Gov't mulls introducing punitive damages to tech extortion

The South Korean government is considering a string of measures, including a punitive damages system, to resolve the technology extortion issue as part of its efforts to root out the unfair business practice by large corporations, officials said Friday.

There have been persistent reports of big companies stealing technology from their subcontractors that have little means to fend off unfair business practices for fear of losing supply contracts.

"Relevant parties, including the Ministry of Small and Medium-sized Enterprises and Startups, the Fair Trade Commission and the Korean Intellectual Property Office, are working together to come up with pan-government measures," a government official said.

The country`s new SMEs Minister Hong Jong-haak, who took office last month, has been pointing to the tech extortion issue as a major hurdle holding up growth of SMEs and startup businesses in the country. (Yonhap)

The government was originally planning to unveil the conclusion this year, but the announcement could be postponed to early next year, according to the official.

SMEs have been calling for the introduction of punitive damages to deter large firms from abusing their power.

"We are trying to reflect what the industry has been asking for in one way or another," the official said.

In the measures, an expansion of the technology deposit system is also expected to be included.

The system is where small firms deposit their technology information in a credible institute, so that they can prove their right to certain technologies if extortion by large firms take place.

The country's new SMEs Minister Hong Jong-haak, who took office last month, has been pointing to the tech extortion issue as a major hurdle holding up growth of SMEs and startup businesses in the country. (Yonhap)