Hyundai Kefico has been sanctioned by the Korea Fair Trade Commission (KFTC) for misappropriating technical data related to parts development from small subcontractors.
On the 23rd, the KFTC announced its decision to impose a corrective order and a fine of 474 million KRW on Hyundai Kefico for violations of the 'Fair Transactions in Subcontracting Act' (Subcontracting Act).
Hyundai Kefico, an affiliate of Hyundai Motor Group, manufactures automotive engine parts such as motor controllers for electric vehicles. Sales to Hyundai Motor, Kia, Hyundai Glovis, and other Hyundai Motor Group affiliates account for a significant portion of its revenue. As of the end of 2023, its annual sales and net profit reached 2.4583 trillion KRW and 75 billion KRW, respectively.
According to the KFTC investigation, Hyundai Kefico provided five pieces of technical data related to parts development to competing companies without consulting the original subcontractors and used this data in parts development.
It was also confirmed that Hyundai Kefico unjustifiably demanded technical data, including four sets of mold drawings, from other subcontractors without legitimate reasons.
The KFTC stated, "We also took corrective action against 24 instances where Hyundai Kefico requested and received mold drawings from subcontractors without providing a written request specifying the purpose of the technical data, and six instances where no non-disclosure agreement was signed."
Additionally, the KFTC explained that a warning was issued after detecting that Hyundai Kefico had unilaterally imposed confidentiality obligations solely on the subcontractors through special clauses in 19 mold manufacturing contracts signed with three subcontractors.
These actions constitute violations of Articles 3 and 12 of the Subcontracting Act. The KFTC detected and sanctioned these violations through an ex officio investigation into the automotive mold industry.
Kim Honggeun, Director of the KFTC’s Technical Misappropriation Investigation Division, stated, "Even if these actions were not intended to lower supply prices or diversify suppliers, it is significant that we strictly sanctioned both the unjustifiable demands for technical data from subcontractors beyond the minimum necessary scope and the provision of such data to third parties."
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