The Fair Trade Commission imposed a corrective order and a penalty surcharge on the Gyeongju Construction Cooperative. The issue arose because the cooperative uniformly set minimum prices for supervision fees and controlled the designation of supervisors and revenue distribution.
The Fair Trade Commission announced on the 26th that it imposed a penalty surcharge of 262 million won along with a corrective order on the Gyeongju Construction Cooperative.
According to the Fair Trade Commission, the Gyeongju Construction Cooperative calculated the standard price of supervision fees by multiplying the construction cost by the supervision rate, posted it on their website, and operated an automatic calculation program to effectively lead the members to contract at set prices. Additionally, to ensure that the supervision fees were not set too low, the minimum supervision fee was fixed at 4 million won, limiting the members' ability to set prices autonomously.
Additionally, the cooperative established a round-robin selection method for members to be designated as supervisors, and decided to recoup 20% of the supervision fees as operation costs for the designer and the cooperative. If the selection of a supervisor was delayed, operational subsidies of 1.1 million won were provided to the delayed member to maintain the rotation.
The Fair Trade Commission determined that these actions fell under the prohibited acts by business groups as stipulated in the Fair Trade Act (Article 51, Paragraph 1, Subparagraphs 1 and 3). This was due to jointly deciding the price of supervision fees and unfairly restricting the business activities of members.
A Fair Trade Commission official noted, "The sanction against the cooperative, an expert organization in the construction field, was for limiting competition among themselves to maximize profits. This measure is significant in that it will promote competition in the construction supervision market and help reduce the construction cost burdens for clients."