Fair Trade Commission imposes 8 million KRW fine on architectural cooperative for forcing selection of supervisor

Supervisors Sometimes Demand 15-25% Supervision Fees from Selected Companies

The Anyang-Gunpo-Uiwang-Gwacheon Architects Cooperative was ordered by the Fair Trade Commission to correct its actions and fined 8 million won for interfering in the selection of supervisors and forcing only member companies to take on supervision.

According to the Fair Trade Commission on the 4th, the Anyang-Gunpo-Uiwang-Gwacheon Cooperative established a method for selecting construction supervisors in 2017 and ensured that member companies were selected as supervisors. Supervision is a procedure to verify whether buildings and facilities are constructed according to the design. When the building owner requests the designer to designate a supervisor, the designer applies to the cooperative for a supervisor. The cooperative gave disadvantages to member companies that did not follow the self-established selection method by excluding them from future supervisor selections.

Additionally, the cooperative required member companies selected as supervisors to pay the designer a cooperation fee amounting to 15-25% of the supervision fee. The cooperation fee has no basis in related laws and regulations and is supposed to be decided through consultation between the designer and the supervisor, but the cooperative intervened and determined the payment ratio.

The Fair Trade Commission judged that such actions restricted competition among supervisors and excessively constrained the business activities of member companies. Accordingly, under the provisions prohibiting business association misconduct in the Monopoly Regulation and Fair Trade Act, the Commission issued orders to the cooperative to cease the conduct, prohibit future occurrences, and delete related regulations. A fine of 8 million won was also imposed.

The Fair Trade Commission explained, “This measure clearly establishes that architectural business associations must not interfere in the supervisor selection process and force member companies,” adding, “It is also expected to prevent the cooperative’s intervention from being passed on as an increase in supervision fees.”

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