In a possible reaction to Korea’s rising inflation, the Korea Fair Trade Commission (KFTC) fined the four major Korean refiners a total of KRW 434.8 billion (USD 442 million) for preventing competition through collusion.
The KFTC noted that: “In their meeting in March of 2000, officials of the four refiners agreed to respect the rights of former exclusive oil suppliers to gas stations and refrained from supplying their products to even gas stations with ties with a particular brand in the past.”
The KFTC claims that this alleged collusive act, led to consumers being forced to pay increased margins to suppliers even when prices of a barrel of the unrefined product decreases in the international markets.
Korea government is attempting to do anything to reign in on inflation seemingly in every manner with the exception of raising interest rates and the suppliers of fuel, food products, autos and other top consumables are, thus, the target of the present administration.
The tactic will likely force Korean conglomerates to lower margins temporarily.
The answer to the problem, however, is not simply for the Korean government to engage in these types of aggressive measures, but to lessen the burden on SME Korean businesses and foreign business and decrease the benefits to the big Korean players that are increasingly involved in more and more business lines and more abuse tactics to suppliers.
The refiners, from recent Korean news reports, seem to be set to appeal the decision. In Korean Antitrust cases, the Seoul High Court is often less aggressive than the KFTC.