Fair Trade Commission in Sejong City, South Korea. [Photo by Yoo Dae-gil]
South Korea's Fair Trade Commission (FTC) has initiated an investigation into ten manufacturers and sellers of lubricants accused of price collusion during periods of rising oil prices, including the ongoing Russia-Ukraine war.
On June 23, the FTC announced that it had sent a report detailing the findings of its investigation, including evidence of illegal activities and recommendations for action, to the companies involved in the lubricant collusion case. The investigation focuses on industrial lubricants used for processes such as cutting and polishing metal materials.
The companies under scrutiny for alleged price fixing include: △Kwangwoo △Geukdong Oil △DH Chemical △Beomwoo Chem △Beomwoo Chemical △Beomwoo Fine Chem △Beomwoo Chemical △SHL △Korea Houghton △Hanyu SK ETS. Together, these firms hold approximately 80% of the market share in the metalworking lubricant sector, with Korea Houghton and Beomwoo Chemical alone accounting for more than half of that market.
Investigators believe that these manufacturers and sellers engaged in collusion regarding lubricant supply prices and bid rigging from January 2018 to October 2024. The estimated related revenue from these activities is around 2.2 trillion won (approximately $2 billion).
An FTC official stated, "The accused companies reportedly made decisions and agreements through prior consultations during periods of rising costs due to factors such as the Russia-Ukraine war and COVID-19. We have also identified instances of bid rigging affecting the bidding entities involved."
The FTC's investigation has revealed that the price fixing and bid rigging have caused significant harm to manufacturers and automotive companies. However, the commission has not yet disclosed the specific scale of the damages, as it must make a final determination on the legality of the actions.
The official added, "Details such as how much prices increased during specific periods cannot be disclosed at this stage, as the commission needs to finalize its determination on legal violations."
The FTC plans to hold a plenary meeting by the end of the year to decide on fines for the ten companies involved in the lubricant collusion. The commission has also proposed corrective measures, including a price recalibration order, the imposition of fines, and the filing of complaints against relevant executives. Analysts suggest that fines could reach up to 300 billion won (approximately $300 million).
An FTC representative remarked, "This case appears to involve very serious violations. If deemed a significant violation, fines could be imposed in the range of 15% to 20%."
On June 23, the FTC announced that it had sent a report detailing the findings of its investigation, including evidence of illegal activities and recommendations for action, to the companies involved in the lubricant collusion case. The investigation focuses on industrial lubricants used for processes such as cutting and polishing metal materials.
The companies under scrutiny for alleged price fixing include: △Kwangwoo △Geukdong Oil △DH Chemical △Beomwoo Chem △Beomwoo Chemical △Beomwoo Fine Chem △Beomwoo Chemical △SHL △Korea Houghton △Hanyu SK ETS. Together, these firms hold approximately 80% of the market share in the metalworking lubricant sector, with Korea Houghton and Beomwoo Chemical alone accounting for more than half of that market.
Investigators believe that these manufacturers and sellers engaged in collusion regarding lubricant supply prices and bid rigging from January 2018 to October 2024. The estimated related revenue from these activities is around 2.2 trillion won (approximately $2 billion).
An FTC official stated, "The accused companies reportedly made decisions and agreements through prior consultations during periods of rising costs due to factors such as the Russia-Ukraine war and COVID-19. We have also identified instances of bid rigging affecting the bidding entities involved."
The FTC's investigation has revealed that the price fixing and bid rigging have caused significant harm to manufacturers and automotive companies. However, the commission has not yet disclosed the specific scale of the damages, as it must make a final determination on the legality of the actions.
The official added, "Details such as how much prices increased during specific periods cannot be disclosed at this stage, as the commission needs to finalize its determination on legal violations."
The FTC plans to hold a plenary meeting by the end of the year to decide on fines for the ten companies involved in the lubricant collusion. The commission has also proposed corrective measures, including a price recalibration order, the imposition of fines, and the filing of complaints against relevant executives. Analysts suggest that fines could reach up to 300 billion won (approximately $300 million).
An FTC representative remarked, "This case appears to involve very serious violations. If deemed a significant violation, fines could be imposed in the range of 15% to 20%."
* This article has been translated by AI.
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