Distribution Giant to Crack Down on Abuse of Power in Supplier Management Interference

Passage of Two Amendments Including Large-Scale Retail Business Act
Establishment of Detailed Types of Prohibition on Interference in Business Activities
Increase in Upper Limit of Penalty Reduction for Legal Violations

The partial amendments to the Large-scale Distribution Business Act and others, aimed at preventing the 'management interference' abuse by distribution giants against suppliers, have passed the Cabinet meeting.

On the 30th, the Fair Trade Commission announced that the amendment to the Enforcement Decree of the "Act on Fair Transactions in Large-scale Distribution Business (Large-scale Distribution Business Act)" and the amendment to the Enforcement Decree of the "Act on Fair Transactions in Agency Transactions (Agency Act)" passed the Cabinet meeting on the same day.

The amendments specify detailed types of management interference acts regulated under the Large-scale Distribution Business Act. The newly established detailed types of management interference include acts such as interfering with the appointment of employees by suppliers, unfairly restricting suppliers' sales items, facility size, business hours, and interfering with promotional events between suppliers and other distributors.

The Fair Trade Commission expressed, "By strengthening protection for suppliers exposed to management interference, their independent and free decision-making will be further guaranteed."

Kang Ki-jung, Chairman of the Fair Trade Commission, is responding to a lawmaker's question at the Political Affairs Committee's audit held at the National Assembly in October last year. Photo by Hyunmin Kim kimhyun81@

Additionally, the maximum reduction limit of fines based on the violation period and frequency of offenders under the Enforcement Decree of the Large-scale Distribution Business Act will be expanded from the current 50% to 70%.

According to the current fine notification, reasons for reduction such as up to 50% for voluntary correction and up to 20% for cooperation during investigation are stipulated, but the Enforcement Decree of the Large-scale Distribution Business Act had set the maximum reduction limit at 50% during the fine calculation stage.

The Fair Trade Commission explained that raising the maximum reduction limit stipulated in the Enforcement Decree of the Large-scale Distribution Business Act to 70% is expected to enhance the effectiveness of the voluntary correction system and support the prompt relief of damages for small business owners.

The Enforcement Decrees of the Large-scale Distribution Business Act and the Agency Act also established a dispute mediation notification procedure to the hydrogen court.

The amendments passed at the Cabinet meeting on this day are scheduled to take effect from the 9th of next month. The Fair Trade Commission evaluated, "By explicitly regulating the unfair intervention of large-scale distributors in transactions between suppliers and third-party distributors, we have taken a step closer to establishing a fair trade order in the distribution market."

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