Overlooking bad behavior
The Ministry of Science, ICT, and Future Planning, which oversees the broadcasting industry, renewed the business licenses for three TV home-shopping channels that had been fined for unfair and predatory business practices by the state anti-trust agency. Hyundai and NS Home Shopping received extensions for a full five years, Lotte Home Shopping had its license tenure scaled down to three.
The slap on the wrist from the broadcasting supervisory authority is appalling considering the list of corruption cases the Fair Trade Commission (FTC) uncovered among home-shopping channels in a recent probe. It even warned it would go as far as cancelling business licenses, preventing the companies from going on air, but the results were pitiful compared to the tough rhetoric.
A handful of employees at Lotte Home Shopping, from its chief executive to ordinary staff, were indicted in April 2014 for regularly pocketing money from suppliers. Many called for strong punitive action to force the company to learn its lesson, while the prime minister at the time commanded the government to prove that it would stop illegal business practices in the TV shopping industry. So the FTC embarked on an extensive investigation and slapped 14.37 billion won ($12.9 million) in fines on six TV home-shopping channels in March ahead of the business license review.
The antitrust watchdog said it will hand over its findings to the ICT ministry for reference in its review. Many expected that Lotte, at least, could be ousted from business after its preposterously corrupt ways were exposed. It is incomprehensible how Lotte and two other companies could have managed to escape without punishment. How much more will small and midsize suppliers and consumers have to suffer for these channels to pay for their wrongs?
The TV home-shopping industry has been in service for two decades now. It rakes in 9 trillion won in revenue annually and is considered the most lucrative retail channel. Yet it charges small and midsize companies more than large companies on their suppliers. It also frequently thumbs its nose at consumers because the government has been so soft. The ICT ministry said it was an inevitable choice in order to minimize the social impact from ousting a TV home-shopping channel. But such lenient supervision is why home-shopping channels continue on with their bad habits. JoongAng Ilbo, May 4, Page 26