FTC financially supports suit against Samsung, LG

By Kang Seung-woo

The nation’s anti-trust watchdog said Tuesday that it will support a class-action lawsuit against Samsung Electronics and LG Electronics, which it had previously fined for price fixing of their home appliances.

The Fair Trade Commission (FTC) plans to financially assist the Green Consumer Network (GCN) to secure plaintiffs related to its damage suit against the two companies, an FTC official said.

In the first attempt to financially back up any consumer civic group’s court action against conglomerates, the FTC has offered 100 million won ($88,700) so far.

The commission, chaired by Kim Dong-soo, has made the unprecedented decision in the belief that the fines it imposed on the two due to anti-competitive activities have played a limited role in containing their irregularities.

Criticism has run amok that only consumers were the victims of the malpractice perpetrated by the companies, which saw their fines reduced or cancelled due to a leniency program for “whistleblowers.”

When companies attempt collusion over prices they are freed from penalties if they confess. A second company doing so has its fines halved.

On the back of the FTC’s financial aid, the GCN, which initially planned to collect plaintiffs by Feb. 14, has extended the deadline to the end of next month and the civic group will spend the FTC subsidy on advertisements to gather further participants.

The FTC’s move comes as Samsung and LG were earlier this year fined 25.81 billion won and 18.83 billion won, respectively, for fixing the prices of washing machines, flat panel TVs and laptop computers.

According to the FTC, the two tech giants were found to have held secret meetings between 2008 and 2009 through which they colluded to keep washing machine prices at an agreed-upon level.

Similar tactics were used in manipulating the prices of flat panel TVs and laptop computers. Through the secret gatherings, the two companies reduced competition and raised prices.

Consumers who purchased any of the home appliances between 2008 and 2009 are eligible to join the damage suit.

“In the United States, there is a legal system that forces companies involved in unfair trade practices to compensate for losses three times as much as the actual damage. We plans to file a lawsuit against companies that conclude a secret treaty but get exempted from fine via the leniency program,” said an official of GCN.

Meanwhile, the FTC put a brake on conglomerate-run super supermarkets (SSMs) for the first time.

The anti-trust watchdog ordered Lotte Shopping to sell a Good Morning Mart in Daejeon to a third party within six months, citing a concern over limiting fair market competition.

Recently, Lotte Shopping purchased a 99 percent stake in CS Mart, which has 35 Good Morning Marts as direct stores and 176 Harmony Marts as affiliates.

According to the FTC, the CS acquisition catapulted the market share of Good Morning Mart in the area to 94.9 percent, which prevents new player’s entry and allows it to abuse its market dominance.