Ministry of SMEs Requests Fair Trade Commission to File Complaints Against 'Naver, Korea Shipbuilding & Offshore Engineering, Dain Construction'

At the 17th Mandatory Prosecution Request Deliberation Committee, Decision Made on 'Violation of the Fair Trade Act and Subcontracting Act'

Minister Kwon Chil-seung of the Ministry of SMEs and Startups.
[Photo by Yonhap News]

[Asia Economy Reporter Kim Jong-hwa] On the 16th, the Ministry of SMEs and Startups held the '17th Mandatory Prosecution Request Deliberation Committee' and decided to request the Fair Trade Commission to prosecute three companies?Naver, Korea Shipbuilding & Offshore Engineering, and Dain Construction?and four cases for violating the Fair Trade Act and the Subcontracting Act.

These companies caused damage to small and medium-sized enterprises (SMEs) through illegal acts such as abuse of market-dominant position and misuse of technical data. When the Fair Trade Commission prosecutes for violations of the Subcontracting Act, it imposes 3 penalty points on the violating companies (5.1 points if prosecuted under Article 12-3, Paragraph 3, Subparagraph 1 of the Act), and if the accumulated penalty points exceed 5 within the last three years, participation in public procurement bidding is restricted.

Naver, from May 2015 to September 2017, signed contracts with real estate information companies and prohibited them from providing real estate listing information supplied to Naver to third parties, resulting in a corrective order and a fine of 1.032 billion KRW from the Fair Trade Commission.

The Ministry of SMEs and Startups judged that Naver abused its market-dominant position to exclude competitors and caused damage by imposing conditions that prevented small real estate information companies from transacting with those competitors.

Korea Shipbuilding & Offshore Engineering, from June 2015 to May 2018, requested technical data from 80 subcontractors without providing the legally required written documents stating the purpose of the request. Additionally, it misused technical data from existing subcontractors and received a corrective order and a fine of 246 million KRW from the Fair Trade Commission.

The Ministry of SMEs and Startups regarded the misuse of technical data as a serious violation of the Subcontracting Act that must be strictly eradicated. Considering that Korea Shipbuilding & Offshore Engineering intended to dualize suppliers for the relevant products, the ministry decided to request prosecution.

Dain Construction caused damage by failing to pay subcontracting fees and delay interest to SMEs and by forcing subcontractors to purchase or succeed the rights to commercial properties sold by its affiliated company. The Fair Trade Commission issued corrective orders, payment orders for subcontracting fees, and fines (approximately 1.3 billion KRW and 1.6 billion KRW, respectively).

The Ministry of SMEs and Startups noted that Dain Construction’s repeated failure to pay subcontracting fees warranted prosecution requests for the two cases to prevent recurrence of similar incidents.

Jung Ki-hwan, Director of the Win-Win Cooperation Policy Division at the Ministry of SMEs and Startups, stated, "This prosecution request is significant as the first case where the ministry requests prosecution based on the extent of damage to SMEs caused by abuse of market-dominant position under the Fair Trade Act and misuse of technical data under the Subcontracting Act."

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