The Ministry of SMEs and Startups said on the 1st that it convened the "31st Mandatory Accusation Request Deliberation Committee" and decided to ask the Fair Trade Commission to file complaints against Duwon Climate Control and Hyundai Kefico for violating the Fair Transactions in Subcontracting Act. Doowon Climate Control and Hyundai Kefico violated the Subcontracting Act by providing or misusing small businesses' technical data to third parties.
Duwon Climate Control is a manufacturer specializing in automotive climate control systems and outsourced the production of molds needed to manufacture vehicle heating and cooling devices to seven subcontractors. However, from Oct. 19, 2017, to Apr. 10, 2023, while requesting 99 mold drawings, Duwon Climate Control did not provide written requests for technical data.
When a prime contractor requests technical data from a subcontractor for a legitimate reason, it must consult in advance with the subcontractor on the purpose, ownership of rights, consideration, and more, and provide a document stating those details, but this was not carried out.
In addition, from Mar. 16, 2022, to Apr. 11, 2023, while receiving 17 mold drawings from five subcontractors, Duwon Climate Control did not sign confidentiality agreements. It provided five mold drawings to an overseas affiliate on three occasions without agreement with three subcontractors. When one subcontractor refused mold repairs due to issues such as payment settlement, it handed over one mold drawing to a competitor without consent.
For these violations, Duwon Climate Control received a corrective order and a 390 million won penalty surcharge from the Fair Trade Commission in June.
Hyundai Kefico, an affiliate of Hyundai Motor Group that manufactures engine parts such as motor controllers for electric vehicles, requested four mold drawings from a subcontractor without legitimate reason from May 24, 2018, to Jul. 23, 2021, and from Oct. 25, 2017, to Nov. 29, 2022, requested 24 mold drawings from a subcontractor without providing written requests for technical data.
From Feb. 23, 2022, to Jul. 6, 2023, while receiving six mold drawings from a subcontractor, it did not sign confidentiality agreements, and when another subcontractor declined a proposal for joint entry into the Vietnam local market, it provided five items of that subcontractor's technical data to a local supplier on two occasions without separate consultation.
For these violations, Hyundai Kefico received a corrective order and a 474 million won penalty surcharge from the Fair Trade Commission in 7th.
The ministry judged that when a prime contractor requests technical data from a subcontractor without providing written documents or without signing confidentiality agreements, such acts fail to prevent future misappropriation of technology and are representative violations that must be strictly eradicated.
It also concluded that providing or misusing technology received from a subcontractor to a third party is a serious unfair transaction that risks stripping small businesses of the results embodying years of know-how and severely hindering technological innovation, thereby potentially causing enormous damage to the victimized small businesses, and decided to request complaints against Duwon Climate Control and Hyundai Kefico.