against employer and employee as well. We also suggest that each nation’s unique social, economic and even cultural environments should be considered as the optimal combination of criminal remedies on cartel and competition law enforcement.
According to the Korean MRFTA, a corporation can be prosecuted only if the KFTC files a criminal accusation or criminal referral to prosecutors. The KFTC has the power of discretion whether to make a referral or not. Namely, in South Korea, prosecutors cannot initiate a criminal investigation on their own. The authority of the KFTC exclusively obstructs the punishment of a company and its employees when we file a criminal referral. Therefore, its power of discretion should be limited or abolished.
A leniency program is implemented to expose the cartel which is formed in secret in South Korea. However, the leniency program should be expanded, and the cartel leader should be excluded from amnesty. In addition, the reduction rate should be adjusted, and the related regulations are prescribed not in the notice but in the article.
In the Korean MRFTA, the traditional view of the criminal law that only an individual can commit a crime is still acknowledged: a corporation can be held criminally liable, not because it commits a criminal offence by itself, but because it does not take necessary measures to prevent its agents from committing a crime. Considering the fact that most of the revenues generated by the cartel behavior is attributed to the corporation itself rather than to its agents who make an cartel agreement personally, the Korean MRFTA should be amended so that a corporation be prosecuted on its behalf if it contravenes any section of the Korean MRFTA. If directors and members of senior management who participated in unlawful cartel activities or failed to prevent them could be prosecuted separately, it would contribute to the effectiveness of the struggle against the cartels.
The provisions of the Korean MRFTA relating to the individual criminal responsibility should be amended so that they are in accordance with the principle of “nulla poena sine lege”. For example, the article 19 of the Korean MRFTA proscribes any contract, agreement, resolution to engage in such kinds of activities unfairly restricting competition. But the word “unfairly” is so vague that a reasonable person who has average intelligence cannot determine its meaning or application. Moreover, the meaning of the term “unfairly restricting competition” varies from time to time, and depends on the types of cartel activities and the influence of effective enhancement in the activities. There is the result that the application of the law depends not on the statutory provisions but on the discretion of the KFTC. In addition, the constitutional principle “nulla poena sine lege” cannot be guaranteed. The terms of a criminal statute must be sufficiently explicit to inform those who are subject to it what conduct is punishable. Therefore, a provision that defines cartel activities as “unfairly restricting competition” should be amended in the Korean MRFTA, or it should be substituted by another term that has a definite meaning.
The article 19 (1) of the Korean MRFTA prohibits enterprisers from agreeing with other enterprisers to engage in unfair collaborative practices, and any person who violates this provision is punished under the article 66 of the Korean MRFTA. There is a problem that the term “enterpriser” in the provision of Article 19 (1) especially has private characteristics that form the basis of criminal liability, and any individual who is merely an agent of an enterpriser does not have such legal characteristics. Namely, according to legal speaking, the article 66 of the Korean MRFTA that penalizes a person who engages in cartel activities has inappropriate meanings because the provision of article 19 (1) of the Korean MRFTA cannot be applied to an individual who is just an agent of an enterpriser and lacks such legal characteristics. If the specially personal characteristics do not pertain to a person, even though it exists for the person represented, it is necessary to amend the Korean MRFTA in order to make a person act as the representative of an enterpriser who has criminal responsibility for a crime of the constituent elements which include the specially personal characteristics.

Keywords: Cartel, competition law, Exclusive Complaint Right, The Korean Monopoly Regulation and Fair Trade Act(MRFTA), Leniency Program.
Sherman Act, Gesetz gegen Wettbewerbsbeschränkungen(GWB), Treaty on the Functioning of the European Union(TFEU), Federal Rules of Criminal Procedure, restraint of trade, U.S. Sentencing Commission