A case involving 37.17 million undelivered COVID-19 test kits led South Korea’s Fair Trade Commission (FTC) to decide on a 630 million won penalty for Celltrion Inc.
The FTC said Celltrion placed seven manufacturing orders between September 2021 and January 2022. The company changed product types in two orders without issuing required written revisions, while paperwork for another order arrived after the subcontractor had begun work.
South Korean rules require a prime contractor to provide written terms before work starts on an initial or revised order. Separately, the law prohibits arbitrary cancellation of manufacturing orders when the subcontractor is not at fault, the FTC said.
The commission said Celltrion canceled orders covering 37.17 million kits that remained undelivered when the supply contract ended in December 2022. It found the subcontractor was not at fault.
The FTC plans to issue a corrective order and said the action is intended to protect subcontractors’ rights. It also said it would continue pursuing subcontracting-law violations.
