The nation’s antitrust watchdog Fair Trade Commission on Wednesday filed complaints against two business operators that “deliberately breached laws,” in addition to sending down penalties, signaling stern action against rule breakers.

The measure was also seen as reflecting the stance of the new FTC chief Kim Sang-jo, a former civic activist known for his strong call for transparent business operations.

The watchdog decided to file complaints against multilevel marketing firm Nucerity and funeral service company Haneuljigi on charges of violating the Act on Door-to-door Sales and the Installment Transaction Act, officials said Wednesday.

Nucerity received a correction order and a fine last week for underreporting the amount of support allowance for salespeople in order to dodge the legal ceiling, which is 35 percent of the total sales.

The funeral service provider was caught for failing to deposit 5 billion won ($4.5 million) of advances received from some 5,000 clients in 2014 and for refusing to refund some 10 million won to those who called off contracts last year.

Despite the relatively limited consequences of the breaches and the already imposed sanctions, the FTC also decided to take the cases to the prosecution, officials said.

“It looks like the recent criminal charges (on unfair trade practices) reflects Chairman Kim’s belief in strict punishment for the sake of market order,” an official said.

The FTC is also likely to consider filing a charge against the state-sponsored Education Broadcasting System, acknowledging the complaint filed by the Ministry of SMEs and Startups on Wednesday that the broadcaster abused its exclusive position to promote the sales of specific education materials.
 

Some observers say that the FTC’s actions may have come in response to speculations that the regulator may be softening its stance that it would keep a stringent watch on industries.

Last Monday, Kim said that the FTC’s exclusive right to file complaints against trade rule violators would be removed eventually, but in a gradual phase-out process.

According to the Fair Trade Act, the FTC is currently the only entity which can bring a fair trade case to court through the prosecutor’s office, a rule aimed at preventing an abuse of lawsuits.

“The exclusive right to file a complaint may be abolished within the incumbent government term (which is to last till 2022),” Kim told a group of business executives.

Kim’s stance was suspected by some as a retreat from President Moon Jae-in’s earlier pledge to reduce the supervising organization’s powers.

“It is difficult to immediately abolish the exclusive right altogether as the change not only involves the revision of six separate laws but also will deliver a drastic impact on the market,” Kim said.

“This is a rational implementation of (Moon’s) pledge, not a regression.”

By Bae Hyun-jung (tellme@heraldcorp.com)