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FTC fines Volvo for not following technical data request guidelines

Industry 14:28 December 09, 2018

SEJONG, Dec. 9 (Yonhap) -- South Korea's antitrust watchdog said Sunday that it has fined Volvo's local unit 20 million won (US$17,800) for not adhering to the country's technical data request guidelines when dealing with its subcontractors.

The Fair Trade Commission (FTC) said that besides the fine, Volvo Group Korea, which produces and sells excavators and various types of construction equipment here, has been instructed to change its practices in regards to asking for blueprints for components made by its partners.

The multinational construction company, which reported annual sales of just under 1.62 trillion won in 2016, has been cited as asking 10 partner companies to hand over 226 parts blueprints without providing the necessary request documentation as stipulated by the law. The requests were made from Jan. 2015 through August of last year.

An excavator made by Volvo Group (Yonhap)

Under the country's subcontracting act, a prime contractor like Volvo needs to clearly outline in writing why the technical data is needed, how it will protect corporate secrets, the rights of the information provided and what compensation will be provided. The act was set up to protect smaller companies from unfair requests by bigger companies that could disrupt fair market transactions.

The FTC said that it checked to see if Volvo transferred the data to others or arbitrarily used it without authorization but did not detect any violations.

"The system is in place to defend against abuse, with the FTC keeping close tabs to ensure that the safeguards are maintained," a state regulator said.

He said Volvo has been fined because it acted in a way that could have led to the wrongful use of smaller companies' technology.
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