"Hyundai AutoEver" fined for forcing subcontractors to "hand over technical data"

"Requesting Technical Data Not in Contract is Illegal"... Fair Trade Commission,
Imposes 20 Million KRW Fine on Hyundai AutoEver on the 1st
First Sanction for Demanding Technical Data in System Development Sector

On the 1st, the Korea Fair Trade Commission (KFTC) decided to issue a corrective order and impose a fine of 20 million KRW on Hyundai AutoEver, an affiliate of Hyundai Motor Company, for unjustifiably demanding technical data from a subcontractor. This is the first case in which a demand for technical data in the system development field was detected and sanctioned.

According to the KFTC, in 2018, Hyundai AutoEver unjustifiably demanded technical data from a subcontractor responsible for hardware and firmware during the smart tag system project supplied to Hyundai Motor Company. The smart tag system project involves attaching smart tags to vehicles produced at various Hyundai Motor factories to exchange key information about the manufacturing process, vehicle models, and sales countries with the production equipment.

The KFTC judged that the technical data demanded by Hyundai AutoEver was not the subject matter of the contract and recognized the illegality of the demand. This is because there was no provision in the contract for the smart tag system project that considered the technical data in question as the contract’s subject matter. The KFTC explained, “It has been clarified that a principal company with superior bargaining power demanding data that is not the subject matter of the contract from a subcontractor without justifiable reason constitutes an unjustified demand for technical data and violates the Subcontracting Act.”

This case is the first instance where the KFTC detected and sanctioned a demand for technical data in the system development field. The KFTC stated, “We will continue to monitor violations of procedures protecting small and medium-sized enterprises’ technical data, including misuse of technical data and other legal violations.”