"Fair Trade Commission Issues Corrective Order to 'Zenenbio' for Contract Termination Notice After Mask Prices Drop"

Exterior of Zenen Bio Xenotransplantation Comprehensive Research Complex Zenen Core Center

[Asia Economy Reporter Eunju Lee] ZenenBio, which unilaterally terminated manufacturing contracts with subcontractors after mask prices dropped, has been issued a corrective order.

The Fair Trade Commission announced on the 22nd that it found ZenenBio in violation of the "Act on the Fairness of Subcontract Transactions" (Subcontract Act) and issued a corrective order to prevent recurrence. ZenenBio is a small and medium-sized enterprise engaged in pharmaceutical manufacturing and wholesale, and has been producing and selling masks through OEM (Original Equipment Manufacturer) methods since the spread of COVID-19.

According to the Fair Trade Commission, ZenenBio notified subcontractors of contract termination unilaterally after receiving some mask packaging materials commissioned for manufacturing. This was due to the decline in mask prices, which had soared during the COVID-19 pandemic, leading to the unilateral cancellation of manufacturing commissions. They also issued contracts to subcontractors that omitted conditions for payment adjustments related to delivery timing, location, and cost fluctuations. Even after receiving the mask packaging materials, they did not immediately pay as stipulated in the contract.

The Fair Trade Commission determined that ZenenBio's incomplete issuance of written documents, unjust refusal to accept goods and cancellation of commissions, and non-payment of subcontracting fees violated Articles 3, 8, and 13 of the Subcontract Act, and ordered measures to prevent recurrence. However, no fines were imposed. The Commission stated, "Although ZenenBio's actions were seriously illegal, considering that ZenenBio reached an agreement with the subcontractors to pay the unpaid subcontracting fees and damages, and fully acknowledged the violations during the review, no fines will be imposed."

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