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South Korea
Intelligence for Better Decision Making
Fair Trade Commission investigation on Coupang
Sept. 11, 2024 | Indirect Indicator- The Korea Fair Trade Commission (FTC) plans to tighten antitrust regulations on major online platforms like Naver and Kakao by banning four anticompetitive practices: preferential treatment, tie-in sales, restrictions on multihoming, and favorable management demands.
- The revision of the Monopoly Regulation and Fair Trade Act aims to increase corporate fines from 6% to 8% of annual revenue and impose a stronger burden of proof on companies for suspected anticompetitive practices.
- The FTC will have the authority to temporarily halt business operations it deems anticompetitive under the new regulations.
- New rules will apply to platform operators with significant market dominance and exclude companies with less than 4 trillion won in annual revenue.
- The government has decided to abandon the enactment of the Online Platform Act in favor of post-regulation measures, opting for amendments to the Fair Trade Act through extensive stakeholder consultations.
- Major platform companies like Coupang and Baedal Minjok will be exempt from immediate regulatory scrutiny, while Naver, Kakao, and Google are expected to fall under the revised regulation.
- Industry concerns persist about selective regulation that targets domestic firms, potentially leaving foreign companies less regulated.
- The FTC plans to revise both the Monopoly Regulation and Fair Trade Act and the Large-Scale Distribution Business Act to resolve industry conflicts and foster fair competition among platforms.
- The proposed revisions focus on banning anti-competitive practices and setting a burden of proof on businesses, though the platform industry worries about potential growth inhibition.
- Coupang has filed an administrative lawsuit against the FTC after being fined 162.8 billion won for manipulating search rankings and misleading reviews to favor its private brand products.
- The revised Fair Trade Act will impose regulations based on a company's market share and user base, affecting major firms like Google, Apple, Naver, and Kakao, but excluding Coupang and Baedal Minjok.
- The maximum fine for confirmed anti-competitive practices will increase from 6% to 8% of relevant sales, and a new temporary suspension order system will be introduced.
- Coupang has appealed a record fine of 162.8 billion won imposed by the FTC for search result manipulation and unfairly favoring its private brand products.
- The FTC has initiated an investigation into CJ Olive Young for suspected supplier bullying, including pressuring suppliers to avoid events hosted by rival platform Musinsa.
- Coupang's bundling of services like Coupang Eats and Coupang Play into a subscription package has raised antitrust concerns, prompting an FTC investigation into potential misconduct.
TMON and WeMakePrice entering rehabilitation proceedings
Sept. 11, 2024 | Indirect Indicator- The Seoul Bankruptcy Court has granted a rehabilitation process for e-commerce platforms TMON and WeMakePrice.
- Both companies are experiencing a liquidity crisis due to nearly 1 trillion won (US$744 million) in overdue vendor payments. They filed for rehabilitation on July 29, citing financial difficulties from significant refund requests and the loss of business partners.
- The rehabilitation process follows their application for court-supervised rehabilitation, attributing their financial struggles to aggressive merger deals by their owner, Qoo10. Approval for this request was granted by Judge Ahn Byung-wook on September 10, 2024.
- The companies had been undergoing a restructuring support program since August 2 but failed to present adequate self-rescue plans in a timely manner.
- The court will appoint custodians to identify creditors and debts and to create rehabilitation plans, which are subject to final court approval. An administrator will compile a list of creditors and finalize the rehabilitation plan based on their claims.
Monitored Intelligence for South Korea - Sept. 13, 2024
News
Media
389
Government
Releases
17
City/State
Releases
76
Embassy
Releases
0
Foreign
Service
Advisories
0
Service
Advisories
0
Academic/
Think
Tank
9
Think
Tank
9
Podcasts
0
Videos
0
Social
Media
0
Business
Releases
3
Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.
The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.
