Recent Developments

The Korea Fair Trade Commission (KFTC) has issued the advance notice of the proposed amendment to the Notification Guidelines for Business Combinations (Notification Guidelines) for public comment from September 9, 2026 to September 30, 2026. The amendment to the Notification Guidelines has been proposed to clarify that acquihires, which are transactions becoming more common in emerging high-tech sectors (e.g., AI), may be subject to mandatory merger review and reporting obligations. Acquihires refer to transactions that utilize hiring arrangements and related agreements to transfer personnel in lieu of executing a formal business transfer agreement. Acquihire transactions have received significant attention by regulators due to large global tech companies’ execution of this transaction structure to systematically recruit key personnel while bypassing merger review. Because acquihire transactions may constitute a business transfer under the Monopoly Regulation and Fair Trade Act (MRFTA)—one of five types of regulated business combinations—the KFTC is seeking to amend the Notification Guidelines so that acquihire transactions clearly fall under the scope of a business combination subject to notification as a type of business transfer. Under the MRFTA, the transfer or lease of an entire or material part of a business is subject to merger notification if the transaction parties meet the relevant size thresholds or the transaction value exceeds a certain amount with the target entity having substantial activities in Korea. The KFTC will collect public comments during the period of the advance notice and proceed with implementation of the proposed amendment following deliberation and plenary session resolution.    

I. Key Contents of the Proposed Amendment

    A. Clarification of “business” to capture organized personnel

        The current Notification Guidelines define “business” under Article 9(1)(iv) of the MRFTA (Restriction on Business Combinations) as a bundle of property rights organized for the company’s business purpose functioning as an integrated operational unit, including sales rights, distribution systems, intellectual property rights such as patents and trademarks, and other items of economic value such as government permits and licenses. The proposed amendment to the Notification Guidelines specifies that when personnel organized into a functioning unit, combined with their technology or knowledge, perform a core business function, such personnel fall under the definition of “business.”  

    B. New standards for “material part” of business and calculating transfer price in acquihires

        The current Notification Guidelines provide that a “material part” of a business exists when (i) the part to be transferred or leased is capable of being operated as an independent business unit, or the transfer or lease causes a material decrease in the transferor’s sales, and (ii) the transfer price is at least 10% of the transferor’s total assets as of the end of the immediately preceding fiscal year, or at least KRW 10 billion.         The proposed amendment to the Notification Guidelines expands requirement (i) to include cases when the acquiring company is able to conduct the same business activities as the transferor, to now address acquihire transactions where key personnel (rather than an independently operable business unit) transfer to the acquiring company.         In addition, the proposed amendment to the Notification Guidelines revises how the transfer price is calculated for acquihires. The transfer price will now include any economic consideration (such as money or property benefits) paid to the transferor as consideration for the transaction, regardless of how it has been characterized. Examples include consideration for the release of rights relating to transferred personnel and license fees for intellectual property necessary for business activities.  

    C. New standard for “implementation” in acquihires

        The current Notification Guidelines define the implementation of a business transfer agreement as the completion of final payment. When final payment has not yet been completed, the business transfer is deemed to have been implemented upon delivery of movable assets, registration of real property, or registration of trademarks. The proposed amendment to the Notification Guidelines provides that the cessation of the transferor’s business in the context of an acquihire will also constitute implementation of the business transfer.  

II. Implications of Proposed Amendment

    In light of the proposed amendment to the Notification Guidelines, companies planning to transfer employees through an acquihire transaction should carefully assess whether the transaction may now trigger a merger notification obligation and factor any resulting notification requirement and review timeline into the transaction schedule.     The KFTC has also stated that the proposed amendment to the Notification Guidelines was developed through the exchange of information with foreign competition authorities, including the EU, Germany and the United Kingdom, and expects further international cooperation and response to new types of business combinations by large global tech companies. Given this exchange, companies planning acquihires should take into account potential coordination between the KFTC and multiple competition authorities during the merger review process. If you have any questions or require legal assistance on the matters addressed in this newsletter, please contact Lee & Ko's Antitrust & Competition Practice Group. Authors and relevant professionals : - Hwan JEONG Partner ( hwan.jeong@leeko.com ) - Jeong-Ho SUN Partner ( jeongho.sun@leeko.com ) - Min-Ho LEE Partner ( minho.lee@leeko.com ) - Suruyn KIM Partner ( suruyn.kim@leeko.com ) - Jungwon KWON Partner ( jungwon.kwon@leeko.com ) - Jeong Yoon CHOI Partner ( jeongyoon.choi@leeko.com ) - In Seon LEE Partner ( inseon.lee@leeko.com ) - Frank S. SHYN Senior Foreign Attorney ( frank.shyn@leeko.com )  

