Seoul’s anti-trust regulator, the Fair Trade Commission (FTC) has fined six logistics and transportation companies a total of WON6.84 billion (US$5.87 million) for a 14-year collusion over bidding contracts.
Heavy lift operator Dongbang was hardest hit with a WON2.78 billion penalty, Sebang followed with WON1.89 billion, Global WON692 million, KCTC WON630 million, Korea Logistics WON493 million and CJ Logistics WON337 million.
Collusion by the six companies took place after shipbuilder Hyundai Heavy Industries shifted to an open bidding process in 2005. According to local reports the FTC investigation found that the logistics firms had “been colluding for 14 years in 34 biddings [bid processes] to prevent their freight charge from being discounted through competitive bidding.”
The FTC said that the companies had bid for heavy lift contracts during the 2005 to 2018 period and by allocating work volumes in advance and designating winning bidders they were able to fix prices.
The companies were also said to have conspired in three integrated bids from 2015 to 2018 that prevented the winning bid from falling below their target price. After winning the bid, a selected company contracted out transportation projects at a target price, said the FTC.
