Unfair Competition in Food and Distribution: A Growing Concern
Violations Jump by 100% in Three Years
In disturbing news, the number of violations of the Fair Trade Act among domestic food and distribution companies has skyrocketed by 100% in the last three years. Since 2020, a total of 12 companies have been found guilty of unreasonably restricting market competition and driving up consumer prices.
Here’s a breakdown of the violations by year:
- 2020: 2 cases
- 2021: 1 case
- 2022: 0 cases
- 2023: 4 cases
- 2024: 4 cases
- 2025 (Jan-Jun): 1 case
The most common violation was price maintenance, where resellers were forced to sell products at a specific price, curbing competition and potentially preventing consumers from buying at lower prices.
Price Fixing: A Sneaky and Harmful Practice
Three tennis goods importers were caught maintaining prices on items like rackets, balls, bags, and shoes from 2021 to February this year. These companies chose retail prices, effectively limiting competition.
“If market competition is not promoted, the dominant operator will actually decide the price, and consumers have no choice but to accept it.”
– Lee Young-ae, Professor of Consumer Science, Incheon University
Uncertain Sanctions Fuel Unfair Practices
Industry experts are calling for clearer penalties. The Fair Trade Commission’s sanctions have been contested in court in the past. For example, Coupang won a lawsuit reducing its W3.3bn penalty to nothing in February last year.
One industry official commented, “Large corporations can afford it, but small and medium-sized enterprises may make wrong administrative orders for survival.”
The FTC assures consumers that it will strictly monitor and rectify harmful practices to ensure fair competition and affordable prices.
“Representative Kim Hyun-jung conveyed, “As the influence of online platforms grows, unfair practices such as price maintenance are becoming more complex and tricky than in the past.”
Did you know?
- A balanced market allows businesses to compete and set prices based on demand, leading to better choices and potentially lower prices for consumers.
- The Fair Trade Act prohibits acts that restrain fair competition and restricts the autonomy of business operators.
- The FTC plays a crucial role in protecting consumers’ rights and promoting fair competition in the market.