Hyundai Heavy Industries was fined KRW 970m ($810,000) by the Korea Fair Trade Commission (KFTC) for unfair trade practices with one of its subcontractors.
The South Korean antitrust watchdog said the shipbuilder exploited technology data on piston manufacturing controlled by its subcontractor, Samyoung Machinery, in an effort to diversify its suppliers and save costs, according to The Korea Times.
The fine was reported to be the largest that the KFTC has issued for misuse of technologies from other companies.
Samyoung was the exclusive pistons supplier to Seoul-listed HHI for the HiMSEN diesel engine from 2005.
But a decade later, the shipyard group gave an order to another unnamed piston manufacturer to build the equipment. However, the quality of the product was not satisfactory.
HHI was reported to have pressured Samyoung to disclose the piston manufacturing information, such as assembly instructions and other standard production procedures.
The KFTC found HHI to have threatened Samyoung that it would cancel the piston manufacturing contract if it refused to pass over the production instructions.
The shipbuilder then passed on the technology and information to the other piston maker, the KFTC alleged.
HHI, which did not immediately respond to TradeWinds' request for comment for this story, then demanded Samyoung reduce its prices by 11% when the Samyoung competitor managed to produce “satisfactory pistons”, the KFTC alleged.
Samyoung’s sales reportedly fell by 57% during the three months after the price cut and saw its operating profit plunge seven-fold.
The KFTC is a ministerial-level body under the authority of South Korea's prime minister and also functions as a quasi-judicial body. It formulates and administers competition policies and handles antitrust cases.
