LF Networks, which operates the LF Square shopping mall, has been penalized by the Fair Trade Commission (KFTC) for improperly shifting promotion costs to suppliers and demanding sales data from competitors.
On August 11, the KFTC announced that it imposed a corrective order and a fine of 418 million won on LF Networks for transferring promotion costs without a valid written agreement and requesting sensitive business information from suppliers regarding sales at competing stores. LF Networks operates four locations, including in Incheon and Yangju.
According to the KFTC's investigation, LF Networks conducted 29 promotional events with suppliers from December 2022 to December 2024, issuing incomplete agreements that lacked specific product details and signatures. During this process, LF Networks shifted a total of 58.61 million won in promotion costs to 174 suppliers.
The KFTC determined that this constituted a violation of the Large-Scale Distribution Business Act, which requires specific agreements on product items and event durations to be signed by both parties before conducting promotional events.
Additionally, LF Networks was found to have requested sensitive business information, including sales figures and distribution fees for products sold at nearby department stores, from 47 suppliers between July 2022 and October 2025. This request violated legal provisions designed to prevent the misuse of sensitive business information in unfair trading practices.
As a result, the KFTC issued a prohibition order and notification order along with the fine of 418 million won.
A KFTC official stated, "The actions of large-scale distributors shifting promotion costs and demanding business information without proper agreements are serious legal violations. This will serve as a wake-up call. We will continue to monitor and take strict action against unfair trading practices targeting suppliers."
On August 11, the KFTC announced that it imposed a corrective order and a fine of 418 million won on LF Networks for transferring promotion costs without a valid written agreement and requesting sensitive business information from suppliers regarding sales at competing stores. LF Networks operates four locations, including in Incheon and Yangju.
According to the KFTC's investigation, LF Networks conducted 29 promotional events with suppliers from December 2022 to December 2024, issuing incomplete agreements that lacked specific product details and signatures. During this process, LF Networks shifted a total of 58.61 million won in promotion costs to 174 suppliers.
The KFTC determined that this constituted a violation of the Large-Scale Distribution Business Act, which requires specific agreements on product items and event durations to be signed by both parties before conducting promotional events.
Additionally, LF Networks was found to have requested sensitive business information, including sales figures and distribution fees for products sold at nearby department stores, from 47 suppliers between July 2022 and October 2025. This request violated legal provisions designed to prevent the misuse of sensitive business information in unfair trading practices.
As a result, the KFTC issued a prohibition order and notification order along with the fine of 418 million won.
A KFTC official stated, "The actions of large-scale distributors shifting promotion costs and demanding business information without proper agreements are serious legal violations. This will serve as a wake-up call. We will continue to monitor and take strict action against unfair trading practices targeting suppliers."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.