A PYMNTS Company

Korea’s Antitrust Regulator Orders Samsung to Rectify Business Interference Practices

 |  April 10, 2024

South Korea’s Fair Trade Commission (KFTC) has issued a mandate to Samsung Electronics instructing corrective measures amid accusations of meddling with the operations of its authorized retail stores. The directive comes in response to alleged coercive tactics employed by Samsung, spanning from January 2017 to September 2023, as unveiled by the KFTC.

The antitrust regulator contends that Samsung compelled retailers to divulge their pricing details to the company, wielding a significant impact on the landscape of retail transactions. Specifically, Samsung mandated sellers to input their selling prices into its system, amassing retail price information encompassing a vast array of products, from refrigerators to washing machines. The scope of this data collection extended to 15,389 products and involved 159 agents nationwide as of 2020, amplifying concerns over market transparency and fair competition.

According to the KFTC, Samsung utilized this data to assess the performance of its agents, thereby determining incentives and rewards. However, following the initiation of an investigation by the regulatory body, Samsung discontinued these practices in October 2023.

The KFTC’s scrutiny revealed a breach of the country’s fairness of franchise transactions act, wherein the practice of coercing price disclosures was deemed tantamount to interference in business operations.

An official from the KFTC emphasized the confidentiality of sales margin information, stressing its critical role in shaping contractual agreements between parties. “Such a practice constitutes an interference of business operations that violates the country’s fairness of franchise transactions act,” the official remarked. “Information on sales margins is deemed confidential as it could affect contract terms and conditions between the two sides,” he further added.

Source: Korea Joongang Daily