By Lee Hyo-sik
The Fair Trade Commission (FTC) will probe seven large companies seeking to win a license for duty free shops in Seoul, in order to check whether they wield excessive market power or not, it said Sunday.
The anti-trust agency plans to inform the Korea Customs Service (KCS), which supervises the ongoing selection process for three new duty free shop operators in the capital city, of the outcome of its probe.
KCS is expected to announce the three winners -- two from seven large companies and one from 14 small companies -- in July.
Those subject to the FTC investigation are Lotte Duty Free, HDC-Shilla Duty Free, Shinsegae Duty Free, Hyundai Duty Free, Hanwha Galleria, SK Networks and E-Land. Among them, Lotte and Shilla, which each account for 50.76 percent and 30.54 percent of the country’s duty free market, will likely face more stringent scrutiny.
FTC said it will study the seven firms to check whether they exert excessive market control or not, and examine how the domestic duty free market will change when KCS issues new licenses.
The current fair trade law bans a company from having a market share of more than 50 percent or the top three companies from having a combined 75 percent or higher.
Rep. Min Byung-doo of the main opposition New Politics Alliance for Democracy has said the KCS should not grant Lotte and Shilla more licenses, claiming that if they are to run more duty free shops, it would undermine market fairness.
However, Lotte and Shilla have argued that they do not control the nation’s duty free market, which has recently been hit hard by the plunging number of Chinese and other foreign shoppers amid the outbreak of Middle East Respiratory Syndrome. They said they need to operate more stores here to hone their competitiveness and more effectively compete with foreign rivals.