The golf club importer Dunlop Sports Korea has been penalized for allegedly forcing its dealers to stop discount sales and not sell products below a specific price.
The Fair Trade Commission noted on the 3rd that it is imposing a penalty surcharge of 1.865 billion won on Dunlop Sports Korea for violating the Fair Trade Act.
According to the Fair Trade Commission, Dunlop Sports Korea set minimum selling prices for Japanese brand A golf clubs it imports and distributes from 2020 to 2023, and imposed disadvantages on dealers who violated these prices.
In this process, Dunlop pressured dealers who sold products below a certain price by threatening to suspend supply of popular products, recall existing delivered products, terminate transactions, and reduce financial support.
There were also indications that, on 7 to 9 occasions each year, investigators disguised as customers visited stores directly or monitored dealers by checking prices online daily. The Fair Trade Commission's investigation found that dealers who actually violated pricing standards faced supply suspensions and other disadvantages. The Fair Trade Commission judged that these actions prevented dealers from freely setting prices and limited price competition at the distribution stage, which constitutes illegal conduct.
Dunlop was also criticized for prohibiting transactions with non-dealers (vendors without official contracts) to prevent dealers from engaging in resale transactions. This was due to the concern that if non-dealers sold golf clubs at lower prices, it could undermine Dunlop's minimum price policy. It was confirmed that Dunlop has prevented dealers from transferring products to non-dealers by imposing disadvantages such as transaction suspensions.
This is not the first time that price restriction practices have occurred in the golf club market. In 2009, the Fair Trade Commission imposed penalties on six golf club retailers for allegedly enforcing resale price maintenance. While Dunlop Sports Korea was not included in the targets at that time, it was revealed that it continued similar price restriction practices afterward. The maximum penalty surcharge at that time was 400 million won.
A Fair Trade Commission official said, "After the penalties in 2009, awareness of legal violations, which had loosened for a while, will be awakened," adding, "We expect consumers will be able to purchase golf clubs at lower prices."