South Korea's antitrust agency has fined 10 local petrochemical companies for rigging the prices of polypropylene (PP) and high-density polyethylene (HDPE). The amount of the fine totals to 105.1 billion won (US$111.61 million). SK Corp., LG Chemicals and Samsung Petrochemicals are also included in these ten names.
The Fair Trade Commission (FTC) has discovered that the companies have held monthly price-fixing meetings since 1994 to set standard sales prices and "monitored" each other to make sure nobody undercut them. The FTC estimates the price-fixing cost consumers an estimated W1.56 trillion due to steady increases in prices of vinyl and plastic products.
Price fixing is a serious offense globally, as it shakes the very foundations of a free market economy. The U.S. government levies a fine that is double the amount of damage caused by price fixing. If the petrochemical price-fixing scheme had been uncovered in the U.S., the companies involved would have been slapped with a maximum W3 trillion fine and most of the manufacturers would have had to close down.
A lack of awareness and regulations about price fixing exists in Korea. Such practices are believed to have been in place for years, and the government at times supported price fixing to avoid damaging effects from overheated competition. The government's allotment of sales quotas to prevent oversupply after facilities expansions during the early 1990s is believed to have been the cause of the petrochemical price-fixing scheme.
21-Feb-07 
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