The Korea Fair Trade Commission said on the 15th it will impose a penalty surcharge of 569 million won and an order to correct on Lotte Shopping for alleged violations of the Act on Fairness in Large Franchise and Retail Business.
According to a Korea Fair Trade Commission (FTC) probe, Lotte Shopping entered into 101 contracts with 97 suppliers from Jan. 13, 2021, to Feb. 23, 2024, but did not provide them with the written contracts. Under the Act on Fairness in Large Franchise and Retail Business, large retailers such as Lotte Shopping must provide, immediately upon concluding a contract, a written contract bearing the statutory terms and the signatures and seals of both parties. However, Lotte Shopping provided the written contracts up to 201 days after the contracts were concluded.
Lotte Shopping also paid product sales proceeds to 80 suppliers up to 386 days after the statutory payment deadline. The statutory payment deadline is within a maximum of 60 days after receiving the goods. If payment is late, delay interest must also be paid, but Lotte Shopping did not pay the delay interest. The unpaid delay interest totals 34.34 million won.
For three years from Aug. 2, 2021, it returned 19,853 products purchased from nine suppliers without justifiable reason. The total value is 224.67 million won. From Mar. 9, 2021, to Apr. 27 of the same year, it had employees of six suppliers work at Lotte Shopping business sites without concluding a worker dispatch agreement.
The Korea Fair Trade Commission (FTC) applied allegations that Lotte Shopping violated Article 6(1) of the Act on Fairness in Large Franchise and Retail Business, which mandates delivery of written contracts, and Article 8 of the same act, which prohibits delayed payment of product prices. It also applied allegations of violating Article 10(1) of the same act, which prohibits unjustified returns of directly purchased products, and Article 12(1), which prohibits the use of suppliers' employees.