Prosecution Indicts Korea Shipbuilding & Offshore Engineering for 'Subcontractor Technical Data Leak' Allegations

by Kim Daehyun

Published 18 Apr.2022 16:47(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Daehyun] Korea Shipbuilding & Offshore Engineering has been brought to trial on charges of abusing its dominant position by leaking technical data of subcontracted ship parts suppliers to competing companies.

On the afternoon of the 18th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Ko Jinwon) announced that Korea Shipbuilding & Offshore Engineering was indicted for violating the Subcontracting Act.

Previously, from April 2017 to June of the following year, Korea Shipbuilding & Offshore Engineering allegedly demanded 125 approved ship-related production drawings from 55 subcontractors and, on four occasions, unfairly provided 12 approved drawings for ship lighting equipment production to competing companies.

It was investigated that the competing companies improperly received and used four related production drawings during the bidding process.

The current Subcontracting Act stipulates that 'the principal contractor shall not unfairly use or provide to a third party the technical data acquired from subcontractors for themselves or others.'

The Ministry of SMEs and Startups requested the Fair Trade Commission to file a complaint last November, and following the FTC's complaint, the prosecution conducted investigations of related parties and decided on this indictment.

A representative of the Seoul Central District Prosecutors' Office stated, "A large corporation violated various legal obligations toward subcontractors over a long period by exploiting its superior position in subcontracting transactions," and added, "The habitual misuse of subcontractors' technical data can cause significant economic damage to small and medium-sized enterprises, so strict measures were necessary."