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FTC Investigates into Unfair Internal Trading by CJ Group Affiliate
Unfair Trade
FTC Investigates into Unfair Internal Trading by CJ Group Affiliate
  • By Michael Herh
  • June 29, 2017, 02:45
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A CJ Olive Networks store.
A CJ Olive Networks store.

 

The Fair Trade Commission (FTC) detected alleged unfair trade practices of CJ Olive Networks which operates Olive Young stores and began an investigation into them.

According to industry sources on June 28, it was confirmed that the FTC is conducting an on-site investigation by sending investigators to CJ Olive Networks headquarters in Seoul on the previous day.

It is said that FTC investigators are reportedly focusing on unfair cuts in payments for delivered goods and unfair returning practices that may occur due to the characteristics of the specialty store business such as Olive Young's low-cost discount strategy and volume purchases of specific items.

Lee Sun-ho, the eldest son of Lee Jae-hyun is the second largest shareholder of CJ Olive Networks that runs Olive Young, Korea's largest health and beauty brand.

On the other hand, last year, the FTC caught CJ CGV's internal trading for Jaesan Communications, which is controlled by Lee Jae-hwan, a younger brother of chairman Lee Jae-hyun and fined him about 7.2 billion won (US$6.4 million) and asked the prosecution to investigate the case.