Corporate watchdog fines 6 LPG suppliers 668.9 bln won for price-rigging

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SEOUL, Dec. 2 (Yonhap) -- South Korea's antitrust watchdog said Wednesday that it
has decided to fine six major liquefied petroleum gas (LPG) suppliers a combined
668.9 billion won (US$580 million) for fixing prices for their products in the
local market.

The companies subject to the regulatory measure are E1 Corp., SK Gas Co., SK
Energy Co., GS Caltex Corp., Hyundai Oilbank Co. and S-Oil Corp., the Fair Trade
Commission said in a statement.
The penalty is less than an earlier forecast of more than 1 trillion won, but it
is still the largest ever imposed on a single industry here, indicating that the
government is tough on activities that hamper fair market competition.
"The LPG suppliers had been fixing prices of products for six years that are
closely linked to the lives of ordinary people. Our investigation has found that
such a practice resulted in transferring higher and inappropriately set prices
onto consumers," Son In-ok, vice chief of the FTC, said in a press conference.
"We ordered the suppliers to stop engaging in such practices and decided to
impose a total of 668.9 billion won in fines on the six companies," he added.
SK Gas was fined the largest sum at 198.7 billion won, followed by E1 with 189.4
billion won, SK Energy with 160.2 billion won and GS Caltex with 55.8 billion
won.
The FTC, however, will exempt all or a half of the penalties slapped on SK Energy
and SK Gas, granting leniency for their report to the authorities about the price
collusion in the industry.
They were found to have colluded in fixing prices of their products, such as
propane and butane, from 2003-2008 by sharing information and cooperating in
making decisions on prices.
The collusion was practiced especially after the government lifted its
price-monitoring rule in 2001 for the LPG industry. Until then, LPG suppliers
were required to receive approval before adjusting product prices.
Industry sources estimate that they reaped trillions of won in improper profits
through the action.
The FTC move follows its investigation last year into those companies on
suspicion that they tended to raise LPG supply prices almost simultaneously and
by the same extent. The watchdog convened a meeting in mid-November on the issue,
but failed to decide on the level of punishment.
The harsh punishment seems to be in line with the FTC's renewed strong stance
that it will not tolerate anti-competition market practices.
In July, the watchdog slapped Qualcomm Inc. with a record 260 billion won in
fines in a tough ruling against the U.S. company for violating the nation's fair
competition rules by abusing its market monopoly. For similar reasons, local soju
makers were recently slapped with over 200 billion won in fines.
"The FTC will continue its watchdog role in enforcing tough measures against
price-fixing and other practices that could hamper fair market competition, and
especially have an immediate impact on the lives of ordinary people," Son said.
The LPG suppliers, meanwhile, are denying wrongdoings, adding that the level of
punishment is also too harsh.
kokobj@yna.co.kr