The head of South Korea’s antitrust watchdog said on Dec. 31 that the country’s large businesses groups should work hard to improve their complicated ownership structures and refrain from wielding their market dominance.
“Large conglomerates should make efforts to curb their economic power and to improve their ownership structures,” Fair Trade Commission Chairman Kim Sang-jo said in his message for 2018.
“They should also work hard to stem unfair business practices that hurt smaller firms,” Kim said.
Kim, a former civic activist, said he will keep monitoring large business groups that abuse their market dominance and exert undue pressure on subcontractors and small-time enterprises.South Korea‘s conglomerates have been under fire for years for largely relying on controversial cross-shareholding arrangements among their affiliated companies to strengthen their owner families’ control over the entire group.
The FTC chief also vowed to carry out sweeping reforms to root out unfair business practices and strengthen consumer protection.
“In order to help smaller firms seek innovative growth, a level-playing field is necessary,” Kim said, adding that harsh punitive measures will be taken against unfair contract terms.
Earlier, the FTC unveiled a plan to impose punitive damages of up to three times the actual losses incurred by illegal business practices, such as unfair payments and returns, as well as cutting back supplied goods, which frequently occur between large shopping mall operators and smaller partners.
The South Korean distribution industry is currently led by huge retailers, department stores and discount outlets that lease their spaces to small businesses. Big-name retail giants, such as Lotte, Shinsegae and Hyundai Department Store, take up the bulk of the market share and wield great influence over the entire industry.
