KFTC fines Samsung SDI for improper technology transfer to China

The Korea Fair Trade Commission (KFTC) has slapped Samsung SDI with a fine of 270 million won ($222,000) over the Korean battery maker’s technology transfer to a Chinese supplier without the consent of a technology owner.

The fine consists of 250 million won for divulgence of trade secret and 20 million won for violating the process of prior written consent before technology transfer under the current Fair Transactions in Subcontracting Act, the Korean antitrust regulator said on Monday.

According to the KFTC, Samsung SDI was asked by a manufacturer in China in May 2018 for technical drawings to make a transport tray to carry battery parts to a Samsung SDI subsidiary in China. The subsidiary is a joint venture 65 percent owned by Samsung SDI and the remainder by two Chinese companies.

Samsung SDI transferred the drawings held by its Korean supplier to the Chinese manufacturer through its subsidiary. But the drawings were originally made by another Korean company and the supplier has held them in its custody with consent from the owner.

Samsung SDI argued that the only technology resources originated from its Korean supplier and under its possession are subject to the Fair Transactions in Subcontracting Act and thus the transferred drawings in this case are not subject to legal protection. Samsung SDI did not inform the supplier or the drawings owner that the drawings would be passed to the Chinese supplier.

The regulator ruled that technology resources possessed by a supplier in the Subcontracting Act is not limited to those developed by the supplier, but also include those held by the supplier through sale, license agreement, or usage approval, and it is reasonable that these technology resources should be protected, given the purpose of this law enacted to prevent abuse by a project owner against its suppliers.

The KFTC also said it identified 16 additional cases where Samsung SDI requested technology information on battery part manufacturing and shipping from eight suppliers without the issuance of a proper written request, which constitutes a violation of the law.

By Baek Sang-kyung and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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