Revised enforcement ordinances regulating unfair business practices were approved at a Cabinet meeting on Monday, which will better protect franchisers and subcontractors, the country's corporate watchdog said.
Under the revised regulations, punitive damages of up to three times the actual losses incurred by illegal business practices such as unfair payments and returns, as well as cutting back supplied goods, will be imposed. The measures will take effect later this month, the Fair Trade Commission said.
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(Yonhap) |
Such unfair business practices have been frequently occurring between large shopping mall operators and smaller partners.
In particular, the South Korean distribution industry is currently led by huge retailers, department stores and discount outlets that lease their spaces to small businesses. Big-name retail giants, such as Lotte, Shinsegae and Hyundai Department Store, take up the bulk of the market share and wield great influence over the entire industry.
Also, franchisers are required to pay damages stemming from any wrongful actions they have taken or other irregularities to their franchises, with such revised rules set to take effect early next year, according to the FTC. (Yonhap)
