Olive Young accused of threatening suppliers for working with competition

Industry

Olive Young accused of threatening suppliers for working with competition

Published: 04 Sep. 2024, 17:30

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Olive Young's store in Myeong-dong, central Seoul [JOONGANG ILBO]

A local cosmetics seller has filed a complaint with the Fair Trade Commission (FTC) alleging that retailer Olive Young exploited its position as a dominant marketplace to prevent it from working with another platform.

A supplier listed on both Musinsa — a major fashion and beauty marketplace — and Olive Young said it received a call from the latter asking them not to participate in Musinsa’s September beauty festival, the JoongAng Ilbo, an affiliate of the Korea JoongAng Daily, reported Wednesday.

The seller reportedly claimed that an Olive Young employee said the marketplace would pull their products over participation in Musinsa's event, leading the seller to ultimately give up on the beauty festival.

Other merchants also reported facing a similar situation.

The FTC confirmed that a complaint had been registered and that the agency was reviewing it to determine if it warranted an investigation.

A spokesperson for Olive Young told the Korea JoongAng Daily that “nothing has been confirmed about whether such conversations happened.”

The FTC fined Olive Young 1.89 billion won ($1.43 million) in December of last year for unfair practices in dealing with suppliers, including actions identical to Wednesday’s complaint. The health and beauty store was accused of coercing suppliers to abstain from sales promotion events organized by rival marketplaces, in violation of the country’s large-scale retail business act.

The retailer had at the time accepted the punishment, and said it was improving the system for internal operations and vowed to transparently share all processes with its partners.

Olive Young holds an almost 80 percent market share in the drugstore industry. Its share in the online cosmetics market amounts to around 10 percent.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]