Fair Trade Commission Chairman
By Kang Seung-woo
The governent has planned to launch a full-scale inspection into large corporations in August in a bid to root out any unfair business practices between large and small enterprises.
The Fair Trade Commission (FTC) said Wednesday that it will launch a task force to begin an inspection in August, which will focus on detecting any incidents of large firms’ unfairly wielding power over smaller firms, such as demanding price cuts and stealing technology. The group consists of ranking antitrust officials and private sector experts
The move comes as smaller firms are still feeling the pinch despite a faster-than-expected economic recovery, which is in stark contrast to large firms enjoying record sales and profits.
Prime Minister Chung Un-chan recently voiced concerns about the deepening polarization between large and small firms, ordering the FTC to come up with measures to tackle the problem.
“Large enterprises are leading Korea Inc. with record sales but the benefit of an economic recovery has yet to translate to small firms, which has intensified the economic polarization,” Chung said at the national policy coordination meeting.
Samsung Electronics reported a record operating profit of over 5 trillion won in the second quarter earlier this month, while other big companies are expected to post solid earnings.
“Local big conglomerates have reported results in record-setting fashion. Smaller companies have complained of it,” an FTC official said.
“An inspection into large firms’ unfair business practices has already begun on orders from the prime minister,” the official said.
Officials from the Ministry of Strategy and Finance, Ministry of Knowledge, Economy, Ministry of Labor and Small and Medium Business Administration, the Federation of Korean Industries (FKI) and the FTC began gathering related information from 1,500 small and medium businesses earlier this month.
“It is the first time for the corporate watchdog to look into big conglomerates’ attempts to cut prices and steal technology,” the official said.
“Based on the result, we plan to conduct extensive on-site inspections next month.”
Given the importance of the prime minister’s order to establish fair and sound rapports between two sides, there is speculation that a majority of leading companies are likely to be on the check list.
“We should not view it as negative that corporations reaped huge profits, but if we find any unfair practices, we will conduct an on-site inspection,” the official said.
“Until now, we have yet to decide which company to inspect, but the manufacturing industry will be monitored most closely.”