Urgent Order Excessive Penalty
Imposition of Correction Order
Renault Korea Motors (hereinafter Renault Korea) will be sanctioned by the Fair Trade Commission for abusing its power in setting automobile parts supply prices against its dealerships.
On the 22nd, the Fair Trade Commission announced that it had decided to impose corrective orders on Renault Korea for violations of the "Act on the Fair Transactions in Dealerships" (Dealership Act).
According to the Fair Trade Commission, Renault Korea unilaterally implemented an ultra-urgent order penalty system against dealerships, adjusting the supply prices of automobile parts and excessively reducing the dealerships' margins.
The ultra-urgent order penalty system allows dealerships to receive parts the next day if they place orders by 3 p.m. on weekdays regardless of the order day, but sets the supply price of those parts higher than regular orders.
From June 2012 to December 2022, Renault Korea imposed penalties totaling 394.63 million KRW on 305 dealerships by reducing their margins by over 90% or eliminating margins entirely when dealerships placed ultra-urgent orders for essential parts among their automobile parts. Furthermore, these terms were not included in the contracts signed between Renault Korea and the dealerships.
The Fair Trade Commission viewed Renault Korea's actions as unfairly using its superior bargaining position to disadvantage dealerships, violating Article 23, Paragraph 1 of the Monopoly Regulation and Fair Trade Act and Article 9, Paragraph 1 of the Dealership Act.
The Fair Trade Commission stated, "This is the first case since the enactment of the Dealership Act where a supplier of automobile parts has been sanctioned for abusing its superior bargaining position to disadvantage dealerships," and added, "It is significant in that it protects the rights and interests of small and medium-sized dealerships while raising suppliers' awareness of legal compliance."
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