FTC to help buyers fight price-fixingThe Fair Trade Commission will help consumers take on Samsung Electronics and LG Electronics to recoup any losses caused by price-fixing of the two electronics giants’ major home appliance products, it said yesterday.
This is first time the antitrust watchdog has announced it will side with consumers in such cases.
“We plan to financially support the so-called Green Consumer Network to gather people who suffered losses from the price-rigging of Samsung and LG to file a class-action lawsuit against the companies,” an FTC official told Yonhap News Agency yesterday.
The news comes after the FTC on Jan. 12 fined the two companies a combined 44.64 billion won ($38.5 million) for fixing the prices of key home appliance products. Samsung and LG were fined 25.81 billion won and 18.83 billion won, respectively, for fixing the prices of washing machines, flatscreen TVs and laptops.
The two dominant players in these sectors enjoyed a combined share of 90 percent in washing machines, 99 percent in flatscreen TVs and 58 percent of the market for laptops as of 2010.
“Their price-rigging hurt many consumers by driving up the prices of [these products] more than other competing products,” the FTC said in a release.
The Green Consumer Network, a civic group for consumer rights, has been amassing people for the suit.
The FTC has earmarked 100 million won for such initiatives, as it sees large holes in the current regulations, insiders say. Although companies can be fined for their wrongdoing, consumers have few ways of retrieving their losses and being rightfully compensated.
Moreover, the FTC has been intensifying its crackdown on price-fixing and other anti-competitive activities in recent months. This is part of a broader move to tamp down price hikes on daily goods amid the government’s ongoing battle to curb inflation.
Korea’s consumer price index rose 4 percent in 2011 after spiking in the last two months of the year. It hit the upper ceiling of the Bank of Korea’s target band of between 2 percent and 4 percent. Seoul and the central bank have vowed to keep consumer prices locked at 3.3 percent this year.
The Green Consumer Network said it will extend its deadline for those wishing to join the lawsuit from Feb. 14 to the end of next month. Interested parties can submit receipts, a copy of their identification and an attorney’s warrant. The amount of compensation will be decided later, but it is expected to include at least 500,000 won for psychological damages.
By Kim Hyung-eun [firstname.lastname@example.org]
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