7 TV home shopping businesses fined W4 bil. for unfair practices

Korea Fair Trade Commission Chairwoman Joh Sung-wook / Korea Times file

By Kim Bo-eun

The Korea Fair Trade Commission (KFTC) said Sunday it had imposed 4.15 billion won ($3.46 million) in fines on seven TV home shopping businesses for unfair practices such as making vendors pay for promotional costs.

The seven are GS Shop, Lotte Homeshopping, NS Shopping, CJ OnStyle, Hyundai Home Shopping, Home & Shopping and Gongyoung Shopping.

"We have ordered the seven companies to correct their practices and pay a combined total of 4.15 billion won in fines for violating regulations on large retailers using their superior status in operations with vendors," the KTFC stated.

The watchdog said the businesses used their superior status to force unfair practices on vendors, such as making them pay for promotions or making employees of vendors work for them, from January 2015 to June of last year.

The seven companies made their vendors pay for giveaways provided for promotional purposes. The firms also made employees of vendors work as guests, models, or audience members on their shows without contracts. Regulations state large retailers can only hire employees of vendors if they have set up a contract on working conditions in advance.

Hyundai Home Shopping made vendors pay for repackaging products that were damaged for resale purposes. Home & Shopping did not pay vendors logistics costs in this process.

GS Shop returned 62,399 products purchased from eight businesses to vendors from 2017 to 2019, without plausible grounds.

Lotte Homeshopping made their vendors offer products at the lowest possible cost, by ensuring they did not offer their product at a lower price to rival retailers.

GS was fined 1.02 billion won, Lotte 640 million won, NS 600 million won, CJ 590 million won, Hyundai 580 million won, Home & Shopping 490 million won and Gongyoung 200 million won for their practices.

Home shopping platforms collect the highest fees from vendors among retailers, at around 29 percent. This compares with department stores that collect 20 percent and discount chains that take 19 percent.

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