Govt., ruling party seek measures to ensure fair transactions between big and small firms

Published : Dec 21, 2017 - 10:21 Updated : Dec 21, 2017 - 10:21

The government and ruling Democratic Party agreed Thursday to seek a package of measures to ensure fair transactions among large and smaller companies, including bolstering negotiating power for subcontractors.

During their policy consultation meeting, they stressed the need to address "imbalances in power" among local firms, citing them as the root cause of unfair business practices that have gnawed at subcontractors' competitiveness.

The ruling bloc has recently been striving to better protect small and medium-sized enterprises from rampant irregular business deals with larger firms, some of which have made them vulnerable to technology extortions.

"I believe the fundamental reason why unfair transactions continue to exist is power imbalances between big and small firms," Kim Sang-jo, the chairman of the Fair Trade Commission, said during the meeting at the National Assembly.

Kim Sang-jo (2nd from L), the chairman of the Fair Trade Commission, speaks during a party-government policy consultation meeting at the National Assembly in Seoul on Dec. 21, 2017. (Yonhap)

The measures under consideration include scrapping the FTC's exclusive right to file complaints about technology thefts and allowing subcontractors to directly refer their fair trade cases to the investigation authorities.

The two sides also agreed to explore ways to strengthen subcontractors' hands in all processes of business deals with larger firms, including the negotiation of contract terms and the enforcement of the deals.

Also among the measures were those to encourage big companies to take their own steps to shun irregular transactions and to conduct regular biennial inspections of all business deals in the manufacturing sector and make their results public.

Regarding the firms that repeatedly contravene fair trade rules, the ruling bloc agreed to the idea of the FTC directly handling their violations rather than referring the case to a conflict settlement institution.

"Our party will actively support the fair trade measures that need legislation," said Kim Tae-nyeon, the ruling party's policy chief. "The party and government will do our best to establish a fair market order and ensure cooperation among conglomerates and SMEs." (Yonhap)