In 2026, the Korea Fair Trade Commission (KFTC) has taken two significant steps to address the growing risk of AI-related false and exaggerated advertising. First, the KFTC amended its “Review Guidelines on Labelling and Advertising for Endorsements and Testimonials” (Review Guidelines) to capture AI-generated “virtual persons” within the existing endorsement framework so that there is clear disclosure whenever such virtual persons are used to promote a product. The amendments to the Review Guidelines took effect on June 1, 2026. Second, on June 23, 2026, the KFTC proposed amendments to its “Notice on the Operation of Substantiation of Labelling and Advertising” (Substantiation Notice) which would require businesses to substantiate advertising claims involving AI and new technology prior to publication and to produce supporting evidence on request or become subject to an order to suspend the advertisement. Following the conclusion of the public comment period on July 13, the proposed amendments to the Substantiation Notice are expected to be implemented. Together, these measures reflect the KFTC’s broader effort to combat “AI-washing” (the practice of overstating or fabricating AI involvement in products and services to influence consumer purchasing decisions) and suggest that legal risk associated with unsubstantiated or improperly disclosed AI-related advertising claims will continue to rise. The key details and implications of the Review Guidelines and Substantiation Notice are as follows: I. Review Guidelines for Endorsements and Testimonials     The key contents of the amendments to the Review Guidelines are as follows:     A. Express inclusion of “virtual persons”         The previous Review Guidelines defined the subjects of endorsements and testimonials as consumers, celebrities, experts, and organizations or institutions. The amendments add “virtual persons” created using AI or similar technology to this list. This addition now establishes a clear basis for AI-based advertising to be regulated within the existing framework.     B. Mandatory disclosure obligation for advertisements featuring virtual persons         When an AI-generated virtual person is used in an endorsement or testimonial, the advertiser is now required to disclose clearly that the person is a virtual character. The disclosure must be made in a manner that consumers can clearly and easily recognize.         ■ Text-based media (e.g., blogs, etc.): The title of the post or the beginning text of the body must include a statement such as “This post contains a virtual person generated by artificial intelligence (AI)” or “Includes virtual person.”         ■ Photo or video media: During the appearance of a virtual person, text such as “Virtual Person” must be displayed in close proximity to the virtual person.     C. Regulation of “experience-based claims” by virtual persons         The amended Review Guidelines also expressly provide that where a virtual person’s endorsement or testimonial is presented based on an actual experience, such as user review, any content that does not reflect a real experience may constitute an unlawful advertisement (if false, exaggerated, or deceptive) under the Fair Labeling and Advertising Act (FLAA).         ■ For example, a before and after testimonial featuring an AI-generated virtual consumer, with content that does not reflect reality used to exaggerate the efficacy or effects of a product, would be a representative example of unlawful advertising. II. Substantiation Notice     The labelling and advertising substantiation system under the FLAA requires businesses to bear the burden of proving factual claims made in labelling and advertising. The Substantiation Notice sets out the specific operating standards for this system, including the request, review and processing of substantiating materials.     The current Substantiation Notice has not been substantively updated since 2015 and does not expressly address claims relating to AI or other recently developed technologies, nor does it reflect the KFTC’s enforcement practices developed thereafter. Thus, the proposed amendments are intended to bring AI- and new-technology-related claims expressly within the scope of the Substantiation Notice and, in order to prevent the spread of consumer harm, allows the KFTC to issue a cease-and-desist order against an advertisement where a business fails to submit the required substantiating materials.     