Regulator rejects Samsung’s proposed remedy for unfair commercial activity


A flag with the Samsung logo in front of the Samsung building in South Seoul (Yonhap)

The South Korean competition regulator said Thursday it had not approved a proposal by the main subsidiaries of the Samsung group to tackle their alleged unfair business practices regarding in-house cafeteria operations.

Since 2018, the Korean Fair Trade Commission (KFTC) has been investigating Samsung Electronics Co., Samsung Display and two other Samsung units over allegations that they unfairly supported Samsung Welstory Inc., the group’s catering subsidiary, by allowing him to operate their in-house cafeteria business for them.

In May, Samsung proposed measures to correct its business practices and other supportive measures, including lowering an entry barrier to its cafeteria business for unaffiliated businesses.

But the KFTC said it had decided not to approve the remedies proposed by Samsung, saying they did not meet certain criteria for approval. The regulator will review the level of punitive actions against Samsung.

South Korean law allows a company accused of anti-competitive practices to set out a remedial plan without considering whether the practices violate the country’s competition law. This decision aims to quickly resolve such cases and repair the damage caused to consumers without resorting to legal means.

Internal commerce is blamed here for allowing families who own conglomerates to easily achieve large profits by having subsidiaries award themselves lucrative contracts, which undermines the principle of fair competition.

Founded in 2013, Samsung Welstory is a wholly owned subsidiary of Samsung C&T Corp., the group’s de facto holding company. (Yonhap)

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