Internet application agencies were caught by the Fair Trade Commission providing development funds and goods to universities in exchange for service contract agreements.
The Fair Trade Commission noted on the 6th that it imposed corrective orders on the unfair customer inducement practices of Youwei Apply and Jinhak Apply.
Agencies enter into contracts with universities to provide application processing services and receive fees ranging from 4,000 to 5,000 won from an entrance examination fee per person (30,000 to 100,000 won). This market is dominated by two companies, Youwei and Jinhak.
According to the Fair Trade Commission, these companies have been providing payments to universities since 2013 to either establish new contracts for internet application processing services or maintain existing contracts.
Specifically, it was found that Youwei paid 4.899 billion won to 93 universities, while Jinhak provided payments amounting to 4.69192 billion won to 78 universities. This includes monetary benefits such as development funds, workshop support, sports event sponsorship, concert sponsorship, and goods such as iPads, multifunction printers, laptops, and team uniforms.
The Fair Trade Commission explained, "The provision of development funds, sponsorships, or goods cannot be considered competition based on price and quality," adding, "Such practices may slow down price competition for application processing fees, thereby harming the examinees who ultimately bear the costs, which constitutes an unfair method of inducing customers."
A Fair Trade Commission official said, "Through this measure, we expect competition based on price and quality to be stimulated in the internet application processing service market, particularly enhancing competition for lowering application processing fees," and that, "We will continue to monitor unfair methods of attracting customers that do not conform to normal practices in the educational market in the future."