GS Retail, the operator of GS Home Shopping, has lost its final appeal against a fine imposed by the Fair Trade Commission (FTC) for unfairly burdening suppliers with promotional costs.
According to legal sources on August 23, the Supreme Court's third division, led by Justice Noh Kyung-pil, upheld the lower court's ruling that dismissed GS Retail's request to annul the FTC's corrective orders.
In January 2022, the FTC imposed a fine of 1.027 billion won (approximately $10 million) on GS Retail for violations of the Large-Scale Distribution Business Act, including the improper transfer of promotional costs, the unfair use of supplier employees, and unjustified returns.
The FTC found that from January 2017 to November 2019, GS Retail conducted promotional events, including giveaways, through 129 broadcasts involving 26 suppliers, forcing them to cover the costs without any written agreement.
Additionally, from April 2017 to October 2019, GS Retail returned 76,639 items from eight suppliers without valid reasons.
Furthermore, between January 2018 and June 2020, GS Retail used 562 individuals, including supplier employees, as guests and demonstration models in 505 broadcasts without written agreements regarding their employment conditions.
GS Retail filed a lawsuit in March 2022 to contest the FTC's ruling, but the Seoul High Court ruled against the company in June of the following year.
The court rejected GS Retail's argument regarding the return claims, stating that the return requests submitted by suppliers constituted objective evidence of voluntary returns, thus validating the FTC's findings.
* This article has been translated by AI.
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