SOMA Law Group has represented a Korean consumer goods company throughout an unannounced on-site investigation (dawn raid) conducted by the Korea Fair Trade Commission (KFTC) concerning alleged resale price maintenance, attending the company's premises on the day of the raid.
The client is a consumer goods company that sells its own-brand products through online and offline distribution channels. KFTC investigators arrived at the company's offices in the morning without prior notice and began the investigation. SOMA was contacted by the company and went to the premises immediately to join the proceedings.
Resale price maintenance — where a business sets the price at which its distributors or other trading partners resell its products and requires them to comply — is prohibited in principle under Article 46 of the Monopoly Regulation and Fair Trade Act (FTA). Routine distribution practices, such as asking resellers to observe a retail price, monitoring online minimum prices, or adjusting supply to discounting retailers, can fall within the scope of an allegation. Establishing the scope of the investigation and the issues at stake at the outset is therefore critical.
Confirming the scope of the investigation
On arrival, SOMA reviewed the KFTC's official investigation notice to confirm the purpose of the investigation, the alleged violation, and the period and scope under review. On that basis, SOMA briefed the company's staff on the procedure, the extent of cooperation required, and the points to observe, and monitored throughout the day whether the investigators' requests remained within the scope stated in the notice.
Formal interviews of the CEO and mid-level managers
The investigators conducted formal interviews of the company's CEO and of mid-level managers, including team leaders responsible for sales and distribution. The written statements recorded during these interviews serve as key evidence on the facts in the subsequent review process. Speculative answers given from memory, or statements that go beyond the question asked, are difficult to correct once they are on the record.
SOMA attended every interview, focusing on the following:
- Confirming the purpose and scope of each question, and asking for clarification of ambiguous questions
- Helping interviewees distinguish verified facts from personal opinion or speculation
- Ensuring that matters which could not be confirmed on the spot were not stated definitively, but answered after the facts had been checked
- Reviewing each written statement with the interviewee at the close of the interview to confirm that it accurately reflected what was said
Responding to document requests
During the investigation, the investigators requested a range of documents. For each request, SOMA first confirmed with the company's staff whether the material actually existed, and which department held it and in what form, before responding. Stating that a non-existent document exists, or denying the existence of a document without checking, can both undermine the credibility of the company's account and give rise to allegations of obstruction later in the process.
The on-site investigation concluded within a single day.
Why counsel matters during a dawn raid
KFTC on-site investigations typically begin without warning, and interviews and document requests are concentrated within a short period. How a company responds on the day shapes the entire process that follows, from the examiner's report and the submission of written opinions to deliberation by the Commission. On site, counsel's role includes:
- Confirming the scope of the investigation against the official notice, and raising objections to requests that fall outside it
- Preventing conduct that could be construed as obstruction — such as deleting or concealing materials or delaying investigators' access — and the administrative fines or criminal penalties that may follow
- Observing the collection of electronic data, including digital forensic imaging, to confirm what is collected and how
- Attending interviews to ensure the accuracy and consistency of statements
- Marking materials that contain trade secrets and keeping a record of documents produced
- Identifying the issues that emerged during the investigation in preparation for the next stages
A dawn raid begins without warning
A dawn raid leaves a company no time to prepare. In the first hour or two after investigators arrive, it is decided who will deal with them, which materials are held where, and who will be interviewed — and the response in that window sets the direction of the entire investigation. Companies that manage pricing across distribution channels should decide in advance who will receive investigators, how the matter is escalated internally, and which counsel to call, and should contact counsel as soon as investigators arrive.
The end of the on-site investigation is not the end of the case. On the basis of the statements and materials it has obtained, the KFTC may request further documents or interview individuals again, and the process may then proceed to an examiner's report and deliberation by the Commission. An accurate record of what was said and what was produced on the day is the starting point for every step that follows.
The client is a consumer goods company that sells its own-brand products through online and offline distribution channels. KFTC investigators arrived at the company's offices in the morning without prior notice and began the investigation. SOMA was contacted by the company and went to the premises immediately to join the proceedings.
Resale price maintenance — where a business sets the price at which its distributors or other trading partners resell its products and requires them to comply — is prohibited in principle under Article 46 of the Monopoly Regulation and Fair Trade Act (FTA). Routine distribution practices, such as asking resellers to observe a retail price, monitoring online minimum prices, or adjusting supply to discounting retailers, can fall within the scope of an allegation. Establishing the scope of the investigation and the issues at stake at the outset is therefore critical.
Confirming the scope of the investigation
On arrival, SOMA reviewed the KFTC's official investigation notice to confirm the purpose of the investigation, the alleged violation, and the period and scope under review. On that basis, SOMA briefed the company's staff on the procedure, the extent of cooperation required, and the points to observe, and monitored throughout the day whether the investigators' requests remained within the scope stated in the notice.
Formal interviews of the CEO and mid-level managers
The investigators conducted formal interviews of the company's CEO and of mid-level managers, including team leaders responsible for sales and distribution. The written statements recorded during these interviews serve as key evidence on the facts in the subsequent review process. Speculative answers given from memory, or statements that go beyond the question asked, are difficult to correct once they are on the record.
SOMA attended every interview, focusing on the following:
Responding to document requests
During the investigation, the investigators requested a range of documents. For each request, SOMA first confirmed with the company's staff whether the material actually existed, and which department held it and in what form, before responding. Stating that a non-existent document exists, or denying the existence of a document without checking, can both undermine the credibility of the company's account and give rise to allegations of obstruction later in the process.
The on-site investigation concluded within a single day.
Why counsel matters during a dawn raid
KFTC on-site investigations typically begin without warning, and interviews and document requests are concentrated within a short period. How a company responds on the day shapes the entire process that follows, from the examiner's report and the submission of written opinions to deliberation by the Commission. On site, counsel's role includes:
A dawn raid begins without warning
A dawn raid leaves a company no time to prepare. In the first hour or two after investigators arrive, it is decided who will deal with them, which materials are held where, and who will be interviewed — and the response in that window sets the direction of the entire investigation. Companies that manage pricing across distribution channels should decide in advance who will receive investigators, how the matter is escalated internally, and which counsel to call, and should contact counsel as soon as investigators arrive.
The end of the on-site investigation is not the end of the case. On the basis of the statements and materials it has obtained, the KFTC may request further documents or interview individuals again, and the process may then proceed to an examiner's report and deliberation by the Commission. An accurate record of what was said and what was produced on the day is the starting point for every step that follows.