SMEs Ministry Requests Fair Trade Commission to Refer Yanolja and Good Choice for "Unused Discount Coupon Forfeiture"

Mandatory Prosecution Request Review Committee Convened
Inpack and Inpack EPM Referred for Prosecution over Subcontracting Act Violations

The Ministry of SMEs and Startups announced on the 14th that it convened the "32nd Mandatory Prosecution Request Deliberation Committee" and decided to request the Fair Trade Commission to refer Yanolja, Yeogiwootae Company, Inpack, and Inpack EPM to the prosecution.

The mandatory prosecution request system allows the Ministry of SMEs and Startups to request the Fair Trade Commission to refer cases involving violations of six laws, including the Subcontracting Act and the Fair Trade Act, to the prosecution, even if the Fair Trade Commission has not initiated prosecution. The Fair Trade Commission is then obligated to refer such cases, taking into account the damage to small and medium-sized enterprises and the potential social impact.

Yanolja, from February 2017 to May 2024, sold "Nearby Coupon Advertising" products-which included the cost of discount coupons-to partner businesses. After the advertising contract period ended, approximately 1.2 billion won worth of unused discount coupons were extinguished without refund. In August last year, the Fair Trade Commission issued a corrective order and imposed a fine of 540 million won.

Similarly, from June 2017 to August last year, Yeogiwootae sold "Premium Advertising" products that included the cost of discount coupons. The coupon validity period was set to just one day, and approximately 35.9 billion won worth of unused discount coupons were extinguished without refund. In August last year, the Fair Trade Commission issued a corrective order and imposed a fine of 1 billion won.

The Ministry of SMEs and Startups determined that Yanolja and Yeogiwootae, as online platform operators, abused their superior bargaining positions in violation of the Fair Trade Act, causing harm to small and medium-sized enterprises.

Inpack and its affiliate Inpack EPM, which were also included in this prosecution request, caused harm to subcontractor SMEs by failing to issue written documents, unfairly reducing or withholding payments, and making unjust demands for economic benefits in subcontracting relationships. Both Inpack and Inpack EPM received corrective orders and fines from the Fair Trade Commission in September last year. The Ministry of SMEs and Startups assessed that the two companies caused a total of 671.6 million won in damages to subcontractor SMEs through their illegal actions.

The Ministry explained that it decided to request prosecution because both the unfair practices of platform operators, which have a significant impact on many accommodation businesses, and the chronic illegal acts in subcontracting transactions require strict sanctions.

Lee Byungkwon, Chair of the Mandatory Prosecution Request Deliberation Committee and Second Vice Minister of the Ministry of SMEs and Startups, stated, "The mandatory prosecution request system is designed to protect SMEs from unfair practices by businesses in a superior bargaining position." He added, "This decision to request prosecution is meaningful in protecting SMEs and small business owners from abuses of power by platform operators and non-payment of fees by principal contractors." He continued, "We hope that strict responses to various forms of unfair practices targeting SMEs and small business owners will help improve the business environment."