Fair Trade Commission: "Dongbang, Hanjin, Dongyeon Teuksu Colluded in Steel Plate Transport Bidding... Corrective Order and 177 Million Won Fine"

[Asia Economy Reporter Joo Sang-don] Three companies, Dongbang, Hanjin, and Dongyeon Special, have been sanctioned by the Fair Trade Commission for colluding in a bid for steel plate transportation services.

On the 25th, the Fair Trade Commission announced that it decided to impose corrective orders (prohibition of future acts) and a total fine of 177 million KRW on these three companies.

According to the Fair Trade Commission, from 2016 to 2018, Dongbang, Hanjin, and Dongyeon Special prearranged the successful bidders, dummy bidders, and bid prices in the bidding process for selecting transportation service providers for POSCO’s Pohang Steelworks’ post-production steel plate products (used in shipbuilding and industrial machinery) conducted annually.

The bidding officers of the three companies held meetings several days before the bidding date to agree on the transportation sections each carrier would win and the bid prices for each section (ranging from 97% to 105% compared to the previous year).

Dongbang and Hanjin submitted bids at the prearranged prices in the bids from 2016 to 2018, and Dongyeon Special did so in the 2018 bid. Among the 77 transportation sections subject to the agreement, the designated successful bidders won in 42 sections. The revenue generated from services performed by these three companies in the agreed transportation sections amounted to approximately 5.2 billion KRW.

A Fair Trade Commission official stated, "Among the subjects of this action, Dongbang and Hanjin are representative logistics companies in Korea, so this measure is expected to help prevent collusion in the transportation market and reduce transportation costs, which are one of the major cost factors in various industries." He added, "We plan to continue providing legal violation prevention education to related industries to prevent collusion in public and private sector bids and to conduct thorough monitoring activities."