The Korea Fair Trade Commission imposed a penalty surcharge of 5 billion won on Kyungdong Navien and ordered corrective measures on suspicion of unauthorized use of a subcontractor's technical data.
According to a Korea Fair Trade Commission (FTC) probe on the 30th, in Mar. 2024 Kyungdong Navien used drawings from a subcontractor that supplies heating equipment parts to create its own drawings. There was no consultation with the subcontractor in the process. The following month, it provided the drawings to a competitor of the subcontractor whose materials had been misappropriated.
In response, the Korea Fair Trade Commission (FTC) applied a suspected violation of Article 12-3(4) of the Fair Transactions in Subcontracting Act, which prohibits a prime contractor from using a subcontractor's technical data and providing it to a third party. Kyungdong Navien was also required under the Fair Transactions in Subcontracting Act to deliver a statutory document containing the purpose and the rights attribution relationship when requesting technical data from a subcontractor, but did not do so.
An official at the Korea Fair Trade Commission (FTC) said, "In the process of dual-sourcing partner companies to cut purchase unit costs, it went beyond merely creating similar materials by unauthorized use of a subcontractor's technical data," adding, "It is meaningful in that we strictly sanctioned the unfair use of technical data that was even provided to a competing business."