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Olive Young: Facing Record Fine in Market Dominance Scandal

In a significant development, Olive Young, a major player in South Korea's cosmetics and health and beauty retail sector, is currently in the hot seat. The Fair Trade Commission is actively contemplating imposing a substantial fine on the company over allegations of market abuse, including claims of unfair returns and exclusive dealings with suppliers.

Olive Young in South Korea | Image from SokoGlam
Olive Young in South Korea | Image from SokoGlam


A report by the Korea Economic Daily discloses that Olive Young is being accused of pressuring suppliers into exclusive agreements, preventing them from collaborating with competitors like Lalabla (GS Retail), LOHB's (Lotte Shopping), and Boots (E-Mart). The Fair Trade Commission's examination report, similar to a prosecutor's indictment, is expected to be sent to the company in the coming month. The potential fine could range from 100 to 500 billion won, depending on the severity of the violation, allowing for fines of up to 6% of sales.


CJ Olive Young, South Korea's leading cosmetics platform, has witnessed rapid growth, with the number of offline stores increasing from 1,198 in 2018 to 1,298 this year. This expansion coincided with the exit of competitors such as Lops, Lalabla, and Boots from the market. The Fair Trade Commission asserts that Olive Young has abused its market power to eliminate competitors, raising concerns about market consolidation through an alleged "abuse of power." However, CJ Olive Young disputes these claims, asserting that it is not a market-dominant business operator.


The investigation spotlights the role of regulatory bodies in maintaining a fair and competitive marketplace. The case of Olive Young underscores the challenges and consequences faced by companies perceived to exploit their dominant market positions. The final verdict will have profound industry implications, and we will provide updates as the situation evolves. Source: Korea Economic Daily (Reporters: Lee Ji-hoon, Ha Soo-jeong) https://www.hankyung.com/article/2023020839021


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