Fair Trade Commission Orders Kumho Tire to Rectify Unfair Demands for Sales Data from Dealerships

(Seoul=Yonhap Infomax) Pil Joong Jeong – The Fair Trade Commission (FTC) announced on the 26th that it has issued a corrective order to Kumho Tire Co. [073240], finding that the company violated the Agency Business Act by requiring all dealerships to provide information such as product sales amounts without justifiable reason.

According to the FTC, from January 2015 to June this year, Kumho Tire demanded that dealerships input consumer sales data into its electronic system, thereby acquiring sensitive sales information.

Dealership sales figures and related data are considered critical business secrets. When the headquarters obtains such information, dealership profit margins are exposed, potentially placing dealerships at a disadvantage in future supply price negotiations.

The FTC determined that Kumho Tire abused its superior bargaining position to interfere with dealership operations, constituting a violation of the Agency Business Act.

Additionally, during the same period, Kumho Tire required some dealerships—where existing collateral was already sufficient to manage the risk of uncollected receivables—to provide joint guarantors as a condition for transactions.

While collateral is generally necessary for credit transactions, the size of the collateral should be limited to the minimum required. The FTC found that Kumho Tire set unfair transaction terms by exploiting its dominant position, thereby violating both the Agency Business Act and the former Fair Trade Act, South Korea’s antitrust law.

Following the launch of the investigation, Kumho Tire voluntarily ceased the violations and signed amended contracts with all dealerships, removing the problematic clauses.

joongjp@yna.co.kr

(End)