The key contents of the proposed amendments to the Substantiation Notice are as follows:     A. Clarification on object of request for substantiating materials         The current Substantiation Notice allows the KFTC to request substantiating materials relating to         (i) direct effects on the human body,         (ii) safety or the environment,         (iii) performance, efficacy or quality, and         (iv) other matters that materially affect consumers’ purchasing decisions or trade order.         As claims regarding AI functionality in products and services have become more common, the proposed amendments expressly clarify that advertising claims relating to AI functionality and other new technologies also fall within this scope, such as the following examples:         ■ Claims of having adopted new technology, such as describing a product as “safer through artificial intelligence (AI) technology”;         ■ Claims involving safety, environmental or new-technology-related marks or certifications; and         ■ Environmental claims relating to eco-friendliness, recyclability or reduced carbon emissions.     B. Specification of procedures for requesting and submitting substantiating materials         Under the current Substantiation Notice, substantiating materials must currently be submitted, in principle, within 15 days of the KFTC’s request, with a possible extension of up to 30 days (from the date the relevant cause ceases) where submission is impossible due to force majeure or other unavoidable causes. The proposed amendments to the Substantiation Notice set out the qualifying grounds for extension in greater detail, namely: (i) force majeure; (ii) a merger or acquisition, or the commencement of rehabilitation, bankruptcy or similar proceedings; (iii) seizure or temporary custody of the books and records or evidentiary documents of the business by an authorized agency; or (iv) a fire or other disaster causing serious disruption to the company’s operations. Also, in order to reinforce the principle that businesses should substantiate their claims before advertising, the amendments to the Substantiation Notice shorten the maximum extension period from 30 days to 15 days.         In addition, where a business continues to run an advertisement without submitting the requested substantiating materials within the applicable (including any extended) period, the proposed amendments to the Substantiation Notice would allow the KFTC to issue a cease-and-desist order against that advertisement until the proper materials are submitted.     C. Introduction of self-assessment checklist         The proposed amendments to the Substantiation Notice also introduce a checklist to help businesses assess, both before and after publishing an advertisement, whether they have complied with their substantiation obligations, including in relation to substantiation methodology, evidence-gathering and the submission of materials. III. Implications of Amendments     The amendment of the Review Guidelines and the proposed amendments to Substantiation Notice show that the KFTC is bolstering its enforcement of the FLAA. This includes the KFTC’s goal to strengthen economic sanctions for unlawful advertising. Amendments to the Enforcement Decree under the FLAA, which significantly raise administrative fines for repeat violators and reduce financial incentives for mitigating factors, took effect in July 2026.     Additionally, the KFTC established a dedicated “Labelling and Advertising Monitoring Team” on March 23, 2026. Together with amendment on the Review Guidelines and the proposed amendments to the Substantiation Notice, these measures suggest that the legal risk associated with unsubstantiated claims relating to AI, new technology or the environment will continue to rise.     With the KFTC’s increasing enforcement interest in AI-related advertising activities, companies should consider establishing proactive internal and external review processes for the creation and execution of advertising, supported by the KFTC’s new self-assessment checklist, to mitigate the associated risk.

