South Korea's Fair Trade Commission established standards for evaluating the normal pricing of corporate trademark usage fees, marking the first regulatory framework for internal transactions involving brand rights. The FTC created detailed criteria and systems to assess whether trademark fees paid between holding companies and affiliates within business groups are appropriate. This development addresses a longstanding enforcement gap, as trademark usage fees have been identified as a primary means of profit extraction by controlling family shareholders, yet no regulatory action had been taken due to the absence of evaluation standards.
FTC Establishes First Standards for Trademark Fee Evaluation
The Fair Trade Commission recently developed standards and systems for determining normal pricing of corporate trademark usage fees. These transactions occur between group holding companies and their affiliates, where affiliates use trademark rights and pay fees to the holding company. According to the FTC, the specific details of the standards have not yet been publicly disclosed. Industry observers noted on the 13th that the establishment of these criteria represents the first regulatory framework for assessing the appropriateness of trademark fee transactions.
Controlling Family Shareholders Dominate Trademark Fee Transactions
In December, the FTC released its "2025 Analysis of Internal Transactions of Public Disclosure Business Groups," revealing that 80.2% of conglomerates with controlling shareholders (65 groups) engaged in paid trademark transactions. This rate significantly exceeded the 63.6% rate among groups without controlling shareholders (7 groups). Among recipient companies in groups with controlling shareholders (104 companies), more than half (55.8%, or 58 companies) had controlling family ownership stakes of 20% or more. These companies received 81.8% of the total trademark usage fees collected across all groups with controlling shareholders. The FTC has monitored trademark transactions as internal dealings closely connected to controlling families based on these concentration patterns.
FTC Conducts Investigations into Hanwha and CJ Groups
The FTC has not previously sanctioned any cases involving excessive corporate trademark usage fees due to the lack of appropriate evaluation standards. This absence of criteria made enforcement difficult even when profit extraction or unfair support through trademark transactions was suspected. Following the establishment of the new standards, the FTC recently conducted on-site investigations of several major business groups including Hanwha and CJ.
FAQ
What standards did South Korea's Fair Trade Commission establish?
The Fair Trade Commission established standards for evaluating the normal pricing of corporate trademark usage fees and created systems to assess the appropriateness of these transactions between holding companies and affiliates within business groups.
What percentage of conglomerates with controlling shareholders engaged in paid trademark transactions?
According to the FTC's December analysis, 80.2% of conglomerates with controlling shareholders (65 groups) engaged in paid trademark transactions, compared to 63.6% of groups without controlling shareholders (7 groups).
Which business groups did the FTC investigate regarding trademark usage fees?
The FTC recently conducted on-site investigations of several major business groups including Hanwha and CJ following the establishment of the new trademark fee evaluation standards.
