The Fair Trade Commission said on Tuesday it slapped fines of 5 million won ($4,500) on Shinsegae and issued a corrective action order for faking handbag discounts on its online shopping mall, a violation of the electronic commerce law.

The antitrust watchdog warned that it will report the matter to the prosecution if Shinsegae repeats the violation.

According to the FTC, Shinsegae stated on its online mall for nearly a year through last November that a Prada bag was marked down by 24 percent from the original price of 3.78 million won when it had never sold the bag at that price.

Consumers found out Shinsegae was lying as the same bag was sold at 2.37 million won in Prada stores prior to February last year, 2.61 million won between February and August 2012, and 2.74 million after August last year.

Shinsegae ended up selling only two of the bags.

The FTC said it decided to impose the fine and issue a corrective action order despite the negligible sales volume because the retailer left the false statement unchanged for almost a year.

The watchdog added that if a product price on an online mall was significantly cheaper than the store price, it could have been made in China, instead of Europe as the mall stated.

The FTC said it planned to keep an eye on Internet shopping mall operators for falsely stating product prices, discount rates and countries of origin.

By Kim So-hyun (sophie@heraldcorp.com)