South Korea (Korea) has seen several notable trends in merger review and enforcement that companies engaged in global transactions should be aware of. The following provides an overview of merger review statistics in 2025 published by the Korea Fair Trade Commission (KFTC), along with an analysis of recent developments companies should consider when filing in Korea. 1. Overview of Merger Review Statistics in 2025     The KFTC reviewed a total of 590 merger filings, marking a decrease of 208 cases (26%) compared to 2024 (798 cases). The decrease in the total number of merger filings reviewed is likely attributable to the implementation of merger filing exemptions by the KFTC for transactions involving (i) statutory mergers or business transfers between a parent company and its subsidiary under the Commercial Code, (ii) the establishment of a private equity fund under Korean law, and (iii) interlocking directorates involving less than 1/3 of the directors of the counterparty (excluding the CEO). Notwithstanding the marked decrease in merger filings, the aggregate transaction value increased from KRW 276.3 trillion in 2024 to KRW 358.3 trillion in 2025, an increase of 30%, indicating that large-scale transactions were more common in 2025. This increase in transaction value is attributable to the significant 38% rise in the aggregate transaction value of merger filings involving foreign companies, which increased from KRW 221.1 trillion to KRW 305.9 trillion.     The breakdown of merger cases reviewed and their transaction values, categorized by the nationality of the parties and their affiliation with large business groups, is presented in the table below.     On the other hand, the number of in-depth merger reviews to determine whether transactions restrained competition increased from 31 cases in 2024 (3.9% of merger filings) to 50 cases in 2025 (9.8% of merger filings). The significant increase of in-depth merger reviews despite the 26% decrease in total number of mergers reviewed is likely due to the KFTC focusing on select cases with the potential for anticompetitive effects. 2. Remedies and Non-compliance Penalties     Of the 50 merger filings subject to in-depth review by the KFTC in 2025, the KFTC imposed remedies in three cases. Additionally, the KFTC blocked one transaction recently in 2026 as discussed in detail below. Furthermore, the KFTC has demonstrated a strict approach to enforcing compliance with remedy orders.     1) Acquisition of Shares in the Semiconductor Chip Design Software Market – Conditional Clearance Subject to Divestiture         The KFTC conditionally approved the acquisition by Synopsys (a leading global semiconductor chip design software company) of all shares in Ansys subject to remedies. The KFTC perceived the merger to have a significant impact on the Korean market, as the parties supply software used by Korean companies such as Samsung Electronics and SK Hynix to design semiconductor chips or various other products using optics and photonics. During the merger review, the KFTC collected the opinions of various interested parties, both Korean and foreign, and received technical advice from experts.         Based thereon, the KFTC determined that the horizontal merger, could substantially restrict competition in the markets for (i) register-transfer level (RTL) power consumption analysis software, (ii) optical product design software, and (iii) photonics design software - where the combined market share of the two companies was between 60% to 80%, 90% to 100%, and 55% to 75%, respectively - potentially resulting in consumer harms such as increases in price or unfavorable transaction conditions. Accordingly, the KFTC imposed remedies requiring the divestiture of all relevant assets of either Synopsys or Ansys in each of the affected markets.         This case marks the first application of the "voluntary commitment procedure" introduced in August 2024, under which the parties may propose an official remedy package to the KFTC (see here →). Following the submission of the proposed remedies by the parties, the KFTC collected the opinions of competitors and customers, and revised the remedies where further supplementation was deemed necessary. As the case could have a significant impact on the global semiconductor design software market, the KFTC’s review involved close coordination with competition authorities in the United States, the EU, and the United Kingdom, among others, which resulted in the imposition of similar remedies with other competition authorities.     