Abuse of Subcontractors... Fair Trade Commission Sanctions TJ Inno

Fair Trade Commission Issues Corrective Order to TJ Innovation

Logo of the telecommunications equipment company TJ Innovation.
Photo by TJ Innovation website capture

[Asia Economy Sejong=Reporter Lee Jun-hyung] Telecommunications equipment manufacturer TJ Innovation has been sanctioned by competition authorities for unfair subcontracting practices.

The Fair Trade Commission announced on the 21st that it has decided to issue a corrective order against TJ Innovation for refusing to accept goods after outsourcing antenna manufacturing to a subcontractor.

According to the FTC investigation, in April 2020, TJ Innovation entrusted a subcontractor with the manufacture of small antennas but unilaterally canceled part of the order, citing delays in parts supply from another client. The canceled amount was approximately 16 million KRW, accounting for half of the total order volume. This violated the Subcontracting Act, which prohibits the principal company from arbitrarily canceling or changing the entrusted content when there is no reason to hold the subcontractor responsible after outsourcing manufacturing.

TJ Innovation also unilaterally refused to accept the goods it had commissioned for manufacturing. From March to April 2020, after entrusting the subcontractor with the manufacture of small antennas worth 20 million KRW, the company established and notified antenna inspection standards three days before the delivery date. TJ Innovation effectively refused to accept products that did not pass inspection according to its standards.

TJ Innovation had never previously established or consulted with the subcontractor on the inspection methods and standards for the antennas. Moreover, until this incident, the company accepted antennas commissioned for manufacturing without separate inspections. From 2018 to 2020, TJ Innovation did not issue any written documents containing all legally required information when outsourcing antenna manufacturing to the subcontractor.

An FTC official stated, "We will strictly enforce the law against unfair subcontracting practices," and added, "We will continue to make efforts to prevent subcontractors from suffering unjust disadvantages."

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