The Fair Trade Commission (FTC) yesterday filed suit against Carrefour Korea (QQ), arguing that the domestic arm of the French retailing giant has engaged in “inappropriate business practices.”
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The FTC launched an investigation into the supermarket chain last November to determine if it had carried out “required duties” regarding allegations of improper business behaviour. These included imposing financial burdens on its subcontract companies; for instance, fees for advertisement, part time workers or sampling. Such “irrational transactions” brought in 97.8bn won for the chain last year, 57.1bn won in 1999 and 22.7bn won in 1998.
QQ was also blamed for returning products to suppliers despite the fact that the supermarket was responsible for ordering mistakes.
In March of 2000, the FTC ordered Carrefour to implement measures to deal with the improper practices, but according to an FTC official, the investigation “found that the company has failed to take steps to ameliorate the situation.”
Carrefour Korea has made no comment on the FTC accusations, but is now subject to a 500m won fine.
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