Jeju gas stations fined $2 billion for price-fixing collusion

The Korea Fair Trade Commission (KFTC) has imposed a total of 2.05 billion won in fines on the Jeju Gas Station Association, Jeju Agricultural Cooperative (Jeju Nonghyup), and Seogwipo Agricultural Cooperative (Seogwipo Nonghyup) for colluding to fix fuel prices.

According to the KFTC's investigation, the Jeju Gas Station Association, which represents 116 gas stations in the region, received daily prices for gasoline, diesel, and kerosene from Jeju Nonghyup and Seogwipo Nonghyup. The association then used these prices as benchmarks, communicating them to its members via KakaoTalk and text messages to ensure compliance.

Jeju Nonghyup and Seogwipo Nonghyup, known for operating more competitively priced "value gas stations," allegedly provided their upcoming fuel prices to the association before they were publicly listed on the Opinet system. The KFTC believes this allowed other gas station operators to align their prices accordingly. The cooperatives had an incentive to share this information to prevent price competition from their end.

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The Jeju Gas Station Association, Jeju Nonghyup, and Seogwipo Nonghyup restricted price competition for petroleum products by fixing selling prices or actively participating in such acts.

The KFTC highlighted that the Jeju Gas Station Association was aware its actions violated fair trade laws. During periods when the KFTC was investigating similar industries, the association reportedly used phone calls or in-person meetings instead of group chats to communicate benchmark prices, and even asked members to delete price notifications to prevent leaks.

"The Jeju Gas Station Association, Jeju Nonghyup, and Seogwipo Nonghyup restricted price competition for petroleum products by fixing selling prices or actively participating in such acts," the KFTC stated. "Consequently, they harmed the benefits consumers would have received from autonomous competition among gas station operators, indicating a serious violation."

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Consequently, they harmed the benefits consumers would have received from autonomous competition among gas station operators, indicating a serious violation.