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| GS Retail/CEO, Huh Yeon-soo [Photo = GS Retail Homepage] |
GS Retail, which operates GS Home Shopping, will be fined 1.5 billion won by allowing suppliers to share sales and marketing expenses without prior agreements.
The Fair Trade Commission announced on the 8th that it will impose a corrective order (an order to suspend or ban acts) and a fine of 1.582 billion won on GS Retail for violating the Large Retail Business Act and transferring promotional costs. GS Home Shopping was merged with GS Retail in July 2021.
According to the Fair Trade Commission, GS Retail sold its supplier's products through home shopping broadcasts from 2017 to November last year, offering ARS discounts and mobile application (app) discounts under the same conditions as the broadcast time for 30 minutes before and after the broadcast. Only the broadcasting time was stated in the broadcasting conditions agreement and the promotion agreement, but the promotional event was arbitrarily extended.
The Large Distribution Business Act stipulates that large retailers such as TV home shopping and department stores should not be required to bear the cost of the event if they have not delivered a written document stating the period, name, item, and required cost of the promotional event to the supplier in advance.
GS Retail sold 25,281 products on a mixed commission basis from 2017 to November last year, and 9,313 cases were passed on to suppliers while arbitrarily conducting promotional events before and after the broadcast, the Fair Trade Commission said. Through this, the cost passed on to the supplier was 1.9785 billion won.
In a related development, GS Retail claimed that it verbally agreed in advance with the supplier on promotional events before and after the broadcast, and that home shopping paid 90% of the promotion after the broadcast. When order calls flock at the end of the broadcast, payments are often made after the broadcast, and in this case, there is no choice but to provide gifts.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
