Hyosung and Hyosung Heavy Industries, which had been accused of unfairly demanding technical data from subcontractors, avoided sanctions by the Korea Fair Trade Commission after submitting a self-remedy plan in the 3 billion won range. This is the first time a voluntary corrective plan has been accepted in the area of technology misappropriation.

The Korea Fair Trade Commission announced on the 4th that it had finalized a consent decision regarding violations of the Subcontracting Act by Hyosung and Hyosung Heavy Industries. A consent decision is a system that ends the sanction process, following deliberation, when a company suspected of violating the law submits a voluntary corrective plan.

From 2014 to 2023, for about nine years, while commissioning subcontractors to manufacture components such as power equipment, Hyosung and Hyosung Heavy Industries are alleged to have requested technical data prohibited under the Subcontracting Act.

After the Korea Fair Trade Commission sent an examination report setting out its view on sanctions, Hyosung applied for a consent decision, and the procedure began in May last year. Although consent decisions are generally not applied in cases involving serious legal violations, in this instance no actual damage to subcontractors occurred, and the main affected firms asked for practical support measures rather than Korea Fair Trade Commission sanctions, which was reflected.

Hyosung decided to provide 3.4296 billion won in funding to subcontractors. It will first spend 1.1296 billion won on support for subcontractor technology development·industry-academia cooperation, and will invest a total of 2.3 billion won in improving working conditions, such as purchasing equipment and installing portable air conditioners.

In addition, it will use technical data received from subcontractors only for purposes of prior approval or post-inspection, and will cease acts such as drafting drawings identical to the technical data without just cause. Hyosung will improve its management system for handling technical data and report the results of its internal audits to the Korea Fair Trade Commission.

Since the consent decision system under the Subcontracting Act was introduced in July 2022, this is the first time it has been applied to allegations of technology misappropriation.

Gu Seong-Rim, head of the Technology Misappropriation Investigation Division at the Korea Fair Trade Commission, said, “Considering that the technical data were not actually used, we viewed a consent decision that can deliver tangible benefits to subcontractors as effective,” adding, “We prepared support measures in an amount larger than the expected surcharge.”