Ministry of SMEs and Startups Requests Prosecution of Hyundai Heavy Industries and Yogiyo Among Two Companies

[Asia Economy Reporter Moon Hyewon] On the 26th, the Ministry of SMEs and Startups requested the Fair Trade Commission (hereinafter referred to as the FTC) to file charges against Hyundai Heavy Industries and Delivery Hero Korea (DH Korea). The FTC is obligated to prosecute these companies to the prosecution office upon the request of the Minister of SMEs and Startups.

The Ministry of SMEs and Startups announced that it held the "14th Mandatory Prosecution Request Deliberation Committee" on the same day and decided to request prosecution against these companies for violating the Subcontracting Act and the Fair Trade Act.

According to the Ministry, Hyundai Heavy Industries requested Small and Medium Enterprise A, which supplied engine cylinder heads to overseas thermal power plants, to identify the cause of defects and agreed to pay the subcontracting fees based on the results, while also requesting the supply of replacement parts. Accordingly, A delivered 108 cylinder heads in January and February 2015.

However, contrary to the agreement, Hyundai Heavy Industries did not verify the responsibility for defects and failed to pay the subcontracting fees of 255.63 million KRW and delayed interest. As a result, in August of this year, the FTC issued an order to prevent recurrence and ordered the payment of the unpaid subcontracting fees of 255.63 million KRW and delayed interest.

The Ministry explained that Hyundai Heavy Industries’ failure to pay the subcontracting fees without attempting or making efforts to identify the cause of the defects, contrary to the agreement with A, is recognized as intentional violation of the law. Considering repeated unfair practices such as misuse of technical data and unjust reduction of subcontracting fees causing significant managerial damage to A, the Ministry decided to request prosecution.

DH Korea forced food delivery restaurants using its delivery application Yogiyo to prohibit selling at prices lower than those on its app when using other companies’ delivery apps or accepting phone orders through a minimum price guarantee system. If violated, penalties such as contract termination were imposed, resulting in the FTC issuing an order to prevent recurrence and imposing a fine of 468 million KRW.

The Ministry stated that 144 food delivery restaurants suffered considerable damage such as sales decline due to unwanted price reductions caused by these violations. Considering DH Korea’s deliberate involvement in systematically detecting companies that did not comply with the minimum price guarantee system, and that abusing its trading position is a chronic unfair practice requiring stricter sanctions, the Ministry decided to request prosecution.

Park Jongchan, Director of Win-Win Cooperation Policy at the Ministry of SMEs and Startups, said, “With the rapid growth of the online platform market recently, unfair practices within platforms are also increasing proportionally. The Ministry will strengthen monitoring activities across the entire online platform market.”

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