Fair Trade Commission Sanctions SSG.com and Kurly for Shifting Promotion Costs

Violation of Written Agreement Obligation for Promotional Events
Unfair Collection of Server Fees, etc.
Correction Order and 59 Million KRW Fine Imposed

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SSG.com and Kurly, which shifted promotional costs to suppliers, have been sanctioned by the Fair Trade Commission.

On the 20th, the Fair Trade Commission announced that it imposed corrective orders and fines totaling 59 million KRW on SSG.com and Kurly for violating the Large-scale Distribution Business Act.

These companies conducted promotional events without prior written agreements with suppliers regarding the event names, durations, and incurred costs. SSG.com made 61 suppliers bear the costs of product discount coupons, while Kurly made 3 suppliers bear price discount costs.

From May 2019 to March last year, SSG.com unjustly collected a total of 65.26 million KRW from 14 suppliers under the name of product information maintenance fees.

The Fair Trade Commission viewed these actions as improperly collecting costs that should have been borne by large-scale distributors from suppliers, judging them as demands and receipts of economic benefits in violation of Article 15, Paragraph 1 of the Large-scale Distribution Business Act.

Kurly pursued a policy to expand sales incentives for suppliers and entered into growth incentive agreements with 1,850 suppliers after only formal consultation procedures.

Kurly had previously received growth incentives from only some suppliers, but just one month before the contract start date in 2022, it unilaterally notified all suppliers of the ‘2022 Growth Incentive Expansion Policy’ and concluded the related incentive agreements.

The Fair Trade Commission determined that Kurly’s actions excessively restricted suppliers’ autonomous choice beyond a reasonable scope, constituting a demand for economic benefits in violation of Article 15, Paragraph 2 of the law.

The Fair Trade Commission stated, "This measure has raised awareness among large-scale distributors operating online shopping malls by detecting and sanctioning major unfair practices occurring in the rapidly growing online shopping market," and added, "It is significant in emphasizing that when conducting frequent promotional events such as price discounts or issuing discount coupons in the online shopping market, certain procedures prescribed by law must be followed to avoid disadvantaging suppliers."

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