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Biz News Korea(Eng)

Olive Young slapped with $1.43 mn fine for unfair supplier practices

Collected: 2023.12.08

Distributed: 2023.12.09

Source: Go Direct

[Courtesy of Olive Young]

The South Korean competition watchdog fined CJ Olive Young Corp. nearly 1.9 billion won ($1.44 million) for unfair practices against its suppliers. The chain, which sells health and beauty products, was found guilty of hindering its suppliers from participating in competitors’ promotional events, delivering goods at lower prices, and pocketing the price difference as profit.

Despite initial expectations of a fine of up to 600 billion won, the Fair Trade Commission (FTC) imposed a 1.89 billion won fine on the company on Thursday for violating the Large-scale Distribution Business Act. The corrective order also includes a notification to suppliers.

While the antitrust regulator acknowledged CJ Olive Young’s significant presence in the retail healthcare and cosmetics market, it refrained from classifying the company as a market-dominant player. The review highlighted the dynamic and diverse nature of the cosmetics retail channel, which can experience rapid growth or fall at any time. Regarding the so-called Exclusive Brand policy implemented by CJ, the regulator stated that there was not enough evidence of illegality but that it would monitor the situation.

CJ Olive Young gives financial advantages to suppliers that do not have any partnerships with rival retailers under this Exclusive Brand (EB) policy.

By Lee Jin-han and Han Yubin

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