Kwak Yeon-soo is a digital editor at The Korea Times creating, editing and curating digital content for the newspaper’s website, mobile app and social media. She previously covered a diverse array of cultural, political and business topics.
Hankook Tire fined for preventing retailers from cutting prices
By Kwak Yeon-soo
Hankook Tire & Technology CEO Cho Hyun-bum / Korea Times file
By Kwak Yeon-soo
Hankook Tire & Technology was fined 117 million won ($99,472) for forcing its dealers to sell tires at above certain prices, the Fair Trade Commission (FTC) said, Sunday.
According to the antitrust authority, Hankook Tire allowed offline dealers to offer discounts of only up to 40 percent of factory prices from January 2017 to November 2018.
The company monitors all tire purchases and entered a permissible range for discounts in its smart transactions system that prevents dealers from offering tires at lower prices.
The FTC said the tiremaker threatened to reduce or stop supplying tires to dealers not complying with its demand, which is an unfair trading practice and illegal resale price maintenance.
“Hankook Tire's practice limits price competition for dealers in the tire market, and therefore undermined consumers' opportunity to purchase tires at reasonable prices,” an FTC official said.
Hankook Tire's share in the domestic market accounts for more than 30 percent as of 2018, which is No. 1 followed by Kumho Tire and Nexen Tire.
In April, the FTC fined Kumho Tire 4.8 billion won, while slapping 1.1 billion won in fines on Nexen Tire for cutting tire supplies to its dealers that were also selling tires below the lowest possible prices set by tiremakers.