Korea Fair Trade Commission building at the Government Complex Sejong in Sejong City. Oct. 13, 2023. (Photo by Yoo Dae-gil)
South Korea’s Fair Trade Commission said Tuesday it issued corrective orders and fined SM Hwajin and Korea Cubic a combined 2.6 billion won ($1.9 million) for colluding in bids for surface treatment of vehicle interior materials.
The two companies are suppliers to Hyundai and Kia and together hold a 100% share of the automakers’ bidding market for hydrographic transfer, a surface-treatment method used on interior materials, the commission said.
The commission said the firms took part in Hyundai and Kia bids held from September 2020 to April 2023 to select contractors for interior surface-treatment work for five new models, including the Sportage, EV9, Santa Fe and EV3.
According to the commission, the companies agreed in advance on the expected winners and bid prices. SM Hwajin was to win the interior surface-treatment volume for four models, including the Sportage and EV9, while Korea Cubic was to win the volume for the Palisade.
The commission said the conduct violated Article 40(1) of the Monopoly Regulation and Fair Trade Act. It imposed fines totaling 2.591 billion won — 1.632 billion won on SM Hwajin and 959 million won on Korea Cubic — along with corrective orders.
The commission said it will strengthen monitoring of collusion in intermediate goods and parts, citing the sector’s broad spillover effects across upstream and downstream industries, and will respond strictly when violations are confirmed.
The two companies are suppliers to Hyundai and Kia and together hold a 100% share of the automakers’ bidding market for hydrographic transfer, a surface-treatment method used on interior materials, the commission said.
The commission said the firms took part in Hyundai and Kia bids held from September 2020 to April 2023 to select contractors for interior surface-treatment work for five new models, including the Sportage, EV9, Santa Fe and EV3.
According to the commission, the companies agreed in advance on the expected winners and bid prices. SM Hwajin was to win the interior surface-treatment volume for four models, including the Sportage and EV9, while Korea Cubic was to win the volume for the Palisade.
The commission said the conduct violated Article 40(1) of the Monopoly Regulation and Fair Trade Act. It imposed fines totaling 2.591 billion won — 1.632 billion won on SM Hwajin and 959 million won on Korea Cubic — along with corrective orders.
The commission said it will strengthen monitoring of collusion in intermediate goods and parts, citing the sector’s broad spillover effects across upstream and downstream industries, and will respond strictly when violations are confirmed.
* This article has been translated by AI.
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