WeMakePrice, Coupang fined for abusing suppliers
The country’s leading online shopping malls WeMakePrice, Coupang and Ticket Monster faced 130 million won penalties for abusing suppliers.
According to the Fair Trade Commission (FTC), WeMakePrice agreed to purchase diverse products from 178 suppliers between 2014 and 2016.
However, it didn’t immediately offer them written contracts, as mandated by law.
The law also stipulates the large-scale retailers must pay suppliers within 40 days after consumer purchases, and if payment is delayed, pay interest to suppliers.
However, WeMakePrice failed to pay its 13,254 suppliers their due money within the 40 days, and it didn’t pay 3.8 billion won in interest either.
The social commerce company held promotional sales between January and March last year.
However, it forced 66 suppliers to shoulder the 78 million won cost incurred from the discounted prices.
In a 2016 promotion event in which customers were offered discount coupons, it also made two suppliers shoulder 1 million won in costs. There should have been writ- ten contract saying the suppliers shoulder such costs according to law, but WeMakePrice ignored this. Suppliers were forced not to sell the same item to its competitors for three months.
WeMakePrice noted in its contract the supplier must pay a 1 million won penalty if it does. The FTC pointed out this violates a law that bans retailers from forcing exclusive deals on suppliers.
For such unfair trade practices, WeMakePrice faced a 93 million won penalty.
Coupang was also found to have omitted written contract while purchasing from six suppliers. It also refunded 499 products worth 20 million won to six suppliers, without justifiable reason. Coupang was levied 21 million won penalty.
The FTC also levied a 16 million won penalty on Ticket Monster for delaying issuance of written contract and due payment. It didn’t provide 8.5 million won interest either.
The penalty comes amid increasing transaction at online shopping malls including social commerce companies.
The FTC explained that it lessened the penalty considering that the three online shopping malls corrected their wrongdoings as well as the fact that they have been suffering losses for the past few years.