Seongwoo Hightech, a mid-sized company supplying automobile bodies to Hyundai and Kia Motors, has been sanctioned by the Fair Trade Commission for unilaterally imposing confidentiality obligations only on subcontractors.
On the 28th, the Fair Trade Commission announced that it decided to issue a corrective order and impose a fine of 40 million won on Seongwoo Hightech for violating the "Act on the Fairness of Subcontract Transactions."
According to the Fair Trade Commission, from June 2019 to February 2022, Seongwoo Hightech entrusted subcontractors with the production of body parts and exchanged technical data during the development process, but unilaterally imposed confidentiality obligations only on subcontractors regarding its own technical data through special agreements.
Agreements that impose confidentiality obligations on information and materials obtained in subcontract transactions solely on subcontractors are typical unfair special agreements as defined in the Fair Trade Commission's Unfair Special Agreement Notice.
In addition to the act of establishing unfair special agreements, the Fair Trade Commission also sanctioned Seongwoo Hightech for failing to provide written requests specifying the purpose when demanding 146 pieces of technical data containing subcontractors' know-how from October 2017 to October 2020.
The Fair Trade Commission stated, "This case is the first instance of sanctioning unfair special agreements related to confidentiality obligations on technical data since the enactment of the Unfair Special Agreement Notice in 2019," and added, "We plan to strengthen monitoring and sanctions not only against the misuse of technical data but also against violations of technical data protection procedures to actively protect subcontractors' rights related to technical data."
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