On Wednesday, November 18, 2020, head of the DOJ Antitrust Division, Makan Delrahim, signed a Memorandum of Understanding (MOU) between the DOJ and the Korean Prosecution Service (KPS) that supports increased cooperation between the two agencies in criminal antitrust enforcement and policy development. Delrahim was joined virtually by Prosecutor General Yoon from KPS for the signing ceremony.
In his signing ceremony remarks, Delrahim stated: “The Memorandum of Understanding is a shared recognition of the close ties between our agencies and our commitment to assisting one another in criminal cartel matters… [It] serves to memorialize and formalize what we have been implementing over the past few years.” He went on to highlight DOJ and KPS’s recent collaborations: shared enforcement training, cooperation and coordination on investigations, and exchange of information regarding policy initiatives.
The MOU includes:
- a shared commitment to consider both parties’ enforcement objectives and important interests when conducting enforcement activities;
- a commitment of both parties to exchange experiences on the enforcement of their criminal cartel laws and engage in shared trainings and other technical assistance initiatives; and
- an obligation to maintain the confidentiality of any information provided by the other party and honor prohibitions on sharing information when not permitted by law.
These provisions follow years of U.S. antitrust focus on South Korean companies and individuals. Last year, the DOJ obtained guilty pleas from two South Korean companies accused of bid rigging and unsealed indictments against seven executives of the companies. In 2020, a South Korean national and automotive parts manufacturer pleaded guilty for his role in a market allocation and bid-rigging conspiracy.
The new MOU mirrors the 2015 MOU between the DOJ, FTC, and the Korea Fair Trade Commission (KFTC). The 2015 MOU supplemented what had been at the time an already healthy and growing relationship between two countries with strict competition rules. In 2018, South Korea levied the third-highest level of cartel fines in the world and the KFTC is still fighting the U.S. company Qualcomm in court after levying a record $873 million fine. The South Korean Antitrust Chief recently claimed that KFTC will also bring an antitrust case against Google within the year.
This more recent MOU is no doubt in anticipation of South Korea’s plans to implement significant reforms to its competition laws in 2021 and in particular the granting of KPS “increased access to leniency applications and a broadened mandate to investigate and prosecute hard-core cartels.” Korean lawmakers are currently considering a proposal that would (1) abolish the requirement of a KFTC complaint in order for KPS to investigate cases involving hardcore cartels, (2) double the maximum amount of fine that may be imposed on offenders, (3) expand the civil remedy for victims of a competition law violation, and (4) expand the types of information exchange included in the definition of illegal collusive conduct. Over the last three years, DOJ provided South Korea with information regarding U.S. leniency policies and criminal trial procedures in aid of developing these new reforms. During his recent remarks, Delrahim promised continued cooperation with and support and support of South Korea’s efforts.
Upon signature by Delrahim and General Yoon, the MOU went into effect. We expect that this MOU will lead to continued and more aggressive oversight and enforcement of Korean companies as well as American companies conducting business in South Korea.