2) Interlocking Directorate in the Paid Subscription OTT Service Market – Conditional Clearance Subject to Behavioral Remedies         The KFTC conditionally approved a transaction involving interlocking directorates whereby Tving’s directors would comprise of five of Wavve's eight directors (including the representative director) and one statutory auditor. In Korea, Tving is the second-largest operator in the paid subscription OTT service market and Wavve is the fourth-largest operator by number of subscribers. The KFTC determined that the transaction raised concerns of subscription fee increases. Accordingly, the KFTC imposed remedies requiring each company to maintain its current pricing plans through the end of 2026, and, in the event of service integration, to launch pricing plans substantially similar to existing ones and maintain them through the end of 2026. The remedies are intended to prevent potential harm to OTT subscribers – such as price increases – that could arise from a horizontal merger between OTT service providers, thereby protecting OTT subscribers while preserving the parties’ pro-competitive rationale of the transaction, which is the enhancement of content acquisition and production capabilities. The behavioral remedies imposed by the KFTC are relatively short-term (through the end of 2026) as the KFTC considered that Tving and Wavve would face competition from Netflix, Coupang Play, and Disney+.         The parties successfully used the voluntary commitment procedure in this case to obtain conditional approval.     3) Establishment of a Joint Venture in the Domestic Online Cross-Border Shopping Market – Conditional Clearance Subject to Behavioral Remedies         The KFTC conditionally approved the establishment of a joint venture by Gmarket (operator of major domestic e-commerce platforms “Gmarket” and “Auction”) and AliExpress (global direct purchasing platform) through which the two companies would jointly control the platforms previously operated independently by each company, subject to the behavioral remedy of prohibiting the exchange of Korean consumer data between Gmarket and AliExpress.         During its review, the KFTC conducted an in-depth review of the transaction, which included collecting the opinions of foreign and Korean competitors, relevant industry participants, and experts, and conducted a consumer perception survey. The merger review focused on the potential for a substantial lessening of competition in the Korean cross-border e-commerce (overseas direct purchase) market, where Gmarket and AliExpress competed. In the Korean online cross-border e-commerce market, AliExpress had the largest market share of 37.1%, while Gmarket was the fourth largest with a 3.9% market share, meaning the combined market share of the joint venture was 41%.         The online cross-border e-commerce market is characterized by a feedback loop in which the accumulation of user data leads to improvements in targeted advertising and service quality, which in turn attracts additional users. In this regard, the KFTC was concerned the transaction could amplify platform-specific network effects (where an increase in users attracts more sellers which further increases users), resulting in an increased user concentration on the Gmarket – AliExpress joint venture platforms and a strengthening of market power. In addition, the KFTC determined the strengthening of consumer lock-in effects for Gmarket and AliExpress following the merger could operate as a factor in reducing the joint venture’s incentives to maintain the quality of personal data protection and data security.         Based on the foregoing, the KFTC determined there were potential concerns on the restriction of competition from the combination of data. As a result, the KFTC imposed remedies requiring the independent operation of the two platforms, the technical separation of Korean consumer data, a prohibition on the cross-use of data within the Korean market, and the maintenance of existing personal data protection standards for 3 years which may be extended depending on market conditions.         This case marks the first instance in which remedies were designed based on an assessment of the anticompetitive effects of combining data in a digital market, and is unique as the KFTC took the approach of treating personal data protection and data security efforts as key non-price parameters of competition. The parties also used the voluntary commitment procedure to obtain conditional approval.     4) Merger of Korean Car Rental Companies (January 2026) – Merger Blocked         In January 2026, the KFTC blocked a merger between the largest (Lotte Rental) and second-largest (SK Rent-a-Car) car rental companies in Korea. Although the combined market share of the two companies ranged from 21.3% to 38.2% (depending on the relevant markets), the KFTC, basing its decision on economic analysis, the submission of opinions from interested parties, and extensive consumer surveys, determined the companies were each other’s closest competitors and that the transaction would create a company with market power. Furthermore, the remaining competitors, primarily small and medium-sized enterprises, were found to be unlikely to exert effective competitive pressure post-merger to compete with the merged entity.         