Revised Distribution Industry Act Passed in Plenary Session...Crackdown on Large Retailers' Abuse Demanding "Raise Prices on Other Channels"

Passage of Six Fair Trade Commission-Related Bills in the National Assembly Plenary Session on the 18th

From now on, large-scale retailers like Coupang may be punished under the Distribution Industry Act for 'management interference acts' if they demand suppliers to raise prices on other channels.

On the 18th, the Fair Trade Commission announced that six legislative amendments, including the amendment to the Large-Scale Retail Business Act (Act on Fair Transactions in Large-Scale Retail Business), passed the National Assembly plenary session. The amended Large-Scale Retail Business Act newly established a prohibition on 'interference in management activities,' which bans large-scale retailers from unfairly interfering with the independent management activities of suppliers by using their trading position, or causing affiliated companies or other businesses to do so. [Related article: [Exclusive] 'Raise prices on other online malls'... Fair Trade Commission halts new type of unfair practices by large retailers]

Previously, there was no provision in the Large-Scale Retail Business Act prohibiting such management interference by large-scale retailers, so the prohibition against abuse of superior bargaining position under the Fair Trade Act was applied to these violations. Regulating such new types of unfair practices through the Fair Trade Act involves somewhat complicated processes, such as proving the existence of a superior bargaining position, which takes considerable time. The Large-Scale Retail Business Act predefines the regulated large-scale retailers (those with sales of 100 billion KRW or more in the previous fiscal year, or stores using retail space of 3,000㎡ or more), and only requires determining whether the prohibited acts under the law were committed, which can increase the speed of regulation.

Additionally, amendments to the Fair Transactions in Franchise Business Act (Franchise Business Act), the Monopoly Regulation and Fair Trade Act (Fair Trade Act), the Fair Transactions in Subcontracting Act (Subcontracting Act), the Fair Transactions in Agency Act (Agency Act), and the Act on the Regulation of Terms and Conditions (Terms and Conditions Act) also passed the plenary session on the same day.

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