Korea FTC Fines Six Paper Makers for Price-Fixing and Orders Rollbacks

The Korea Fair Trade Commission said on the 23rd that it imposed a 338.325 billion won penalty surcharge on six paper companies on suspicion of colluding to fix printing paper prices for about four years and ordered them to reset their prices. The Korea Fair Trade Commission (FTC) also decided to refer two paper companies to prosecutors.

According to a Korea Fair Trade Commission (FTC) probe, six paper companies (Moorim SP, Moorim Paper Moorim P&P, Hankuk Paper, Hansol Paper, Hongwon Paper) agreed to raise the prices of printing paper supplied to printing firms and publishers from Feb. 2021 to Dec. 2024. The six companies held a market share of more than 95% in 2023.

Employees who led the collusion met more than 60 times over three years and 10 months. When contacting each other, they used nearby pay phones, restaurant phones, or the mobile phones of employees in other departments instead of their own phones. They carried contact lists noted on paper with initials or aliases. Using these methods, they raised printing paper prices seven times, and as a result the prices rose by an average of 71%.

Fearing backlash if they were the first to notify clients such as printing firms or publishers of price hikes, the companies involved in the collusion sometimes set the order in which they would give notice. They decided the order by tossing coins or dice. On this, the Korea Fair Trade Commission (FTC) applied a charge of violating Article 40, Paragraph 1, Subparagraph 1 of the Monopoly Regulation and Fair Trade Act, which prohibits price collusion. The FTC determines whether to refer companies to prosecutors based on the seriousness of the violations and the degree of involvement, and in this case decided to refer Hankuk Paper and Hongwon Paper to prosecutors.

The size of the penalty surcharge in this case is the largest ever imposed by the Korea Fair Trade Commission (FTC) in a collusion case involving paper companies. The previous largest penalty was in a 2016 case of collusion among 12 manufacturers of corrugated cardboard medium and six manufacturers of corrugated cardboard linerboard (110.8 billion won).

Nam Dong-il, vice chair of the Korea Fair Trade Commission (FTC), said, "We ordered each paper company to independently reset prices to a level that restores competition to the pre-collusion state," adding, "We also required them to report any changes to the Korea Fair Trade Commission (FTC) every half-year for the next three years."