The Korea Fair Trade Commission said on the 21st it ordered Doosan Bobcat Korea to correct unfair practices, including demanding excessive collateral from dealers.
According to a Korea Fair Trade Commission (FTC) probe, Doosan Bobcat Korea received real collateral based on the annual sales of products sold through dealers to secure performance of the dealers' debt. Still claiming the collateral amount was insufficient, Doosan Bobcat Korea had dealers designate a third party as a guarantor. It then required the joint guarantor to sign to assume the guarantee debt.
If consumers did not pay for products, dealers were made to shoulder the unpaid amounts. The company also set transaction terms allowing unpaid product prices to be offset against commissions the dealers receive from Doosan Bobcat Korea.
The Korea Fair Trade Commission (FTC) applied allegations of violating Article 45, Paragraph 1, Subparagraph 6 of the Monopoly Regulation and Fair Trade Act, which prohibits unfairly using a superior position in transactions, against Doosan Bobcat Korea. It also applied allegations of violating Article 52 of the same act's enforcement decree, which bans setting transaction terms that disadvantage a counterparty.
The Korea Fair Trade Commission (FTC) said, "We will continue to monitor acts in which suppliers like Doosan Bobcat Korea unfairly use their superior position in transactions to disadvantage dealers."
Meanwhile, Doosan Bobcat Korea stopped requiring collateral and joint guarantees and deleted the commission offset condition after the Korea Fair Trade Commission (FTC) investigation.