The Fair Trade Commission announced today (the 16th) that it has decided to issue a corrective order and impose a fine of 211 million KRW on DB Inc. for delaying the issuance of contracts to subcontractors.
DB Inc. (hereafter referred to as DB) is a subsidiary of the DB Group, providing integrated IT services to businesses such as financial institutions.
According to the Fair Trade Commission’s investigation, DB had delayed issuing contracts containing information about subcontract payments for over two years, from January 2022 onwards, while handling 652 service contracts with 394 subcontractors.
When entrusting a task to a subcontractor, the primary contractor must issue a contract before the start of the service. This is to prevent unnecessary disputes between parties by basing subcontract transactions on accurately detailed contracts.
However, DB issued contracts nearly two months after the start of services in some cases. The Fair Trade Commission explained that 85% of the subcontractors working with DB suffered from this issue.
Additionally, DB delayed notifying inspection results for over 10 days even after receiving the products and made payments for subcontract fees over 60 days late without paying any late interest.
The Fair Trade Commission stated, “This is a case where the habitual delayed issuance of contracts in the software and IT service industries was identified and sanctioned. We plan to continuously focus our investigative capabilities on new industrial sectors such as information and communication to establish a fair subcontract transaction order.”
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