SEOUL, KOREA – This year, the Korean Fair Trade Commission (KFTC) levied a record fine on businesses. The collected amount this year up to November rose by 163% compared to last year, reaching a total of 913 billion won (USD850 million). This is a clear indication that the intensity and sanctions of the investigation has increased. Some analysts say that this provides too much pressure on businesses during the economic recession. Still others say that unfair practices of large companies have gone too far.
The biggest case was the collusion of noodle companies fined around USD125 million. Four companies, including Nongshim, Korea’s largest processed food manufacturer, have fixed the price in collusion for the last nine years. Eight of the largest construction companies were fined around USD103 million. Samsung Electronics and LG Electronics were also fined around USD41 million for fixing the price of electronics including TV, computers, and washing machines early this year.
Annual levies from 2008 to 2009 were merely around USD100 million. However, as the principle of state affairs administration has shifted toward a ‘fair society’ from 2010, and discussion on economic democratization ensued, KFTC’s investigation also intensified.
A recent survey conducted by The Korea Chamber of Commerce and Industry (KCCI) showed that 61.6% of SMEs and 62.0% of foreign companies responded that concentration of economic power within large companies is attributed to ‘Large companies’ intrusion on SMEs territory’ while 49.7% of large companies responded that the reasoning was ‘technology development and product competitiveness of large companies’. In terms of the financial difficulties of SMEs, 46.3% of large companies responded that it is due to the ‘economic recession’ while SMEs (41.7%) and foreign companies (50%) attributed this to ‘unfair practices of large companies’.
More related stories: