LF Network fined 400 million won for forcing costs onto suppliers

South Korea's Fair Trade Commission has imposed a fine of approximately 418 million won (about $300,000 USD) on LF Network, the operator of the LF Square shopping mall. The company is being penalized for unfairly shifting promotional expenses onto its suppliers and for demanding sensitive business information from competing retailers.

According to the commission's investigation, LF Network engaged in 29 joint promotional events with 174 suppliers and store tenants between December 2022 and December 2024. In these instances, the company failed to specify the products or duration of the promotions and did not secure signed agreements from the suppliers. Consequently, suppliers were made to bear a total of 58.61 million won in promotional costs, violating the Large-Scale Distribution Business Act which requires written agreements detailing specific items and periods for such cost-sharing.

Furthermore, LF Network allegedly requested sales figures and commission rates from 47 suppliers for their operations in rival department stores and shopping malls from July 2022 to October 2025. This practice is prohibited under the same act, as it could be used for unfair trade practices, including coercion into promotional participation or manipulation of fees. The law aims to prevent the misuse of such competitive intelligence.

The Fair Trade Commission has issued corrective orders and the substantial fine to LF Network, aiming to prevent future violations and ensure fair practices within the retail sector. The decision underscores the commission's commitment to protecting smaller suppliers from potentially exploitative demands by larger retail operators.