Hankook Tire & Technology Co. was caught trying to keep its retail outlets from selling tire prices below a certain price and was fined more than 100 million won.
The Fair Trade Commission(FTC) said on July 21 that it will impose a correction order and a fine of 117 million won on Hankook Tire for its actions that forced its retail outlets to sell some tires only within the designated sales price range while supplying them to the retailers.
From January 2017 to November last year, Hankook Tire supplied products exclusively for retail outlets to them, and notified them to comply with the range of discounts (-28 to - 40 percent) compared to the standard price.
Hankook Tire internally sets the base price for each product and supplies the product at a certain percentage discount compared to this price. Retailers' exclusive products are tires that Hankook Tire supplied to retailers at a lower price than the existing supply price without going through a wholesale to differentiate their products and strengthen their control over their stores.
In addition, Hankook Tire supplied foreign tires, such as Maxis in September 2017 and Michelin and Pirelli, to its franchises in March and June last year, respectively, and forced them to abide by the range of sales discount rates when they will sell them. The discount rate set by Hankook Tire was -5 to -15 percent for Maxis, -9 to -15 percent for Michelin and -20 to -25 percent for Pirelli.
Hankook Tire forced retailers to comply with the sales price by preventing them from entering prices outside the range of the sales rate specified in the computer trading system that inputs customer information, purchase and sales details when selling tires, the FTC said.
