By Yoon Ja-young
Staff Reporter
HanGlas and KCC have admitted colluding to fix prices on flat glass.
The two, with more than 80 percent of the market between them, are said to have distorted the market by raising prices.
They are estimated to have reaped hundreds of billions of won in undue profit at the expense of consumers.
According to the Free Trade Commission (FTC), HanGlas and KCC reported they had colluded to fix the prices after the commission started investigating them in March. They are likely to receive reduced fines for admitting the violation.
Flat glass is generally used for windows in apartments, cars, furniture and home electrical devices. KCC has 46 percent of the market, while HanGlas takes up 38 percent.
Their collusion is said to have resulted in monopolistic status in the market, resulting in economic damage to consumers.
They agreed not to compete between themselves in terms of prices in November 2006 after they lost price competitiveness due to cheap imports from China. They then raised prices by 10 percent and filed complaints with the government against Chinese glassmakers for dumping practices.
Since then, KCC and HanGlas colluded to raise the prices a number of times, during which they rose by between 40 to 50 percent. It traded at 360 won per kilogram on average in 2006, but neared 500 won in the first half this year.
Their combined sales during the more than two-year collusion period totaled more than 1 trillion won.
The law dictates that the FTC can levy up to 10 percent of total sales in fines for price fixers. However, the FTC has cut fines for the companies that come forward to confess first.
The FTC will determine how much to levy on each company after further investigations. It remains unclear which of the two will enjoy a reduced fine as the first to hold up its hands.
Price fixing is illegal in most countries, but has been tolerated in many emerging economies.
chizpizza@koreatimes.co.kr
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