South Korea: Homeplus fined for abusing power

Homeplus was fined 45 million won (US$38,290) for abusing its power in deals with smaller suppliers and ordered to take corrective action, the Fair Trade Commission (KFTC) said, Sunday.

According to the antitrust authority, Homeplus coerced its suppliers to move into stores with less retail space while reorganizing workplaces in Gumi, North Gyeongsang Province, from May to June in 2015. At that time, the retail giant did not provide proper compensation.

The KFTC also said it learned that Homeplus passed on the renovation cost worth 87 million won to smaller suppliers, which is an unfair trading practice.

The KFTC official explained that Homeplus’ actions are a violation of Act on Fair Transactions in Large Franchise and Retail Business Article 17(8), which prohibits the tenant from altering the store’s location, area, or facilities without justifiable reason during the term of the contract.

“The change in store location should proceed after reaching an agreement through sufficient discussion. The tenant should also present its objective standard on compensation,” an KFTC official said.