May 08, 2024

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[THE INVESTOR] The Fair Trade Commission plans to investigate cosmetics giant Amorepacific for unfair treatment of franchisee owners of its retail shop Aritaum, according to news reports on July 28.

The FTC, headed by Kim Sang-jo, a former chaebol reform activist, recently launched a task force to review unsolved antitrust cases which decided to probe allegations against Amorepacific first. 

In 2014, an association of Aritaum shop owners filed a complaint against high-handed contracts. They claimed the company forced them to renovate their stores every three to five years and shoulder the costs on their own if they wanted to renew the contract. They also said the company created a separate association of franchisee owners who were more cooperative with the management while discriminating against the existing one.

Amorepacific said the store design needs to be upgraded in line with the fast-changing beauty trends, adding that it would comply with the FTC probe.

The team plans to complete the investigation this year.

Aritaum, launched in 2008, sells products of Amorepacific brands only such as Laneige, Mamonde and Innisfree. Its revenue was 444.1 billion won (US$400 million) last year.

By Song Seung-hyun (ssh@heraldcorp.com)