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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Major South Korean paper manufacturers are expected to refrain from filing administrative lawsuits despite facing record antitrust fines, opting instead to focus on financial mitigation strategies.
According to industry sources on May 13, companies including Moorim SP, Moorim Paper, Moorim P&P, Hankuk Paper, Hansol Paper, and Hongwon Paper are reviewing whether to challenge fines imposed by the Fair Trade Commission over alleged price-fixing.
However, industry consensus suggests that the firms are unlikely to pursue litigation, having already acknowledged the collusion and issued public apologies shortly after the regulator’s decision. The companies also reportedly did not file formal objections following the initial ruling.
The firms are accused of coordinating price increases for printing paper over a period of approximately three years and ten months. The regulator concluded that the collusion led to unjustified price hikes passed on to consumers.
The total fines amount to KRW 338 billion, marking the largest penalty ever imposed on the domestic paper industry. This comes as the sector is already grappling with prolonged downturns, with the fines equivalent to roughly five times the combined net profit of the six companies last year.
Given the difficulty of overturning admitted violations and the potential reputational costs, companies are expected to prioritize confirming mitigation factors reflected in the final ruling and exploring options such as installment payments.
Under current guidelines, fines may be reduced by up to 20% if companies cooperate during investigations and acknowledge wrongdoing. If fully applied, the total penalty could be lowered to approximately KRW 270.4 billion, depending on each firm’s level of cooperation and degree of involvement, which will be detailed in the final decision documents.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
