South Korea probes 7 medical firms for bid-rigging in hospital tenders

South Korea's Fair Trade Commission (FTC) has launched a formal investigation into seven major medical testing companies suspected of colluding in bids for specimen testing services commissioned by public hospitals. The investigation marks a significant step in addressing alleged anti-competitive practices within the healthcare sector.

The companies under scrutiny include GC Medical Foundation, GC Cell, Samgwang Medical Foundation, Samgwang Labtree, Seoul Clinical Laboratories, Seegene Medical Foundation, and I-Won Medical Foundation. The FTC's investigation division has sent a report detailing its findings and proposed sanctions to these firms, initiating the formal review process.

Investigators allege that these seven companies systematically engaged in bid-rigging and volume agreements for specimen testing service tenders issued by national and public hospitals. This alleged collusion spanned from January 2012 to October 2024, covering 706 tenders with a total value of approximately 294 billion won (about $210 million USD). Specimen testing involves analyzing samples like blood and tissue for viruses or abnormalities, services often outsourced by hospitals to specialized institutions.

The FTC views these alleged actions as serious violations. The commission is considering imposing corrective orders, substantial fines, and recommending criminal charges against the companies and their executives. Based on the maximum penalty rate of 20% of the contract value, the potential fines could reach up to 58.8 billion won. The final decision on sanctions will be made after the companies submit their opinions and the FTC committee reviews the case.