[THE INVESTOR] The Korean Fair Trade Commission imposed a fine of 500 million won (US$459,000) on Hyundai Mobis, the parts arm of the nation’s largest automaker Hyundai Motor, and will report the firm to prosecutors on the suspicion that it forced its agencies to buy car parts.
According to the FTC, Hyundai Mobis had set an excessive goal of selling its car components and forced its regional agencies to buy the products in order to achieve the target from January 2010 to November 2013.
“The sales goals were 3 to 4 percent higher than the original targets submitted by regional sales agencies. If the agencies were not able to achieve the target, Hyundai Mobis forced them to buy the parts,” said Shin Young-ho, head of the nation’s top antitrust watchdog’s market monitoring division.
Under the fair trade law, a company engaged in unfair business practices can be fined up to 2 percent of the firm’s sales.
But the FTC said it failed to accurately determine the exact amount of purchases the dealerships were forced to make.
Hyundai Mobis is not the first company fined by the antitrust watchdog over forcing agencies to make purchases.
In 2013, Namyang Dairy, one of the two major suppliers of dairy products to the Korean market, was fined 12.3 billion won by the FTC for similar charges. The firm was also reported to prosecutors.
Namyang was found to have forced its agencies to buy products unpopular or close to expiry from 2007 to 2012. The problematic dairy products accounted for 20 to 35 percent of total products of the agencies.
In October last year, another local dairy provider Konkuk Dairy was also fined 500 million won for unfair business practices over eight years.
By Shin Ji-hye/The Korea Herald (email@example.com)