FTC fines Jeju rental car group for fixing prices

The Fair Trade Commission yesterday imposed a penalty of 73 million won ($71,095) on the Jeju Rent-a-car Association and reported the group to the prosecutors’ office for colluding to raise rental fees from 2008-10.

The seven accused companies are members of the association’s rental fee deliberation commission.

The FTC says the seven companies, which have a 30 percent share of the market, violated two laws.

The 38 association members represent a combined 70 percent share of the Jeju car rental market.

The FTC says the seven largest members illegally pressured other association members to follow prices set by the commission, and forced them to follow the commission’s lead in raising fees.

The Jeju provincial government’s transportation law authorized the association to form a deliberation commission made up of the seven largest operators to discuss and report each association member’s rental prices and terms to the provincial government every year.

In 2010, the law prohibited the association from creating discounts and imposing extra charges, which caused them to raise the overall price.

Commission members asked other association members who submitted to lower prices to adhere to their rates.

The commission fixed rental fees for newer car models, which not all members chose to purchase, and forced the standards on the rest of the association members.

After numerous consumer requests, the province amended the law to seasonal price fluctuations starting in 2011.

Now, companies can freely impose discounts and premium charges.

In Jeju, 63 auto rental companies were operating in 2010, out of 757 service providers nationwide.

BY kim ji-yoon [jiyoon.kim@joongang.co.kr]