SEOUL — South Korea’s antitrust watchdog has hit the nation’s five major logistics companies with a combined fine of over 3 billion KRW. The penalties come after the firms were caught shifting the financial burdens of workplace accidents, customer data leaks, and labor strikes onto their local operating agencies through unfair contract clauses.

The Fair Trade Commission (FTC) announced on Monday that it has imposed a total fine of 3.078 billion KRW (approximately $2.3 million USD) and issued corrective orders to Coupang Logistics Service, CJ Logistics (CJ_대한통운), Lotte Global Logistics, Hanjin, and Rosen for setting predatory terms and failing to issue timely contract paperwork.

The investigation was launched in August last year following growing public scrutiny over the courier industry's harsh working conditions. Critics have long argued that unfair corporate-to-agency contract practices indirectly fuel courier fatigue and severe on-site safety hazards.

Together, these five industry titans control over 90.5% of the domestic delivery market.

According to the FTC, the firms exploited their dominant market position to force local delivery agencies to bear all liabilities for industrial accidents, property damage, missing packages, and even corporate legal fees and fines. Furthermore, the contracts contained vague clauses regarding "breach of duty," allowing the parent companies to terminate agreements immediately without giving the agencies a chance to explain or contest the decisions.

Under South Korea's Subcontracting Act, prime contractors are strictly prohibited from squeezing the profits or violating the interests of subcontractors.

However, the watchdog found that the logistics giants routinely drafted clauses that protected their own bottom lines at the expense of local operators. Unfair practices included withholding interest earned on cash collateral and forcing agencies to pay for real estate mortgage fees.

The companies were also found to have heavily delayed the issuance of official subcontracts. Out of 2,055 monitored transactions involving delivery and terminal operations, some agencies only received their legal paperwork up to 761 days after the actual work had already begun. By law, written contracts must be issued before any services commence.

The FTC broke down the individual fines as follows:

Coupang Logistics Service: 759 million KRW
Hanjin: 696 million KRW
Lotte Global Logistics: 633 million KRW
CJ Logistics: 612 million KRW
Rosen: 378 million KRW

In response to the probe, the five courier companies have submitted rectification plans and are currently revising their contracts. Lotte Global Logistics has already finished updating its agreements, while the remaining four companies are required to complete their contract revisions within 90 days of receiving the FTC's official ruling.

This ruling follows a broader crackdown by the FTC on unfair subcontracting practices across various industries. Just a day prior, the watchdog penalized three construction firms 729 million KRW for shifting industrial accident liabilities onto their subcontractors.

"The contracts between major logistics firms and local agencies directly dictate the income levels and scope of responsibility for individual delivery drivers," said Kim Dong-myung, head of the FTC’s New Business Subcontract Bureau. "When unfair costs and liabilities are dumped onto these local agencies, that heavy burden inevitably trickles down to the gig workers and drivers on the front lines."

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