South Korean Antitrust Fines Average 21 Times Higher for US Firms Than Domestic Firms, New Report Finds

WASHINGTON-South Korea's competition regulator imposed fines on American companies that averaged 21 times those imposed on Korean companies, according to a new report from the Information Technology and Innovation Foundation (ITIF). The findings support concerns about unequal enforcement against leading American technology companies. The report warns that such treatment could undermine economic and technological cooperation between the two allies.

The report analyzes newly compiled Korea Fair Trade Commission (KFTC) enforcement data from 2016 through 2025. It compares surcharge penalties-the agency's main financial penalty for competition-law violations-across American, Korean, and other foreign companies.

Exceptionally large penalties on three American digital infrastructure and online platform providers drive the disparity, the report finds. These companies accounted for 96.5 percent of all penalty amounts the KFTC imposed on American firms during the decade analyzed.

"The KFTC should apply the same standards to American and Korean companies," said Jack Nicastro, an antitrust policy analyst with ITIF's Schumpeter Project on Competition Policy and a coauthor of the report. "The enforcement record shows that leading American technology companies face a disproportionate penalty burden. The KFTC should impose penalties that reflect the seriousness of the conduct and remain consistent across comparable cases."

For example, the report finds that leading American tech firms faced average penalties of ₩219 billion tied to corrective orders, compared with ₩32 billion for major Korean business groups' criminal referrals. Corrective orders require companies to change their practices or structure. Criminal referrals send cases involving more serious wrongdoing to prosecutors, yet the Korean groups faced substantially smaller average fines in this more severe category.

The gap also persists beyond abuse-of-dominance cases, which account for 87 percent of the total value of penalties imposed on American firms. Even after excluding that category, the average American fine remains three times the overall Korean average.

The broader distribution shows a similar imbalance. Using corporate sales as a rough benchmark, the report finds that foreign firms' share of total penalties was about eight percentage points higher than their sales share. For the major Korean business groups examined, the pattern was reversed: Their penalty share was about eight percentage points lower than their sales share.

The enforcement record also raises questions about expanding the KFTC's authority. South Korea's proposed Online Platform Fairness Bill would add platform-specific obligations and allow fines of up to 10 percent of relevant sales. The report warns that such regulation could deepen disproportionate burdens on American firms and function as a trade barrier.

Both countries have committed to fair competition enforcement, but those commitments offer limited means to compel compliance. The report notes that the Joint Committee under the Korea-U.S. Free Trade Agreement (KORUS) has failed to convene to discuss Korea's commitments to procedural fairness and nondiscrimination under the Korea Strategic Trade and Investment Deal. It also argues that broad tariff pressure has failed to stop the disputed practices.

The findings strengthen the case for a broader investigation under Section 301 of the Trade Act of 1974, the report concludes. That authority allows the Office of the U.S. Trade Representative (USTR) to investigate unreasonable or discriminatory foreign practices that burden American commerce without first establishing a KORUS violation.

"South Korean policymakers need to honor the agreement with the United States at its word and meet Korea's digital trade commitments," said Rodrigo Balbontin, ITIF's associate director for trade and a coauthor of the report. "If Korea does not change course, USTR could respond beyond tariffs by imposing fees or restrictions on Korean services or suspending other trade concessions."

The data also show a sharp contrast in penalties on American and Chinese companies: American firms account for more than 81 percent of penalty amounts imposed on foreign firms, compared with less than 1 percent for Chinese firms.

The United States and South Korea are close allies with deep trade, investment, and cultural ties. For example, Korean semiconductors support American AI development, while American digital platforms help Korean businesses reach customers and operate more efficiently. Unresolved disputes over KFTC enforcement and digital platform regulation are already straining the bilateral trade relationship and could lead to retaliation that harms both economies.

"Discriminatory enforcement diverts staff and investment from innovation at a time when American companies face intense technological competition with China," said Sejin Kim, associate director of ITIF's Center for Korean Innovation and Competitiveness and a coauthor of the report. "The United States and South Korea need each other for economic growth, technological innovation, and national security. Addressing these concerns would help preserve a partnership that benefits both countries."

The report urges South Korea to reconsider expanding platform regulation and apply its existing competition laws fairly and transparently, with penalties proportionate to the alleged wrongdoing and consistent with those imposed on Korean firms. Continuing the current approach would needlessly strain the bilateral relationship. Correcting unequal treatment would help both countries preserve the economic and technological cooperation vital to their shared prosperity and security.

• Read the report (available in English and Korean).

Contact: Sydney Mack, [email protected]