Risk Categories Reported on Today
Risk Category
Items Reported On
Accidents
2
Geopolitical Conflict and Disputes
5
Extreme Weather Events
2
North Korea
20
Supply Chain Issues
2
Strikes and Work Stoppages
1
Natural Disasters
1
Climate Change
1
Crime
8
IP Protection
3
Regulation
5
Cyber Attacks and Data Loss
1
Epidemics and Pandemics
1
Corporate Corruption or Fraud
1
Product Recalls
1
Privacy
1
Political Scandal or Corruption
1
Erudite Risk also includes operations categories so you can monitor the environment for better decision making. Everything is tied together--what happens in risk affects operations and what happens in the market impacts risk profiles.
We categorize key intelligence into one of 30 different operations intelligence categories.
Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.
Operations Categories Reported on Today
Operations Category
Items Reported On
Employment
3
Asset Price Change
10
Mergers & Acquisitions
7
Economic Growth
2
Supply Chain Issues
3
Financial System Problems
2
Demographics
3
Real Estate
3
Inflation
1
Trade Issues and Numbers
2
Bizdev-Partnering
2
Bankruptcy-Insolvency
1
Tech Development/Adoption
1
Unemployment
1
대형 저축은행도 '올킬'…부실 만큼 충당금 못 쌓았다
Large Savings Banks Also ‘All-Kill’… Unable to Accumulate Reserves for Bad Debts
ET News | Local Language | News | Sept. 13, 2024 | Bankruptcy-Insolvency
The increase in bad loans among savings banks is outpacing the accumulation of reserves, raising concerns about risk management. According to the Financial Supervisory Service, the reserve ratios for bad loans in the top five savings banks (SBI, OK, Korea Investment, Welcome, and Acuon) are all below 100%. Korea Investment & Savings Bank has the lowest reserve ratio at 51%, significantly decreasing from 87.6% last year. Other banks, like Aekyung Savings Bank, OK Savings Bank, Welcome Savings Bank, and SBI Savings Bank, also experienced declines in their reserve ratios despite increases in accumulated reserves due to rising fixed and below-average loans. The average delinquency rate among 79 savings banks rose to 8.36%, prompting concerns about the potential for new bad debts amid real estate sector challenges. The Financial Services Commission has emphasized the importance of sufficient reserve accumulation and capital increase to address potential losses in light of the ongoing real estate PF screening and restructuring efforts.
Tightening of household loan regulations seems to be working: financial regulator
Korea Times | English | News | Sept. 13, 2024 | Financial System Problems
Kim Byoung-hwan, chairman of the Financial Services Commission (FSC), reported that the implementation of stricter household loan regulations is starting to yield results, noting that the debt balance for the first week of September was half of the previous month's level. In August, household loans saw a substantial increase of 9.8 trillion won, the highest monthly growth in three years. In response, authorities have tightened lending regulations through stricter debt service ratio (DSR) rules, which became effective on September 1, and are monitoring the situation for potential further measures. Kim emphasized the need to distinguish between borrowers with genuine needs and those seeking loans for speculative purposes. Additionally, preparations are underway to lift the full ban on stock short selling by March 31, 2024. This ban, introduced in November, was extended after its original expiration date in June. The move aims to enhance Korea's capital market and is part of efforts to address the country's exclusion from the MSCI-developed market index. Kim stated that the objective is to improve corporate value and attract global investment, while the success of these efforts is contingent on meeting necessary market criteria.
S. Korea, Philippines discuss stronger ties on trade, supply chains, EVs
Yonhap | English | News | Sept. 13, 2024 | Supply Chain Issues
South Korea and the Philippines held discussions on enhancing cooperation in trade and supply chains during their third economic and trade cooperation committee meeting via teleconferencing. The meeting involved South Korea's Deputy Trade Minister and the Philippines' assistant secretary of the industry ministry. They emphasized the swift implementation of their free trade pact signed last year and agreed to collaborate on supply chains for key raw materials, shipbuilding, offshore wind power, and the development of electric vehicles. The Philippines expressed interest in strengthening ties related to energy security and net-zero goals. In 2022, bilateral trade reached $13.7 billion, with around 300 South Korean companies operating in the Philippines.
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