South Korea`s antitrust watchdog will seek to introduce class action lawsuits to bolster consumer protection from business collusion and other anti-competitive behaviors, widening the scope of class action litigation beyond securities events such as accounting fraud.

A ranking official at the Korea Fair Trade Commission (KFTC) told reporters Thursday that the agency it is reviewing to introduce a regulation enabling consumers to take class suit against companies charged with unfair practice of fixing prices or colluding to influence wholesale or resale prices.

If the class action is allowed to go forward, people under similar damage could receive the same relief and compensations from the damage suit won by representatives. Currently, Korea limits this litigation action to only securities events involving stock price manipulation or accounting fraud in order to prevent random employment.

This class action could be applied to a case in 2011, when the KFTC levied a fine of 10.6 billion won ($9.1 million) against four local cheese makers for their collusion in raising shelf prices. That time, consumers received no compensation for actual damages because class action was unavailable in this case. Consumers could file individual civil suit against companies for monetary compensation for damages but it is difficult to calculate the amount of damages per person. In addition, the damage averages just dozens of dollars, making it unreasonable to pay high litigation expenses to get such small compensation.

But the situation will be different with the introduction of class action. Winning the case may lead to a huge amount of money in restitution, and law firms and consumer advocacy groups could gain the upper hands. This also means individual consumers can claim civil damages against a company in an easier manner. But the regulation could pose as additional risk.

By Na Hyun-joon

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