Domestic Law Firstly Punished International Cartel Collusion

Korea Fair Trade Commission (KFTC) levied monetary penalty along with correction order on an international cartel of U.S. and Japanese companies, which conspired to sell refining material to Korea at higher price.

KFTC applied the competition law to foreign companies for the first time in Asia since KFTC launched in 1981.

KFTC announced that it found out that 6 graphite electrode pole companies of U.S., Japan and Germany collusively raised the exporting price by 49 percent during 1992 to 1998 causing 183.7 billion won worth of damage to domestic steel circles, and levied total 8 million and 532,000 dollars of fine along with correction order.

The exposed companies are 6 companies of △ UCAR International(U.S.),△SGL Carbon Aktiengesellschaft(Germany),△Showa Denko K.K.,△Tokai Carbon, △Nippon Carbon, △SEC Corporation(Japan), which have been fined of 300 million dollars or jailed by the governments of competing countries like EU, U.S. and Canada in late 1990s.

KFTC added that the companies, which supply 80 percent of world production, conferred with each other at the hotel S in London, England in May 1992, and used a collusive tactic that one company raise the price and the others raise the price together using nick names to conceal the cartel.

Graphite electrode is a column like material used for generating super heat in smelting iron cores, and INI Steel and Dongkuk Steel use it for electric furnace. Korea has imported 91 percent of required volume amounting 553 million dollars at the price of 3,356 dollars per a ton during 1992 to 1998, and the rest 9 percent from the foreign countries not joining the cartel at 2,407 dollars per a ton.

Rae-Jeong Park ecopark@donga.com