FTC to inspect unfair terms of international contracts
Fair Trade Commission Vice Chairman Ji Chul-ho speaks during a meeting with business leaders of European companies hosted by the European Chamber of Commerce in Korea at Lotte Hotel Seoul, Friday. Courtesy of ECCK
By Kwak Yeon-soo
The government will look into unfair terms and conditions of international contracts as part of its efforts to root out practices that harm innovative competition here, Fair Trade Commission (FTC) Vice Chairman Ji Chul-ho said Friday.
The move comes as there have been growing complaints about contracts signed between Korean firms and foreign companies operating here.
At the meeting with European business leaders hosted by the European Chamber of Commerce in Korea (ECCK) at the Lotte Hotel Seoul, Ji unveiled his plan during a speech titled “The FTC's Policy Direction,” highlighting Korea's policies and regulations on large business groups.
“As part of our plan to monitor the abuse of market dominance, we could search multinational firms and request them to disclose international contracts,” Ji said. “We've been receiving many complaints and we've found several unfair terms written into them.”
According to Ji, the FTC will closely monitor emerging sectors, including the mobile ITC, online platforms and pharmaceutical sectors.
He also asked the business leaders to coordinate harmoniously with government procedures and promote innovative mergers and acquisitions.
The FTC plays a key role in correcting unfair practices and supporting legitimate investment activities as well as promoting fair competition and supporting consumer rights.
Regarding Ji's comments, an FTC official explained that they should not be taken as a signal that the corporate watchdog will seek to revive old regulations regarding international contracts.
The regulations were first introduced in 1990 with the aim of protecting local firms competing with foreign companies. However, the FTC abolished them in 2009.
“Ji mentioned international contracts to set an example of promoting innovative competition. In fact, there are still ways to regulate unfair practices even without bringing the regulations back,” an FTC official said.
The official explained that FTC investigations were based on how “unfair and deceptive” reported practices were, not based on the origin, size or business sector a company was involved in.
“We launch probes into multinationals after receiving complaints or at our discretion,” the official said. “We will continue to strictly respond to collusion and unfair trade practices in sectors closely related to people's lives.”
Meanwhile, ECCK Chairman and President and CEO of Mercedes-Benz Korea Dimitris Psillakis said the European business community will work together with the FTC to strengthen the fair business environment in Korea.
“The European business community is fully behind and supportive of any initiative to further strengthen the compliance landscape and fair business in Korea,” Psillakis said.
“I hope we will benefit from this opportunity and be able to work together through trust and active communication in the future.”