Paper Prices Jump 71% Amid 'Paper Industry Price Fixing' ... Publishing Sector Files Joint Lawsuit as Price Normalization Stalls

KFTC uncovers price fixing by six paper manufacturers, imposes KRW 338.3 billion in fines
Court suspends price-reset orders for four companies, drawing publishers' ire
"Losses exceed KRW 400 billion"; committee to recruit lawsuit participa

With printing paper prices having risen 71% amid nearly four years of price fixing in the paper industry, the publishing sector is launching a joint damages lawsuit against paper manufacturers. The move comes after the Fair Trade Commission imposed KRW 338.3 billion in fines and ordered the companies to redetermine their prices, but price normalization was held up when some paper manufacturers obtained court orders suspending enforcement. The publishing sector estimates that damages caused by the collusion will exceed KRW 400 billion.

Publishing industry representatives and lawmakers are calling for the normalization of printing paper prices and compensation for damages at a press conference on pursuing a joint damages lawsuit by the publishing industry against paper companies over collusion, held at the National Assembly Communication Center in Yeouido, Seoul, on the morning of the 12th. From left: Kim Bokyeong, spokesperson for the committee; Kim Seunguk, committee member; Kang Wangu, committee chair; Han Changmin, Social Democratic Party lawmaker; a sign language interpreter; Kim Jaewon, Rebuilding Korea Party lawmaker; and Lee Eunwoo, attorney at Jihyang Law Firm. Korean Publishers Association.

The organizing committee for the “Publishing Sector Joint Damages Lawsuit over Paper Manufacturers’ Price Fixing” (hereinafter, the committee) announced at a press conference at the National Assembly Communication Center in Yeouido, Seoul, on the morning of October 12 that it would move ahead in earnest with a joint damages lawsuit against paper manufacturers. Attendees included committee chair Kang Wangu, spokesperson Kim Bokyeong, Han Changmin of the Social Democratic Party, and Kim Jaewon of the Rebuilding Korea Party.

The committee plans to invite publishers to join the lawsuit from October 13 through November 15 and file the complaint in December. Jihyang Law Firm will represent the plaintiffs. The specific participation procedures and filing schedule have now been established, following the announcement in September by 19 publishing-related organizations, including the Korea Publishers Association and the Korean Publishers Association, that they would pursue a joint lawsuit.

The lawsuit stems from large-scale printing paper price fixing uncovered by the Fair Trade Commission in April. According to the commission’s investigation, six companies—Hansol Paper, Moorim P&P, Moorim Paper, Moorim SP, Korea Paper, and Hongwon Paper—met at least 60 times between February 2021 and December 2024, agreeing on and implementing price increases on seven occasions.

The collusion was also organized. The paper manufacturers adjusted selling prices by raising the benchmark prices for printing paper or reducing discount rates. To conceal the collusion, they used public payphones, restaurant phones, and mobile phones belonging to employees in other departments. They also used coins or dice to decide the order in which they would notify customers of price increases.

The six companies account for about 95% of the domestic printing paper market. During the period of collusion, the average selling price of printing paper rose by about 71%, from KRW 841,000 to KRW 1,439,000 per ton. The Fair Trade Commission calculated sales related to the collusion at approximately KRW 4.03 trillion.

The commission imposed a total fine of KRW 338.325 billion for the collusive conduct and decided to refer two corporations, including Korea Paper and Hongwon Paper, to prosecutors. To correct prices established through collusion, it also ordered each company to independently redetermine its prices and report any changes every six months for the next three years. This was the first time in 20 years that the commission had issued a price-redetermination order, since the 2006 flour price-fixing case.

However, price-normalization measures have been disrupted as the paper manufacturers filed administrative lawsuits and sought injunctions against enforcement. In August, the Seoul High Court partially granted requests by three companies—Moorim SP, Moorim Paper, and Moorim P&P—to suspend enforcement of the price-redetermination order. It also separately granted Korea Paper’s request. As a result, the price-redetermination orders and related reporting requirements for four of the six companies were suspended until 30 days after a ruling in the lawsuits on the merits.

The court considered, among other things, that immediate enforcement of the orders could cause harm that would be difficult to remedy. The Fair Trade Commission has said it will challenge the decisions through a further appeal and prove the legality of its measures in the lawsuits on the merits.

The publishing sector has protested that prices have not been sufficiently adjusted despite the increases caused by collusion, and that further price hikes are now being proposed. In September, 19 publishing organizations said some paper manufacturers had notified customers of plans to raise prices by up to 13% for certain products and called on the Fair Trade Commission to conduct a rigorous review.

The committee estimates that the publishing industry and consumers have suffered more than KRW 400 billion in damages from the collusion. It plans to use the Fair Trade Commission’s price-redetermination data and econometric analysis to estimate the competitive prices that would have prevailed without collusion, then seek compensation based on the difference between those prices and the actual transaction prices. Since fines are administrative penalties imposed by the state, paying them does not directly compensate publishers for their losses.

At the press conference, committee chair Kang Wangu said, “Rather than hiding behind their ill-gotten gains and dragging things out through administrative lawsuits, the paper industry must offer a sincere apology and immediately present a reasonable compensation plan.”

Calls for institutional reform have also been made in the National Assembly. Han Changmin said repeated collusion in the paper industry shifts the burden not only to the publishing and printing sectors but also to the public who buy books, stressing the need for institutional measures to strengthen collective redress for victims and deter collusion. Kim Jaewon also pointed to delays in implementing the price-redetermination orders and proposed further price increases, calling for a responsible response from the Fair Trade Commission.

On September 28, the government and the Democratic Party of Korea announced plans to pursue legislation to eradicate repeat collusion. They said they would seek to explicitly set out the legal basis for price-redetermination orders in the Fair Trade Act. The plans also include eliminating reductions in corrective measures for businesses that voluntarily report collusion.

Separately from the joint lawsuit, the publishing sector called on the Fair Trade Commission to enforce the price-redetermination orders strictly and demanded that organizations representing buyers be allowed to review the cost and pricing data submitted by paper manufacturers. A key issue in the lawsuit is expected to be how much of the excess costs actually borne by each publisher can be proven.

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