FTC imposes a penalty of 1.58 billion won on GS Retail’Lalavla’

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Suspicion of Violation of the Large Distribution Business Act

The drug store Lalavla operated by GS Retail. GS Retail offer

The Fair Trade Commission announced on the 22nd that it has decided to impose a penalty of 1.58 billion won along with a corrective order to GS Retail, which operates’Lalavla’, for violating the Mass Distribution Act.

According to the Fair Trade Commission, Watsons Korea returned 9.8 billion won worth of products directly purchased from 353 suppliers from January 2016 to May 2018 while operating Lalavla, a beauty and health brand.

530 million won was deducted from the delivery price in the name of the’health and beauty awards’ event to 38 suppliers, and 213 sales events were held from January 2016 to June 2017 without written agreement to 76 suppliers. I had to bear the event fee. During this period, suppliers received 280 million won in sales incentives without any agreement regarding the purpose or amount of payment.

Other than that, the company received 79 million won in the name of SNS usage fees without specifying in the contract that additional costs will be incurred when using SNS promotion means. Contracts were not issued with 13 suppliers until the start of the transaction.

Watsons Korea was merged with GS Retail in June 2017, and the Fair Trade Commission explained that Watsons Korea’s violation of the law was viewed as an act of GS Retail.

An official from the FTC said, “GS Retail owned more than 50% of Watsons Korea even before the law violation or merger of Watsons Korea,” and “GS Retail did not deny that it was not involved in the activity at all.”

Reporter Kim Hyun-joo [email protected]

[ⓒ 세계일보 & Segye.com, 무단전재 및 재배포 금지]

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