South Korea's anti-trust watchdog on Sunday slapped some 14.37 billion won ($12.98 million) in fines on six local home shopping channels for unfair trade practices.
  

The move by the Fair Trade Commission is the first action to utilize the strengthened Large-Scale Retailers` Fair Trade Practices Act to penalize big companies engaged in illegal trade with their suppliers.
  

"By taking firm action against large home shopping channels, the latest action should send a clear message to the retail sector that violations will not be tolerated," the FTC stressed.
  

CJ O Shopping, Lotte Homeshopping, GS Homeshopping, Hyundai's Hmall, HNS Mall and NS Mall, were cited for breaking the law.
  

It said besides the fines, the home shopping channels have been ordered to take corrective actions, and the results of its findings have been sent to the Ministry of Science, ICT and Future Planning, which is tasked with reviewing and extending businesses licenses for these companies.
  

The FTC said Lotte failed to sign contracts or delayed inking formal contracts for products they received from producers, others such as CJ O and Hyundai were found to have passed on sales promotion costs to their suppliers, with HNS and NS demanding sensitive management-related information from the producers. The latter request is unlawful because it can affect key management decisions and force companies to reveal business secrets.
  

Besides such actions, the watchdog said the GS and Lotte malls used their superior bargaining positions vis-a-vis producers to unilaterally hike up their sales commissions.
  

"They claimed poor sales as the reason for altering their previously set commission rates that hurt their product suppliers," the FTC said.
  

In addition, the corporate regulator said home shopping malls failed to pay product cost on time after sales took place, and skipped paying interest on delayed payments in clear violation of existing rules.
  

The FTC said it will work with other agencies to keep close tabs on shopping malls so a free and fair trade environment can be maintained.
  

Companies that shipped products to home shopping channels said the latest action, comes after a steady stream of complaints have been filed for unfair practices.
  

"Taking firm action should promote more fair trade and halt practices of passing along costs to suppliers, just because it was done that way in the past," an employee for a company that ships products to home shopping malls said. (Yonhap)