The image titled “Government Sejong Building, Fair Trade Commission Building” is accompanied by an article reporting that furniture manufacturers and retailers like Enex, Hanssem, and Hyundai Livart, which engaged in bid rigging for built-in furniture for apartments, are facing fines worth over 20 billion KRW.
The Fair Trade Commission announced on the 29th that it imposed a total fine of 25 billion KRW on 48 furniture manufacturing and sales companies for colluding in the bidding process for built-in and system furniture orders from apartment construction companies. The fines for each company are 5.844 billion KRW for Enex, 3.797 billion KRW for Hanssem, and 3.749 billion KRW for Hyundai Livart.
Built-in custom furniture refers to items like kitchen sinks and wardrobes that are installed in an integrated manner in newly constructed apartments and officetels. System furniture refers to furniture used in areas like apartment dressing rooms and pantries, made by placing wooden shelves on aluminum pillars.
According to the investigation by the Fair Trade Commission, from 2013 to 2022, furniture companies colluded on a total of 333 bids for built-in and system furniture ordered by 67 construction companies. They agreed in advance on the winning bidder or bid price.
The firms executed these collusions by informing a decoy bidder of the agreed price during meetings or phone calls, which the decoy would then bid. They also used methods like drawing lots to determine the order of winning bids. The total revenue related to these fraudulent bids amounted to 644.8 billion KRW.
Since last year, the Fair Trade Commission imposed fines totaling 142.7 billion KRW on 63 furniture companies related to bid rigging for built-in and system furniture. The total revenue from collusion was 3.6354 trillion KRW. To date, fines for bid rigging in furniture tenders have been the largest for Hanssem (27.6 billion KRW), followed by Enex (23.8 billion KRW) and Hyundai Livart (23.3 billion KRW).
The Fair Trade Commission stated, “It is significant that we uncovered and sanctioned the long-standing, widespread collusion among major domestic furniture companies,” and expressed the expectation that this could help eradicate the habitual bid rigging behavior in the furniture industry and restore fair competition.