The Fair Trade Commission announced on the 2nd that it has initiated consent decision procedures regarding Hyosung and Hyosung Heavy Industries' actions of requesting technical documents from subcontractors. The consent decision is a system that closes a case based on corrective measures voluntarily proposed by businesses, instead of suspending judgment on whether there has been a violation of the law.
According to the Fair Trade Commission, Hyosung and Hyosung Heavy Industries were investigated by the Fair Trade Commission for allegedly requesting and using technical data from subcontractors during the process of entrusting the manufacturing of electrical equipment components. After receiving an examination report from the Fair Trade Commission in Nov. last year, both companies applied for a consent decision in March this year, containing measures to improve transaction order and foster mutual growth.
The Fair Trade Commission decided to initiate the consent decision procedures after comprehensively considering the nature of the case, the effect of restoring transaction order, and the expenses of implementing corrective measures. It particularly noted that it assessed the effectiveness of the corrective measures proposed by Hyosung, whether subcontractors were harmed, and the balance with the level of sanctions.
Hyosung's consent decision plan includes ▲building a contract management system for technical data requests and confidentiality maintenance ▲formulating operational guidelines and conducting regular training ▲supporting equipment to improve quality and working conditions for subcontractors. Additionally, Hyosung announced plans to implement a mutual growth plan worth 3 billion won, including joint research and development (R&D) with core component partners, industry-academia cooperation, and support for obtaining domestic and international certifications.
The Fair Trade Commission stated that through this decision, public benefit effects are expected, such as establishing order in subcontract transactions and enhancing subcontractors' technological competitiveness. Considering the growth trend of the electrical equipment industry, driven by the expansion of power grids and renewable energy, it emphasized structural improvement over simple sanctions.
This decision marks the first case of procedure initiation related to requests for technical data provision (Article 12-3 of the Subcontract Act) since the introduction of the consent decision system in July 2022. The Fair Trade Commission expressed hope that Hyosung's improvement of related practices could lead to the spread of a 'technical data protection culture' to other manufacturing sectors.
Going forward, the Fair Trade Commission plans to prepare a provisional consent decision plan with Hyosung after specifying corrective measures, gather stakeholder opinions, and engage in consultations with relevant agencies before submitting it for the Commissioner's final review. If the consent decision plan is finalized, the case will be closed without any legal violation judgment.