Cable firms fined for collusion

By Kim Yoo-chul

The Fair Trade Commission (KFTC) said Tuesday it will fine 13 local electric wire manufacturers a total of 56.5 billion won for price collusion.

The announcement followed efforts by the KFTC to ferret out price fixing to help the government’s anti-inflation battle.

The antitrust watchdog asked prosecutors to launch a thorough investigation into seven of them including Taihan Electric Wire, the leading Korean cable manufacturer.

LS Cable, Gaon Cable and Taihan were ordered to pay 34.02 billion, 6.75 billion and 3.03 billion won, respectively.

Samsung Electronics was slapped with a 2.19 billion won fine. The electronics giant said that it was not included in the list of firms to be put under investigation.

``These wire manufacturers were found to have worked together in price fixing schemes for their electric wire products from 2003 to 2006,’’ said Jeong Jung-won, an official at the regulator’s cartel bureau, in a background briefing to reporters.

Jeong said the affected firms were also suspected of covertly conspiring to fix bidding prices for major supply contracts from 2003 to 2008.

This is the second time that the FTC issued fines for price fixing by local wire makers since November last year.

Although the companies are ready to accept the punishment, they claimed that the price cartel was ``inevitable’’ as the nation’s electric wire market is saturated.

An LS Cable spokesman, Pitt Kim, said the company’s legal team has begun reviewing the case to consider counter-actions.

``LS Cable is continuing required educational programs for all employees since last year for transparency in management,’’ said Kim.

Samsung Electronics spokesman Kevin Jeong said the issue is not related to the world’s biggest technology company as Samsung separated its cable business in December 2004.

``That’s an issue for electric wire companies and Samsung is not included among the seven under investigation by prosecutors,’’ said Jeong.

An official from Taihan Electric Wire said it will fully cooperate with the regulator and try to make fair competition.

``I can say `one demander and multi suppliers’ is the nature of the local electric wire industry, making it possible for KT and KEPCO seize the bargaining power in price,’’ said a high-ranking industry executive, asking not to be identified.

``If a firm loses in the bidding which happens once or twice a year, then it will be forced to apply contingency plans to survive that year,’’ added the unnamed executive.