All-time large compensation of maximum 267,280,000 won has been paid to an internal whistle-blower

ACRC paid total 505,100,000 won of reward to 56 whistle-blowers

March 14, 2018

Anti-Corruption and Civil Rights Commission

The Republic of Korea

All-time large amount of reward at 267,280,000 won has been granted to a whistle-blower who reported advance plotting for voluntary reporting about illegal price-fixing among karaoke machine companies.

The Anti-Corruption and Civil Rights Commission (ACRC) announced on the 14 that it held a plenary commission meeting in February this year and paid total 505,100,000 won of reward money to 56 whistle-blowers including the above-mentioned one.

The cases of whistle-blowing to which reward was granted this year have generated total 6,319,750,000 won of national and local government income, out of which 4,896,000,000 won of fine was from the karaoke machine companies.

In the case of "karaoke machine companies' plotting for voluntary reporting of illegal price-fixing" to which the all-time large amount of reward since launching of the reward system was granted, two karaoke machine companies had fixed the prices for karaoke machines and the service of adding new songs from 2007 to 2009.

When the Fair Trade Commission began its investigation, the two companies plotted voluntary reporting of their price-fixing for the purpose of getting reduction and exemption of fine. The company that did the voluntary reporting first got all the fine exempted and the other company got 50% reduction of the fine.

However, in 2014, a person from one of those companies reported the case, to reveal the plotting for voluntary reporting of price-fixing. The Fair Trade Commission canceled the two companies' position as voluntary reporters and the decision to reduce the fine, then imposed total 4,896,000,000 won of fine to them.

The ACRC said that the unlawful act of the companies which undermined the market order by committing illegal price-fixing and made an ill use of the leniency system to reduce fine for voluntary reporters could be exposed from the reporting by the whistle-blower and the largest-ever amount of reward money since the beginning of the reward system for whistle-blowers has been granted to the whistle-blower.

Other than the case, the ACRC also granted ▴ 80,100,000 won of reward to a whistle-blower who reported illegal price-fixing that took place in the process of bidding for the government project for preventing mineral residues from being washed away and ▴ 5,700,000 won of reward to a whistle-blower who reported a pharmaceutical company's act of purchasing gift cards with corporate credit cards and exchanging them with cash to offer it to hospitals, clinics, and pharmacies as sales promotion expenses, for the purpose of promoting sales of its products.

The ACRC is paying reward money to whistle-blowers who brought about the recovery or increase of central and local government income from fine imposed to illegalities and other unfair acts. The amount of the reward amounts up to 20% of the income given to the government from their whistle-blowing. This year's budget for whistle-blowing reward is 1,989,000,000 won.

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The Deputy Director General for Complaints Deliberation of the ACRC said, "It is not easy to bring unlawful acts committed in secret internally such as price-fixing or rebate to light, if they are not reported by an internal whistle-blower. We will continue our active efforts to create a social atmosphere where an internal whistle-blower who takes personal disadvantage to report unlawful acts can be protected and respected, by offering sufficient reward money."