South Korea: Corporate watchdog adding punitive damages

South Korea’s corporate watchdog said Sunday that it will introduce a punitive damages system to the local distribution industry as part of its efforts to root out unfair business practices and strengthen consumer protection.

The Korean Fair Trade Commission said it will revise related laws to impose punitive damages of up to three times the actual damage from business practices such as an unfair payment cutback of supplied goods and returns that occur between large shopping mall operators and small shops.

“Large distributors which engaged in deep-seated, unfair activities will be forced to pay significant sums in damages that go far beyond actual losses incurred by smaller businesses,” KFTC Chairman Kim Sang-jo said in a press conference. “The punitive damages system will deter big outlets from abusing their power against small tenants and help ill-treated businesses get decent compensation.”

The South Korean distribution industry is currently led by mega-sized retailers, department stores and discount outlets that lease their spaces to small businesses.

Full Content: Korea Times

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