Seoul driving schools fined for collusion

The Fair Trade Commission announced yesterday it will impose a total of 1.8 billion won ($1.6 million) in fines on seven driving schools in Seoul for colluding to raise the price of class tuition.

According to the antitrust watchdog, the collusion took place after the national government’s decision to simplify the driver’s license test requirements last June. The policy change cut mandatory class hours, resulting in lost profits for driver education schools.

“[These driving schools] have acted against the government’s decision to take some of the financial burden off potential drivers by simplifying the test procedure,” said Jo Hong-sun, director of the FTC’s Cartel Investigation Division.

The FTC said Nowon, Nokcheon, Samil, Seoul, Seongsan, Yangjae and Changdong driving schools and the National Federation of Driving Schools’ Seoul branch have each been fined.

Seongsan Driving School was slapped with the largest amount - 407 million won. Nowon, Yangjae and Seoul followed with 363 million won, 247 million won and 225 million won in fines, respectively.

These schools inflated the tuition fee by about 88.6 percent on average after the government cut minimum training hours at driving schools to eight hours from 25 since June 10.

The representatives of each school and the federation’s Seoul branch met to set a price tag for the basic training package at 470,000 won in a restaurant in Seocho, southern Seoul, on May 16, 2011, a little less than a month before the launch of the new regulation, the FTC said.

By Lee Sun-min [summerlee@joongang.co.kr]