Local companies were fined some 1.17 trillion won ($1.07 billion) over the last decade by the country's antitrust watchdog for following the government's administrative guidance, the business community said Wednesday.
  

According to companies and the Federation of Korean Industries, the Fair Trade Commission slapped penalties on 30 different business activities, of which six were later overturned by courts. The repealed fines from those six cases amounted to 397.2 billion won, or 34 percent of the total fines levied.
  

Administrative guidance, while not backed by law per se, is perceived as de facto rules set by the government to regulate the market to meet certain policy goals. Companies, in most cases, have no choice but to follow these guidelines even if they know that such actions could violate antitrust rules.
  

"Under many circumstances, the government is actually pushing companies to engage in collusion," claimed Shin Seok-hoon, a senior manager in charge of corporate policy at the FKI.
  

Of the 30 cases, eight involved directives had been handed down by the Financial Supervisory Service, the country's top financial regulator. Ministries including commerce, tourism, agriculture, finance, and construction were also cited for issuing orders that conflicted with antitrust laws. The tax service and city of Yongin, south of Seoul, enforced administrative guidance that resulted in fines for companies as well.
  

The country's courts in 2012 overturned a ruling by the FTC to fine local soju producers 25.3 billion won for price rigging, which was triggered by guidelines issued by the National Tax Service.
  

In a similar case, Hanwha Life Insurance and a dozen other insurers that followed FSS orders and later fined 363 billion won, had their case dropped after the Supreme Court ruled in their favor.
  

Another high profile case currently locked in legal dispute involves construction companies that took part in building the Ara Waterway connecting the Han River to the Yellow Sea, and a subway line in the port city of Incheon. The FTC claimed 39 contractors rigged prices and ordered 849.6 billion won in fines, with all being barred from engaging in public building projects for two years. Contractors, on the other hand, argue they only followed guidelines set by the government and that they should not be punished. (Yonhap)