40 large firms and suppliers face investigation over price collusion, unfair trade, abuse of market power
The Fair Trade Commission is conducting an extensive investigation into about 40 large firms and its suppliers to root out business malpractices including price collusion and abuse of market power, officials said Monday.
The antitrust regulator launched the largest-ever probe into their pricing policies on Jan. 10 as part of the government’s attempt to control inflation. The inquiry also targets their involvement in a range of irregularities including unfair competition and distortion of distribution processes.
“When starting the probe into inflation-causing activities earlier, we also ordered an investigation into the overall business practices involving unfair competition, abuse of market power and distortion of distribution process,” a high-ranking FTC official said.
The regulator explained that the probe, the first of its kind, aims to uproot fundamental problems in the supply chain responsible for discrepancies in pricing and power abuses in the distribution chain.
A comprehensive price monitoring taskforce launched on Jan. 10 will carry out the investigation across oil, flour, coffee and other industries producing staple food in what the government calls “a war against inflation,” sources said.
“Our investigation used to be task-specific but our newly created teams make their probe industry specific, which will give us insights into wider areas of business functions,” a FTC official said.
The stronger show of resolve comes on the heels of its recent reorganization, aimed at reshuffling manpower and resources to strengthen market monitoring, cartel investigation and consumer protection.
It also reflects the instruction of the watchdog’s newly appointed chairman Kim Dong-soo, who prioritized price stability through reshuffling of the distribution structure in his inaugural address earlier this month.
The FTC will complete its preliminary investigation before the Lunar New Year holiday that falls on Feb. 2-4. The agency will intensify the probe based on the problems exposed in the preliminary investigation.
On Jan. 13 a pan-government taskforce headed by the Finance Ministry announced a package of measures to tame inflation that has been threatening the economic recovery.
Measures included extended tariff cuts on over 70 items and increasing the release of the reserved crops from the national granary during the March-April period when supply tends to be short.
It also includes increasing the supply of new apartments earlier than planned to lubricate a housing market in serious shortage of rental properties.
The Bank of Korea on Jan. 13 unexpectedly raised its benchmark interest rate by 25 basis points to 2.75 percent, showing inflationary pressure as a major policy challenge.