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Posted : 2014-04-16 17:34
Updated : 2014-04-16 17:39

SAP Korea avoids regulatory sanctions

By Kim Tae-jong

The country's anti-trust watchdog has decided not to punish the Korean unit of German software giant SAP for unfair business practices.

The Fair Trade Commission (FTC) accepted a "self-corrective" plan drawn up by SAP Korea instead of pursuing punitive measures, FTC officials said Wednesday.

The regulator allows those who violate anti-trust rules to come up with a self-corrective plan, under which they voluntarily fix their unfair practices and provide compensation for victims. If they fulfill their obligations as they promise, they can avoid punishment such as fines.

SAP Korea was accused of abusing its dominant market position to make unfair gains from its client companies.

The FTC's approval of the self-corrective plan is the second of its kind following the one on the two biggest portal operators, Naver and Daum, in February. Under the agreement, the firms promised to commit about 104 billion won ($98 million) to supporting small businesses and promoting consumer protection.

According to the FTC, SAP Korea has sold software such as enterprise resource planning (ERP) and supplier relationship management (SRM) to local companies, but it unfairly refused to accept requests to partially cancel a contract in the event of client companies' merger and acquisition. It also unilaterally cancelled contracts with outsourcing firms, only giving them three months notice.

After the FTC launched a probe into the firm in November, SAP Korea voluntarily corrected those practices and came up with a self-corrective plan to avoid punishment.

"The measure to accept a self-corrective plan is often more effective to make violators compensate victims quickly, because many firms tend to delay due compensation by filing a lawsuit against our decision, which takes two or three years," a FTC official said.

The FTC will have 30 to 60 days to collect opinions from concerned parties and relevant government agencies before making a final decision on the matter. If a self-corrective plan is finally approved, FTC will regularly monitor whether it is properly executed.

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