Six Paper Companies Fined 3 Billion Won for Colluding in Nongmin Newspaper Printing Paper Bids

Collusion on Winners, Shell Bidders, and Prices Through Preliminary Meetings and Phone Calls
Hansol Paper and Hankuk Paper Referred to Prosecutors

Major paper manufacturing companies, which have effectively monopolized the domestic printing paper supply market, were found to have colluded on bid winners and bid prices for several years in large-scale printing paper purchase tenders ordered by Nongmin Newspaper. Investigations revealed that these companies organized preliminary meetings and communicated via telephone to systematically set up shell bidders, maintaining winning bid rates over 10 percentage points higher than typical rates to secure unfair profits.

On September 9, the Korea Fair Trade Commission (KFTC) announced that it had imposed corrective orders and a total fine of 3,090,000,000 won on six paper companies for colluding in advance on prospective winners and bid prices in six printing paper purchase tenders ordered by Nongmin Newspaper. Two companies that played a leading role, Hansol Paper and Hankuk Paper, will be referred to the prosecution. The companies caught were Hansol Paper, Hankuk Paper, and three Moorim affiliates—Moorim P&P, Moorim Paper, and Moorim SP—as well as Hongwon Paper.

According to the investigation, these six companies meticulously coordinated winning order and prices through meetings or telephone calls ahead of six printing paper purchase tenders conducted by Nongmin Newspaper between June 2021 and November 2024, for producing periodicals, year-end calendars, and household account books. The purpose was to prevent price declines from competition and maintain high bid prices as paper demand decreased due to expanding digitalization and raw material costs, such as pulp, soared.

As a result of this collusion, the average winning bid rate in Nongmin Newspaper's tenders jumped from 87.6% (the average between 2018 and 2020, before collusion began) to 96.2% during the collusion period. In some specific tenders, the winning bid rate reached as high as 99.38%, indicating the successful bidder received virtually the entire estimated contract amount.

Even when unexpected variables arose during the collusion process, the companies maintained their illicit arrangement by having designated shell bidders take over. In the second tender held in 2022, when the intended winner Hansol Paper was disqualified from bidding due to delivery issues, Moorim Paper and Moorim P&P—previously assigned as supporting bidders—took over the allocation and won the contract. In the fifth tender in 2024, when the intended winner Hankuk Paper was eliminated due to incomplete documentation, Moorim affiliates, also standing as shell bidders, ultimately won the contract and split the allocation without outside competition.

The domestic printing paper market is structured as a duopoly, with Hansol Paper and the three Moorim companies constituting the two main pillars, followed by Hankuk Paper. The combined market share of the six companies exposed this time amounts to 95%. They exploited the fact that only these companies essentially met Nogmin Newspaper's participation criteria, effectively shutting out competition from the outset.

By company, Moorim P&P incurred the largest fine at 948,000,000 won, followed by Moorim Paper with 573,000,000 won, Hansol Paper with 556,000,000 won, Hankuk Paper with 515,000,000 won, Hongwon Paper with 358,000,000 won, and Moorim SP with 59,000,000 won.

This measure follows the KFTC's sanction in April this year against industry-wide printing paper price collusion and represents a consecutive punishment against bid-rigging practices in the tender market. The commission stated, "This case involved the six paper companies restricting competition in newspaper-ordered tenders as part of ongoing collusion affecting prices for all printing paper products used for publications," adding, "We will further strengthen our anti-cartel monitoring and continue to enforce strict penalties."

This content was produced with the assistance of AI translation services.