BUSINESS

FTC assisting class action against Samsung, LG

By Korea Herald
  • Published : Jan 24, 2012 - 15:53
  • Updated : Jan 24, 2012 - 19:31

The nation’s antitrust watchdog said Tuesday it will support a consumer class action lawsuit for the first time against Samsung Electronics and LG Electronics, which rigged prices for domestic appliances.

The Fair Trade Commission slapped the two companies with fines of 44.6 billion won ($39.6 million) for colluding to fix prices of washing machines, flat screen televisions and laptop computers.

“We will provide financial aid for a class action suit led by the Green Consumer Network in Korea as it searches for victims of price rigging by Samsung Electronics and LG Electronics,” an FTC official said.

The antitrust watchdog decided to support the suit as it concluded that the fines were not enough relief for consumer damages. The companies got the fines cut under a leniency policy.

The commission has already secured 100 million won to aid the legal action.

The Green Consumer Network in Korea has delayed the search for plaintiffs, which it had previously planned to complete by Feb. 14, to the end of next month in consideration of the FTC aid. The commission’s funds will be used for activities such as publishing advertisements on Internet portals.

Consumers who purchased the price-rigged models between 2008 and 2009 can join the class action lawsuit by submitting the receipts, product registration cards, a copy of their ID cards and letters of attorney to the Green Consumer Network in Korea. The cost for the lawsuit is 20,000 won.

The nongovernmental organization will assess the amount of damage for each consumer and add 500,000 won in mental solatium to work out the entire compensation.

“Consumers can get compensation of up to triple the actual damage in the United States, but that is not the case in Korea. We are preparing for the lawsuit to send a warning message to companies that just got off with reduced fines under the leniency policy,” Lee Joo-hong, a senior staff member of the Green Consumer Network, said.

Samsung Electronics and LG Electronics were caught raising the prices of flat screen televisions, washing machines and laptop computers by up to 200,000 won through price rigging and reducing sales promotion fees as their profits were expected to fall on the weakened Korean currency and slowing consumption.

By Kim So-hyun (sophie@heraldcorp.com)


LEADERS CLUB