The Korea Fair Trade Mediation Agency announced on March 23, 2025, that the number of dispute mediation cases in 2024 surged to an unprecedented 4041, reflecting a significant 16% increase from the 3481 cases reported in 2023. This marks the highest annual total since the agency began tracking such cases, showcasing an unsettling trend attributed to the ongoing economic downturn and increased business disputes.
In detail, the 2024 Dispute Mediation Status report highlights a sharp rise in disputes across several sectors. The fair trade category topped the list with 1795 cases, followed closely by subcontracting trade with 1105 cases. Franchise business disputes accounted for 584 cases, and pharmaceutical-related disputes rounded out the list with 457 cases. The report underscored that fair trade cases experienced a staggering 31% increase compared to the previous year, primarily driven by issues related to online platforms.
Online platform disputes notably surged by 45%, rising from 229 cases in the previous year to 333 in 2024. This increase is indicative of growing tensions in the digital marketplace, where many platform operators reportedly lack transparency, leading to frustrations among businesses. As mentioned by agency head Choi Young-geun, "Platform operators sometimes do not provide detailed settlement details, leading to dissatisfaction and mediation applications." This sentiment reflects the complex dynamics that online platforms are experiencing as they grapple with operational and regulatory challenges.
Furthermore, the pharmaceutical sector saw a 35% increase in mediation applications, influenced by disputes over anticipated excessive damages related to contract cancellations in online advertising and licensing agreements. The number of mediation requests in this category jumped from 339 to 457, showing how sensitive the industry is to contractual obligations and consumer protections.
In the realm of franchise business trade, 143 out of 584 cases were tied to excessive penalty fees due to contract cancellations. This scenario has become increasingly common as franchisors and franchisees navigate turbulent economic conditions. Additionally, subcontracting disputes rose by 6%, a reflection of pressures in the construction sector that drove 660 cases—an 8% increase compared to last year—as the construction economy continues to degrade.
Overall, in 2024, the total number of cases resolved through mediation reached 3840, marking a robust 22% increase from the 3151 cases processed in 2023. Out of these, 1450 cases were successfully mediated, indicating a 13% enhancement in resolution rates from the previous year. Direct damage relief amounted to approximately 121.062 billion won, with total direct and indirect damage relief—including reductions in litigation costs—estimated at 128.86 billion won.
However, the mediation success rate fell slightly to 76%, down from 79% the previous year, which agency officials attribute to businesses being less willing to reach settlements when economic pressures mount. As noted by Choi, "The worsening economy likely means that businesses lack the capacity to accept mediation proposals."
The Korea Fair Trade Mediation Agency anticipates further increases in disputes across many fields due to the prevailing economic landscape and accelerating digital transition. There is a pressing need for adapted mediation services as the nature of unfair trade practices continues to evolve and become more complex. Addressing these evolving challenges, the agency aims to expand face-to-face mediation services and introduce more proactive mediation solutions to assist small and medium-sized enterprises in mitigating the impact of unfair trading behaviors.
As the agency continues to refine its strategies, they will also enhance outreach to small business owners to improve their understanding of mediation processes and raise awareness about their rights and available resources. This initiative is crucial as the agency seeks to build trust and facilitate a smooth resolution process for disputes.
Looking ahead to 2025, experts predict that the combination of economic strain and a fast-evolving digital marketplace will create a breeding ground for an even broader array of disputes. Thus, the need for an efficient and effective mediation framework has never been more important. The agency's commitment to enhancing its dispute resolution capabilities will be pivotal in navigating the complexities of this new environment.