The KFTC also stated that behavioral remedies would be inappropriate in addressing the anticompetitive concerns since (i) structural remedies are preferred in cases with significant competition concerns and (ii) post-transaction, as the private equity fund will control the merged entity and due to the nature of private equity ownership, it will be difficult to ensure the continuity of the merged entity’s compliance with behavioral remedies.         This case demonstrates that even in transactions where the relevant market shares are modest and not high enough to trigger a statutory presumption of anticompetitive effects under the MRFTA, the KFTC may levy structural remedies or even block a transaction based on factors including market characteristics, industry structure, and unilateral effects.     5) Imposition of Periodic Penalty Payments for Non-Compliance with Remedies         The KFTC has been particularly active in monitoring and enforcing non-compliance with imposed remedies. The KFTC continued to assess compliance with the behavioral remedies imposed in connection with the Korean Air-Asiana Airlines merger, such as the prohibition of fare increases and reduction of seat capacity which were ordered for compliance until the completion of structural remedies, which includes the transfer of slots and traffic rights on certain routes. To confirm compliance, the KFTC not only reviewed reports submitted by the companies but also frequently requested the submission of data and conducted several dawn raids.         The KFTC imposed periodic penalty payments of KRW 5.88 billion (approximately USD 4.11 million) on Korean Air for non-compliance by violating its obligation not to reduce seat capacity and KRW 12.68 billion (approximately USD 8.85 million) on Asiana Airlines for violating its obligations not to reduce seat capacity and not to exceed the cap on average seat fare increases. The penalties imposed by the KFTC are the largest non-compliance penalties imposed for merger remedies. This case demonstrates the KFTC’s tendency to interpret remedies strictly and closely scrutinize their implementation. 3. Takeaways     The KFTC's 2025 merger review statistics may be summarized as follows: while the number of filings declined, the intensity of review increased, particularly for large-scale M&A transactions. This decline is attributable in part to the expansion of merger filing exemptions introduced in August 2024, which reduced the number of straightforward cases reviewed by the KFTC. The exemptions allowed the KFTC to concentrate its resources on significant transactions with major implications for the Korean market, reflecting a more targeted and focused enforcement approach.     Of particular note, remedies regarding personal data - such as the requirement to maintain data security standards - were imposed for the first time, making a departure from more conventional remedies such as asset divestitures typically applied to horizontal mergers raising competition concerns. This development suggests that the KFTC is more likely to review mergers and impose remedies from a broader perspective than in the past, such as by considering non-price parameters of competition, to reflect the unique characteristics of digital markets. Furthermore, the KFTC’s oversight of the implementation of remedies has become increasingly stringent. The KFTC has recently stated it will review institutional reforms to enhance the effectiveness of enforcing remedies, which indicates that the KFTC intends to monitor rigorously the implementation of remedies and impose harsh penalties for non-compliance moving forward.     In conclusion, companies that expect to submit merger filings in Korea should consider these recent developments and current trends in merger review and enforcement by the KFTC. In transactions involving potential anticompetitive concerns, the parties should conduct a thorough assessment of the potential impact on the relevant markets, develop persuasive arguments to address potential anticompetitive effects, prepare remedy packages to submit to the KFTC, and consider the possibility of extended review periods that could impact business considerations such as closing dates for the parties. Also, companies should consider utilizing the recently implemented pre-notification procedure (at least two weeks prior to the submission of a merger filing, the parties may consult with the KFTC regarding substantive issues (see here →)) and voluntary commitment procedure to reduce potentially the period of merger reviews. Lee & Ko’s Antitrust and Competition Practice Group is continuously monitoring and analyzing amendments to the MRFTA, regulations and KFTC enforcement trends. Our team possesses the expertise and experience required to provide the latest and most comprehensive legal advisory services to meet the needs of our clients. If the need for assistance with similar or other antitrust and competition law matters should arise, please contact Lee & Ko’s Antitrust & Competition Practice Group.  

