Poresia's Abuse of Technical Data Against Subcontractors... Fair Trade Commission Imposes Fine
On the 23rd, the Fair Trade Commission imposes a 56 million KRW fine on 'Poresia Korea,' one of the world's top 7 auto parts companies
Foresia Korea was fined for requesting technical data containing know-how from subcontractors without providing written documents. Foresia Korea is the Korean subsidiary of Foresia, a French company ranked among the world's top seven automotive parts manufacturers.
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On the 23rd, the Fair Trade Commission announced that it imposed a fine of 56 million KRW and corrective orders (future prohibition orders) on Foresia Korea for violating the "Act on the Fair Transactions in Subcontracting" (Subcontracting Act). From April 2018 to December 2020, Foresia Korea engaged in subcontracting transactions by outsourcing the production of parts used in Hyundai-Kia Motors' exhaust systems to small and medium subcontractors and receiving deliveries.
In this process, Foresia Korea received a total of 101 documents containing technical know-how from four subcontractors, including 14 manufacturing process diagrams and 87 management plans. However, it did not provide written documents specifying the purpose of the request, ownership rights, compensation, and payment methods.
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The obligation to provide a technical data request document is a safeguard under the Subcontracting Act designed to prevent the primary contractor from excessively demanding technical data from the subcontractor beyond what is necessary to achieve the purpose of the subcontracting transaction. The Fair Trade Commission explained, "Even if the materials were created in the process of ensuring the quality of parts, they are considered technical data under the Subcontracting Act," and clarified that "when the primary contractor requests such technical data from the subcontractor, it must issue a written technical data request document as stipulated by the Subcontracting Act."
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