ed Multinational bashing

Gov’t needs more than threats, fines

A string of scandals has landed some big foreign multinational companies on the wrong side of public opinion, while the government is pressuring them on behalf of consumers.

As with domestic companies, these firms are required to play by the rules and, if they don’t, they should be penalized in proportion to the lives endangered and damaged inflicted. There shouldn’t be any question about this.

However, the process by which these firms’ wrongdoings are investigated and penalties determined should be fair and transparent to all parties involved ― both perpetrating firms and victimized consumers. To ensure a fair process is the government’s job but so far it has not done this well by any set of standards. Rather, it appears to be trying to cover up its incompetence by channeling the public’s anger to these foreign firms and make scapegoats out of them.

First, Oxy Reckitt Benckiser should be punished for its deadly humidifier disinfectant; however, the government had a chance to deal with it earlier and reduce the number of victims. The first known incident occurred in 2011 but it was only this year that the case of epidemic proportions has been brought to the fore, creating a belated big fuss over it.

It is because the government was incapable of debunking Oxy’s arranged manipulated lab tests or establishing the sterilizer as the cause of death. People were left naked to the dangers of untested chemicals.

Second, Volkswagen is under fire for cheating on diesel car mileage and emissions, and its failure to treat Korea and the United States equally with regards to compensation. The government says a paper trail has been found to confirm systematic cheating was done not just at its headquarters but also here in Korea. The company argues that there were errors in the documents. Still, the government can slap a sales ban as an administrative action. Still, it remains to be seen whether such an action, if taken, will withstand the scrutiny of the courts.

In both cases, the government paraded foreign CEOs and made them the lightning rod of public animosity.

Thirdly, Qualcomm faces a big fine for using its market dominance as the world’s biggest smartphone chipmaker to gain huge royalties from LG and Samsung. Qualcomm may pay the large fine but appears to be taking it as a kind of quasi tax. The Fair Trade Commission’s case against the company is quite shaky because device-level licensing is indeed the norm of the industry as Qualcomm claims.

These cases offer Korea a lot to think over. Above all, it is worthy checking whether the current way of handling them, as a Qualcomm official said, is as crude as in China ― this must not be the case in a market many times smaller than the neighboring country.

Korea has come so far thanks in a large part to its globalization efforts and will likely depend on this more so in the future. It is necessary to treat foreign firms fairly and keep them safe from political ups and downs so that more of them will keep investing.

To the outside world, the cases of Volkswagen, Oxy and Qualcomm could be another test of how good a place Korea is for doing business. The jury is out, but Korea Inc. can’t afford to lose these cases.