Fair Trade Commission Launches On-Site Investigation of CJ Olive Young Over Suspected Violations of Large Retail Business Act

Second On-Site Investigation into Olive Young After Five Months
Attention on Possible Expansion to Industry Players Like Musinsa and Hi-Mart

The Fair Trade Commission has launched an on-site investigation into CJ Olive Young, following a similar probe into the home goods retailer Daiso. This is seen as a follow-up to the first round of investigations conducted this spring that targeted major large-scale retailers.

According to the retail industry and related government agencies on September 10, the Fair Trade Commission dispatched investigators to the CJ Olive Young headquarters in Dongja-dong, Yongsan-gu, Seoul earlier in the day in order to secure records and materials related to contracts and overall transaction details with suppliers. This additional on-site inspection comes five months after the first investigation in April for alleged violations of the Act on Fair Transactions in Large Retail Business.

The Fair Trade Commission is reported to be focusing on whether CJ Olive Young forced suppliers to accept returns without justifiable reason after receiving goods, or unfairly shifted various costs, such as promotional expenses, onto suppliers by leveraging its superior market position. Current law strictly prohibits large-scale retailers from transferring unsold inventory to suppliers without legitimate grounds or from demanding unfair economic benefits.

On September 8, the Fair Trade Commission also conducted a supplemental investigation at the headquarters of Asung Daiso. Given that major retail platforms such as Musinsa, Lotte Himart, and others were key targets in the intensive first-round investigation from April to May, there is now speculation that the second round of investigations will be gradually expanded.

Notably, CJ Olive Young has been penalized for similar violations in the past. In 2023, the Fair Trade Commission imposed a corrective order and a fine of approximately 1.9 billion won after finding that the company had disadvantaged suppliers by acquiring products at discounted prices under the guise of a large-scale promotional event and then selling them at regular prices to pocket the difference. Following administrative litigation and a court decision, the fine was later reduced to about 1.4 billion won.

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