Fair Trade Commission in Sejong City. [Photo by Yoo Dae-gil]
South Korea's Fair Trade Commission (FTC) has launched an investigation into ten manufacturers and sellers of lubricants suspected of colluding to fix prices 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 to facilitate processes such as cutting and polishing metal materials.
The companies under scrutiny for alleged price-fixing include: Kwangwoo, Geukdong Oil, DH Chemical, Bumwoo Chem, Bumwoo Chemical, Bumwoo Fine Chem, Bumwoo Chemical, SHL, Korea Houghton, and Han Yu SK ETS. Together, these firms hold approximately 80% of the market share in the metalworking lubricant sector, with Korea Houghton and Bumwoo Chemical accounting for more than half of that market.
Investigators believe that these manufacturers and sellers engaged in price-fixing and bid-rigging from January 2018 to October 2024. The estimated total revenue related to these activities is around 2.2 trillion won (approximately $2 billion).
An FTC official stated, "The companies involved are suspected of having made prior agreements to set prices during periods of rising costs due to factors such as the Russia-Ukraine war and the COVID-19 pandemic. We also believe there was collusion regarding bids for supply contracts."
The FTC's investigation has revealed that the price-fixing and bid-rigging practices have caused significant harm to manufacturers and automotive companies. However, the commission has not yet disclosed specific figures regarding the extent of the damages, as it must make a final determination on the legality of the actions.
The official added, "We cannot disclose specific details, such as how much prices increased during certain periods, until the commission makes a final ruling on the violations."
The FTC plans to hold a plenary meeting later this year to determine fines for the ten companies involved in the lubricant collusion. The commission is also expected to propose corrective measures, including a price re-evaluation order, fines, and recommendations for criminal charges against relevant executives. Analysts suggest that fines could reach up to 300 billion won (approximately $300 million).
An FTC official 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 to facilitate processes such as cutting and polishing metal materials.
The companies under scrutiny for alleged price-fixing include: Kwangwoo, Geukdong Oil, DH Chemical, Bumwoo Chem, Bumwoo Chemical, Bumwoo Fine Chem, Bumwoo Chemical, SHL, Korea Houghton, and Han Yu SK ETS. Together, these firms hold approximately 80% of the market share in the metalworking lubricant sector, with Korea Houghton and Bumwoo Chemical accounting for more than half of that market.
Investigators believe that these manufacturers and sellers engaged in price-fixing and bid-rigging from January 2018 to October 2024. The estimated total revenue related to these activities is around 2.2 trillion won (approximately $2 billion).
An FTC official stated, "The companies involved are suspected of having made prior agreements to set prices during periods of rising costs due to factors such as the Russia-Ukraine war and the COVID-19 pandemic. We also believe there was collusion regarding bids for supply contracts."
The FTC's investigation has revealed that the price-fixing and bid-rigging practices have caused significant harm to manufacturers and automotive companies. However, the commission has not yet disclosed specific figures regarding the extent of the damages, as it must make a final determination on the legality of the actions.
The official added, "We cannot disclose specific details, such as how much prices increased during certain periods, until the commission makes a final ruling on the violations."
The FTC plans to hold a plenary meeting later this year to determine fines for the ten companies involved in the lubricant collusion. The commission is also expected to propose corrective measures, including a price re-evaluation order, fines, and recommendations for criminal charges against relevant executives. Analysts suggest that fines could reach up to 300 billion won (approximately $300 million).
An FTC official 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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