[Alpha Biz= Paul Lee] Hyundai Kefico, an affiliate of Hyundai Motor Group, has been fined by the Korea Fair Trade Commission (KFTC) for violating subcontracting laws by providing a subcontractor’s technical data to a competitor.



On July 23, the KFTC announced that it had imposed a corrective order and a fine of KRW 474 million (approx. USD 340,000) on Hyundai Kefico. The automotive parts manufacturer was found to have transferred five pieces of technical data related to parts development from one of its subcontractors to a competing company in March 2023.



In a separate case, between May 2018 and July 2021, Hyundai Kefico was also found to have obtained four mold design documents from another subcontractor without proper justification.



The KFTC deemed these actions as clear violations of the Subcontracting Act, emphasizing that providing technical data to third parties without prior consent and requesting documents beyond what is strictly necessary are both illegal. However, due to the relatively minor degree of intent and damage, the commission opted not to pursue criminal prosecution.



Hyundai Kefico claimed that the subcontractor had forfeited its overseas business opportunity and that the data was used merely for reference, downplaying the severity of the violation.



In addition, the KFTC found 24 cases where Hyundai Kefico failed to provide written documentation outlining the purpose for requesting technical materials, and 6 cases where no non-disclosure agreements (NDAs) were signed. These were also subject to corrective measures.



Furthermore, the company received a warning for including unfair clauses in 19 mold production contracts with three subcontractors, which unilaterally imposed confidentiality obligations.



This is not Hyundai Kefico’s first infraction. In October last year, the KFTC imposed a separate fine of KRW 54 million for issuing contracts without specified delivery dates and for failing to pay delayed interest on time.



Following these findings, the Ministry of SMEs and Startups formally requested the KFTC earlier this month to refer Hyundai Kefico for criminal prosecution, citing repeated unfair practices.

 

 

 

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