Three Companies Dominating Domestic Newsprint Market Fined 30.5 Billion KRW for Price Collusion

Fair Trade Commission Corrective Orders and Fines Imposed
One of Three Companies Prosecuted

Yonhap News

Three companies that have supplied newsprint to domestic newspapers were fined a total of 30.5 billion KRW by the Korea Fair Trade Commission (KFTC) on the 21st for colluding to raise prices. The companies involved in this collusion case are Jeonju Paper, Daehan Paper, and Paper Korea, among which Jeonju Paper was reported to the prosecution.

These three companies are oligopolistic businesses with a 100% market share, purchasing domestic and international waste paper to produce newsprint and then selling it to newspapers and other clients.

According to the KFTC, these three companies colluded to jointly raise newsprint prices and reduce supply from June 2021 to March of last year.

Specifically, after raw material prices increased since 2020, the three companies agreed to raise product prices together and reduce supply to newspapers that did not accept the price increases. To this end, sales representatives from each company met at least nine times near newspaper offices and maintained frequent contact through Telegram chats and phone calls.

Through this collusion lasting about one year and nine months, the three companies raised the price of newsprint by 60,000 KRW per ton in October 2021 and again in June 2022, and reduced supply to three companies that did not accept the price increases during the process.

During this period, it was confirmed that the three companies increased the average selling price of newsprint by about 120,000 KRW (16%) per ton through collusion.

The KFTC pointed out, "This collusion raised the price of newsprint, which is essential for newspaper publishing, causing damage to trading partners such as newspapers, and led to an increase in newspaper subscription fees, thereby increasing the burden on the public who subscribe to newspapers."

The KFTC regarded this as a violation of Article 40, Paragraph 1, Item 1 of the Monopoly Regulation and Fair Trade Act (Fair Trade Act), which prohibits unfair joint acts.

The KFTC stated, "We impose corrective orders and a total fine of 30.537 billion KRW on the three companies," and added, "Considering the degree of involvement in this case and cooperation with the KFTC investigation, we decided to report Jeonju Paper to the prosecution."

It further added, "This action is significant in that it strictly penalized the oligopolistic newsprint manufacturers who used the rise in raw material prices as an excuse to illegally pass their cost burdens onto newspapers and the public through collusion," and "We hope this measure will serve as an opportunity to eradicate the chronic collusion practices in the newsprint manufacturing industry, where legal violations are repeatedly committed."