This article was published on May 12, 2025, at 4:56 p.m. on the ChosunBiz RM Report site.
The Fair Trade Commission has launched a field investigation into allegations of unfair subcontracting transactions involving large advertising agencies.
According to the industry on the 12th, the Fair Trade Commission recently dispatched researchers to secure relevant materials from the headquarters of four advertising agencies: HS Ad, a subsidiary of LG Group; Daehong Communications, a subsidiary of Lotte Group; ORICOM, a subsidiary of Doosan Group; and Adquah Interactive, a subsidiary of the KOSDAQ-listed FSN.
This investigation aims to examine whether actions such as failing to issue contracts in a timely manner with subcontractors to whom large advertising firms allocated advertising production, or delaying subcontracting payments, constitute violations of subcontracting law.
Previously, the Fair Trade Commission conducted a direct investigation into seven advertising agencies affiliated with large corporations, including Samsung (Cheil Worldwide), Hyundai Motor (INNOCEAN), Lotte (Daehong Communications), SK (SK Planet), Hanwha (Hancom), LG (HS Ad), and Doosan (ORICOM) in 2015. At that time, the Fair Trade Commission detected behaviors such as delayed issuance of contracts, non-payment of fees, and price undercutting, imposing a total penalty surcharge of 3.3 billion won. This investigation also appears to be conducted in a similar context to reassess the overall subcontracting transaction practices in the industry.
Meanwhile, Cheil Worldwide and INNOCEAN, which are excluded from this investigation, have received a 'best' rating in the Fair Trade Commission's evaluation of compliance with the Fair Trade Agreement and are currently benefiting from a two-year exemption from direct investigations. The Fair Trade Commission provides incentives such as exemptions from direct investigations and reductions in penalty points for businesses with excellent compliance records.
A representative of the Fair Trade Commission noted, "I cannot confirm whether the investigation is progressing or provide specific details," adding, "If any violations of the law are confirmed, strict measures will be taken."