On April 23, 2025, the Korea Fair Trade Commission (KFTC) announced and implemented the amendment to the "Guidelines on the Operation and Evaluation of Competition Compliance Programs (CP)" (Competition CP Guidelines). The Competition Compliance Program (Competition CP) is an internal compliance system, which may include education or supervision mechanisms, established and operated by companies to comply with Korean competition laws. The KFTC performs evaluations on companies adopting Competition CP for voluntary compliance with laws and regulations under the KFTC’s authority, assigns ratings from the evaluation results, and provides incentives such as mitigation of corrective measures, reduction on administrative fines, and exemption from ex-officio investigations based on the ratings. With the recent growing interest in Competition CP, followed by the significant increase in the number of companies applying for Competition CP evaluation, there emerged the need to revise the evaluation criteria in order to encourage the adoption of Competition CP and ensure substantive Competition CP rating evaluations. With the amended Competition CP Guidelines, the KFTC has adopted more rigorous evaluation criteria to provide rating-based incentives primarily to companies with substantive Competition CP systems, while also reducing disadvantages to companies with violation histories to incentivize them to adopt the Competition CP system. We summarize below the key details of the amendments to the Competition CP Guidelines for further reference. 1. Key Amendments to the Competition CP Guidelines     1) Introduction of Designation System for Excellent Companies         The amended Competition CP Guidelines have simplified the previous six-tier rating system (AAA, AA, A, B, C, D) to a three-tier rating system (AAA, AA, A), while maintaining the previous rating standards.                  Before the amendment, incentives such as mitigation of corrective measures, reduction of administrative fines, and exemption from ex officio investigations were provided to all AAA, AA, and A-rated companies. Under the amended Competition CP Guidelines, benefits for A-rated companies will be abolished, and incentives will only be provided to AAA and AA-rated companies. However, given there is a grace period for policy changes, the abolished incentives for A-rated companies will apply starting from the 2026 Competition CP rating evaluation.              2) Violation Histories to Result in Less Disadvantages         The pre-amended Competition CP Guidelines adopted an "automatic rating downgrade" system where Competition CP operating companies that received sanctions such as administrative fines or criminal referrals for violating competition laws would have their ratings downgraded by up to two levels. However, the amended Competition CP Guidelines have now abolished this approach and instead reduced the disadvantage to a deduction of five evaluation points. Additionally, the amended Competition CP Guidelines specify that companies applying for Competition CP rating evaluation for the first time will not be subject to deductions for past violations.         The amended Competition CP Guidelines, however, have introduced qualitative evaluation criteria to maintain rigorous Competition CP assessments. The Evaluation Review Committee of KOFAIR (Korea Fair Trade Mediation Agency) may downgrade a company’s final ratings or exclude a company from receiving excellent company designation if the company causes social controversy due to competition law violations or significantly undermines the credibility of the Competition CP system.         The amended Competition CP Guidelines have also abolished the "rating deferral system" that suspended the evaluation process when the KFTC launched an investigation into violations. Under the amended Competition CP Guidelines, Competition CP rating evaluations will proceed on schedule even when an investigation has been launched or an examination report was issued during the evaluation process. This amendment was implemented to address unfair situations where companies faced delays in evaluation when ultimately no charges resulted.     3) Other Changes (Extra Points, Changes in Evaluation Procedure, etc.)         The amended Competition CP Guidelines have introduced a maximum grant of 1.5 extra points for companies which received "excellent" or higher grades in the KFTC's evaluation of the performance of their obligations under subcontracting, distribution, agency, and franchise agreements in the previous year.         The criteria for granting extra points for the establishment and operation of a self-regulated dispute mediation organization have also been modified. Previously, 0.7 points were granted for the establishment of a mediation organization, and 0.3 points for receiving and handling dispute-related opinions collectively. However, under the amended Competition CP Guidelines, the points for establishment have been reduced to 0.4, while the categories for opinion reception (0.2 points) and handling performance (0.4 points) have been separated and the corresponding points have been increased.         The evaluation process has been restructured as well. The previous process of Stage 1 (document evaluation), Stage 2 (on-site evaluation), and Stage 3 (in-depth interviews) has been restructured to Stage 1 (document evaluation including grants on extra points), Stage 2 (face-to-face evaluation), and Stage 3 (on-site evaluation). Under the amended Competition CP Guidelines, on-site evaluations will be conducted only for those companies scoring 80 points or higher after the first two stages, or when the Evaluation Review Committee determines as necessary. This amendment seeks to reduce the burden on the evaluators while securing comprehensive reviews for companies likely to qualify for an AA-rating or higher. 2. Implications of the Competition CP Guidelines Amendment     The KFTC has emphasized the development of a meaningful voluntary compliance culture that goes beyond the formal operation of competition compliance systems. The amended Competition CP Guidelines reflect the KFTC’s fundamental policy direction and include various measures to strengthen the core purpose and effectiveness of the Competition CP system.     The amended Competition CP Guidelines aim to enhance the quality of Competition CP operations by limiting incentives to exemplary companies. To receive these benefits, companies must develop Competition CP systems that address the evaluation criteria while making continuous efforts to ensure that their voluntary compliance programs function effectively. Notably, since on-site evaluations—which verify the accuracy of documents and face-to-face evaluation results—are mandatory for ratings of AA or higher, company-wide attention and participation would be required.     Furthermore, the amended Competition CP Guidelines have made the adoption of Competition CP more accessible by reducing disadvantages for companies with violation histories. Under the previous system, companies with histories of competition law violations had virtually no likelihood of achieving high Competition CP ratings, causing such companies to abandon compliance programs entirely. The amended Competition CP Guidelines have significantly reduced the deductions applied for past violations and have completely exempted deductions on companies applying for a Competition CP rating evaluation for the first time. Therefore, companies with violation histories are provided with an equal opportunity to benefit from Competition CP operations by demonstrating their commitment to future competition law compliance.      Considering these changes, it is recommended to establish a substantive compliance framework focused on fostering a long-term competition law compliance culture, rather than pursuing short-term strategies solely for obtaining incentives. If there are any questions and/or any legal assistance is required on this matter, please contact Lee & Ko’s Antitrust and Competition Group.