By Lee Hyo-sik
Korean companies were fined a combined 3.3 trillion won ($3.1 billion) abroad over the past decade for collusion and other unfair business practices, the Korea Chamber of Commerce and Industry (KCCI) said Monday. Local firms were obliged to pay penalties mostly in the United States and Europe, with China recently becoming more stringent on Korean businesses operating there for irregular activities.
According to the KCCI, domestic companies were punished with a total of 3.28 trillion won in fines from 2005 through 2013. Most of the penalties were imposed by regulators in the United States (51.4 per cent) and Europe (46.4 per cent).
"Companies should pay more attention to anti-trust laws in the United States and Europe, otherwise, they could suffer huge damage if they break the rules," said Jeon Su-bong, head of KCCI's Research Division. "In recent years, China, which is now Korea's largest trading partner, has become harsher on collusion and other unfair business practices among Korean and other foreign companies. Local businesses should be extra careful when heading abroad."
Jeon stressed that businesses should fully understand the regulatory standards of host nations and abide by the rules against unfair practices. "Large companies have resources to deal with anti-trust risks overseas, but small-and medium-sized enterprises (SMEs) don't. So, small firms must pay extra attention in the first place."
According to the KCCI, the U.S. government has recently raised the maximum fines for individuals committing anti-trust violations to $1 million from $350,000, and to $100 million from $10 million for corporations. "Those involved in unfair business practices could be put behind bars for the maximum of 10 years, up from the previous three-year limit. In particular, the U.S. government is increasingly targeting companies from Japan, Korea, Taiwan and other Asian countries," it said.
From 2005 to 2014, Asian firms accounted for 76.9 percent of anti-trust fines levied by the U.S. government. Korean companies were fined a combined $1.26 billion over the last 10 years, the second largest after Japan's $3.35 billion.
The KCCI also said Europe has been toughening its laws against cartels, imposing a total of 8.42 billion euros in fines on European and non-European companies for unfair practices from 2010 through 2013, up sharply from 3.16 billion euros from 2000 to 2004.
China, the world's fastest-growing economy has also taken a tougher stance against foreign companies since 2008 when it enacted an anti-monopoly law. Non-Chinese businesses of automobiles, pharmaceuticals and food industries have mostly been targeted for the nation's anti-trust campaign.
Korean companies were fined a combined 3.3 trillion won ($3.1 billion) abroad over the past decade for collusion and other unfair business practices, the Korea Chamber of Commerce and Industry (KCCI) said Monday. Local firms were obliged to pay penalties mostly in the United States and Europe, with China recently becoming more stringent on Korean businesses operating there for irregular activities.
According to the KCCI, domestic companies were punished with a total of 3.28 trillion won in fines from 2005 through 2013. Most of the penalties were imposed by regulators in the United States (51.4 per cent) and Europe (46.4 per cent).
"Companies should pay more attention to anti-trust laws in the United States and Europe, otherwise, they could suffer huge damage if they break the rules," said Jeon Su-bong, head of KCCI's Research Division. "In recent years, China, which is now Korea's largest trading partner, has become harsher on collusion and other unfair business practices among Korean and other foreign companies. Local businesses should be extra careful when heading abroad."
Jeon stressed that businesses should fully understand the regulatory standards of host nations and abide by the rules against unfair practices. "Large companies have resources to deal with anti-trust risks overseas, but small-and medium-sized enterprises (SMEs) don't. So, small firms must pay extra attention in the first place."
According to the KCCI, the U.S. government has recently raised the maximum fines for individuals committing anti-trust violations to $1 million from $350,000, and to $100 million from $10 million for corporations. "Those involved in unfair business practices could be put behind bars for the maximum of 10 years, up from the previous three-year limit. In particular, the U.S. government is increasingly targeting companies from Japan, Korea, Taiwan and other Asian countries," it said.
From 2005 to 2014, Asian firms accounted for 76.9 percent of anti-trust fines levied by the U.S. government. Korean companies were fined a combined $1.26 billion over the last 10 years, the second largest after Japan's $3.35 billion.
The KCCI also said Europe has been toughening its laws against cartels, imposing a total of 8.42 billion euros in fines on European and non-European companies for unfair practices from 2010 through 2013, up sharply from 3.16 billion euros from 2000 to 2004.
China, the world's fastest-growing economy has also taken a tougher stance against foreign companies since 2008 when it enacted an anti-monopoly law. Non-Chinese businesses of automobiles, pharmaceuticals and food industries have mostly been targeted for the nation's anti-trust campaign.
