Philips fined for preventing price cuts despite S. Korea-EU FTA

South Korea's antitrust watchdog said Sunday it has imposed 1.51 billion won (US$1.3 million) in fines on the Korean unit of Dutch electronics giant Philips for preventing South Korea's online shopping malls from offering discount prices.

The move by the Fair Trade Commission (FTC) is the first punitive action against a foreign company for blocking price cuts following the implementation of a free trade deal between South Korea and the European Union.

South Korea has eliminated an 8 percent tariff on small electronics goods made in the EU since the trade deal went into effect in July last year.

The Korean unit of Philips set prices of goods for local online shopping malls and banned them from selling goods at prices lower than its recommended ones between March 2011 and May 2012, the commission said in a press release posted on its Web site.

The commission also said the Korean unit of Philips banned the sales of its electronic shavers, electronic toothbrushes and three other products on the online shopping malls during that period.

Philips acquired the No. 1 market share in electronic shavers, electronic toothbrushes, electronic irons, coffee makers and other small household appliances last year, according to the commission.

The FTC said the Philips' move amounted to price fixing, noting the commission's decision is expected to lead to lower prices of small household appliances, thus easing the burden on consumers.

A Philips spokesman was not immediately available for comment on Sunday. (Yonhap News)