'Abuse of Market Dominance' Sampaerail Faces Fair Trade Commission Sanctions

Blocking Competitors' Parts Purchases and Hindering Market Entry

[Image source=Yonhap News]

Sampyo Railway has been sanctioned by the Fair Trade Commission for blocking competitors from purchasing parts and hindering market entry in the railroad switch market.

On the 21st, the Fair Trade Commission announced that it would impose corrective orders and a fine of 400 million KRW on Sampyo Railway for abusing its dominant market position.

Sampyo Railway is a dominant player in the 'railroad switch' market, structures used for train track switching, holding nearly 100% market share.

According to the Fair Trade Commission, in 2016, when competitor Sean attempted to purchase parts such as manganese crossings and special rails?raw materials necessary for manufacturing switches?Sampyo Railway pressured parts manufacturers not to trade with Sean.

Blocked from purchasing manganese crossings, Sean developed an alternative part, alloy steel crossings, and manufactured switches using them, applying for performance verification from the Korea National Railway Corporation in 2018.

Upon learning this, Sampyo Railway unjustly interfered with the performance verification process, delaying Sean's verification.

They improperly obtained over 200 confidential documents, including the list of verification committee members and agenda items, and conveyed negative opinions about Sean's switches to committee members, engaging in 'obstruction tactics.'

As a result, Sean's entry into the railroad switch market was delayed by nearly four years, allowing Sampyo Railway to maintain its monopoly position.

The Fair Trade Commission determined that Sampyo Railway's actions hindered fair competition in the related market and caused restrictive effects such as delayed price competition and quality improvement, leading to the sanctions.

The Fair Trade Commission stated, "We plan to strictly enforce the law against anti-competitive acts by businesses that maintain and strengthen their monopoly position in markets where monopolies have been prolonged."