South Korean court overturns price collusion verdict on S-Oil

The Seoul High Court has overturned a decision imposed on S-Oil by the country’s Fair Trade Commission in May 2011 for price collusion. Under the High Court decision, the KRW43.8 billion (US$38.6 million) penalty that S-Oil paid to the FTC last November will be returned to the company with interest, barring any appeal filed with the Supreme Court. No details of the High Court judgment have been obtained. The FTC has not made a comment on whether it would file an appeal with the Supreme Court.
In October 2011, the South Korea antitrust watchdog formally ordered local refiners, S-Oil, SK Innovation and Hyundai, to pay KRW252.5 billion (US$212.7 million) in fines for collusion in the retail oil market to keep pump prices artificially inflated. According to the FTC, “The collusion has deprived fuel stations of opportunities to select refiners, which has restricted fair competition. It effectively blocked chances of price lowering through competition.”
The country’s second-biggest refiner, GS Caltex, was fined KRW177.1 billion (US$160 million) in the same case, but the FTC exempted it from payment, granting “leniency” for its voluntary report to the watchdog about the collusion. SK Innovation, South Korea’s biggest refiner, and No. 4 refiner Hyundai Oilbank also paid their penalties of KRW133.7 billion (US$120.7 million) and KRW75 billion (US$ 67.7 million), respectively, to the FTC in November 2011, though the two companies denied wrongdoing and have filed petitions with the High Court, which has yet to issue its verdict on these two cases.
SK Innovation controls 35% of the country’s 13,000 retail pump stations, GS Caltex accounts for 27%, Hyundai Oilbank has a 21% share, and S-Oil 15%. (September 3, 2012)