FTC expands price-fixing probe in education market

Korea Herald Feb. 22, 2007

The Fair Trade Commission is expanding an investigation into the education sector amidst speculation over possible cartels and abuses of market dominance to raise prices of textbooks, school uniforms and tuition fees.
In addition to its examination of high-priced textbooks sold by the state-funded Educational Broadcasting System last year, the antitrust watchdog is probing a suspected cartel of school uniform suppliers. The FTC is currently discussing whether the alleged textbook overpricing is a case of misusing market dominance.

“We cannot say whether EBS violated the Fair Trade Law yet because some of its textbooks are cheaper than those of other publishers,” said a high-ranking official of the FTC.

The antitrust panel recently said that it is closely looking into whether the tuition increase at universities involves cartels. There have been suspicions that authorities of different universities met to discuss the tuition issue.

“Universities can be subject to probes against cartels even if they are nonprofit organizations,” FTC head Kwon Oh-seung said recently.

Mounting complaints from consumers against private institutes’ tuition and textbook prices are stoking concerns that the FTC could strike the private education sector as well.

The FTC launched a joint inspection with local government offices against school uniform makers and sales agents as parents’ associations accused them of price manipulation.

“Disturbance of open bidding led by the parents’ association or excessive giveaway promotions will be punished,” FTC secretary general Lee Dong-kyu said earlier this week. The FTC is also looking into whether the companies sold off inventories as if they were new products.

(sophie@heraldm.com)

By Kim So-hyun

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SeanHayes@ipglegal.com