Hyundai Heavy Industries Pressured Price Reduction by Passing Technical Data to Third Parties... Fair Trade Commission Imposes 246 Million Won Fine

[Asia Economy Reporter Joo Sang-don] Hyundai Heavy Industries was caught by the Fair Trade Commission for pressuring subcontractors to lower delivery prices by providing their technical data to third-party companies.

On the 1st, the Fair Trade Commission announced that it decided to impose corrective orders and a fine of 246 million KRW on Hyundai Heavy Industries for misappropriating subcontractors' technical data.

According to the Fair Trade Commission, from June 2016 to May 2018, during the bidding process for five types of ship engine parts, Hyundai Heavy Industries provided the drawings of existing subcontractors to third-party companies and requested them to submit bids with the intention of purchasing products at lower prices. As a result of the bidding, the third-party companies that received the subcontractors' drawings won some of the product contracts and supplied them. The Fair Trade Commission judged that Hyundai Heavy Industries used the subcontractors' technical data during the bidding process to explore the possibility of supply and obtain delivery quotes, which ultimately exposed the existing companies to pressure for price reductions.

Additionally, Hyundai Heavy Industries misappropriated the manufacturing drawings of Company A, which had been supplying ship lighting fixtures for over 30 years, from April 2017 to April 2018 to comply with the specific subcontractor designation request from its client, shipowner Company P.

Specifically, Hyundai Heavy Industries provided Company A’s manufacturing drawings, the only domestic supplier of ship lighting fixtures, to Company B, enabling Company B to manufacture ship lighting fixtures.

In response, Hyundai Heavy Industries claimed that this was an unavoidable mistake that occurred during the process of designating Company B as a subcontractor at the shipowner’s request. However, even if there was a request from the shipowner, the act of misappropriating subcontractors' technical data for this purpose remains illegal. It was also confirmed that the price reduction rate increased due to Company B being able to supply ship lighting fixtures.

Furthermore, from June 2015 to January 2018, Hyundai Heavy Industries requested a total of 293 technical data items from 80 subcontractors without issuing the legally required written documents.

A Fair Trade Commission official stated, "This case is significant in that the Fair Trade Commission imposed sanctions on the widespread practical behavior of technical misappropriation in the industry through ex officio investigation and corrected the practical customs. We plan to strengthen monitoring of technical misappropriation in advanced technology fields by the first half of next year."

This content was produced with the assistance of AI translation services.