In a significant crackdown, the Fair Trade Commission has uncovered collusion among school uniform dealers in Yongin, Ulsan, and Yeongcheon, Gyeongbuk, who prearranged bids for school uniform contracts for middle and high schools.
On October 13, the Fair Trade Commission announced that it would impose corrective orders and a total fine of 1.02 billion won ($1 million) on 10 school uniform dealers across three regions for colluding in 51 bidding instances conducted by 19 schools. The companies involved include local dealers such as Smart School Uniforms, Ivy Club, Elite School Uniforms, Senten School Uniforms, and School Looks.
The school-led purchasing system allows schools to select suppliers through bidding, providing uniforms to students in bulk. Bids are conducted within price limits set by local education authorities. However, the dealers caught in this investigation had agreed on winning bidders and bid prices in advance through in-person meetings, text messages, and KakaoTalk.
The highest fines were levied against four dealers in Yongin's Cheoin District. Smart School Uniforms, Ivy Club, Elite School Uniforms, and Senten School Uniforms colluded in 15 bidding instances for eight schools from September 2022 to October 2023.
Smart School Uniforms in Yongin requested other dealers to participate in sham bids to avoid failures in 2022. Starting in 2023, they sent text messages listing schools they hoped to win contracts with, seeking cooperation from competitors. In some instances, they even agreed on prices beforehand, achieving a winning rate of 98.29% compared to the expected price.
The Fair Trade Commission imposed a fine of 720 million won on these four dealers, with Smart School Uniforms facing a fine of 390 million won and Ivy Club 180 million won.
In Yongin's Giheung District, Smart School Uniforms and School Looks colluded on bid prices for middle school uniforms in August 2022. Smart School Uniforms requested participation in sham bids to prevent failures from solo bids. The Fair Trade Commission issued a corrective order without a fine, considering the incident involved only one bidding instance.
In Ulsan's Nam District, Ivy Club and Smart School Uniforms agreed on prices for bids at six schools from 2022 to 2024. Representatives from the dealers, who had previously worked together, determined the winning bidders, leading to a fine of 9 million won.
In Gyeongbuk's Yeongcheon, a longer-term collusion was discovered. Smart School Uniforms and Elite School Uniforms colluded on prices for 29 bidding instances at four schools from October 2018 to December 2022. They operated a 'winning order system' where they alternated winning bids by school, which ultimately led to their detection. The Fair Trade Commission imposed a fine of 210 million won on these two companies.
While the methods of collusion varied by region, they undermined the school-led purchasing system designed to lower uniform supply prices through competition. In some areas, the practice of dividing supply rights by school persisted for years, making effective price competition difficult.
The Fair Trade Commission stated, "We are conducting focused monitoring for signs of collusion among school uniform dealers by collaborating with 16 local education authorities and linking bidding information to our collusion detection system. Since collusion in school uniform bidding increases household burdens, we will actively investigate and impose sanctions for any legal violations in the future."
* This article has been translated by AI.
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