Supreme Court upholds $1 million fine against GS Retail for unfair trade practices

South Korea's Supreme Court has affirmed a substantial 1.027 billion won (approximately $750,000 USD) fine imposed on GS Retail, a major retail conglomerate, for engaging in unfair trade practices. The ruling validates the Fair Trade Commission's (FTC) decision to penalize the company for allegedly forcing promotional expenses onto suppliers and returning merchandise without legitimate cause.

The case centered on GS Retail's alleged "갑질" (gapjil), a Korean term describing abusive behavior by those in power, specifically towards its business partners. The FTC initially levied the fine in January 2022, citing violations of the Fair Trade Act for Large-Scale Distribution Businesses. GS Retail, with annual revenues exceeding 100 billion won, falls under this act's purview.

According to the FTC's findings, from January 2015 to November 2018, GS Retail allegedly shifted the entire cost of promotional events to suppliers without proper written agreements. Furthermore, between January 2018 and June 2020, the company reportedly used broadcast personalities and celebrities from supplier companies as guests and models without formal written contracts specifying their secondment. The FTC also found that from April 2017 to October 2019, GS Retail returned over 62,000 items from eight suppliers without valid reasons, merely based on "return request forms."

GS Retail appealed the FTC's sanctions, arguing the penalties were unlawful. However, the Seoul High Court previously dismissed their claim, ruling that the FTC's actions were justified. The Supreme Court's recent decision to dismiss GS Retail's final appeal upholds the lower court's ruling, confirming the legality of the fine and the FTC's findings regarding the company's unfair business practices.