Sejong, February 26, 2026 — The Korean Fair Trade Commission (KFTC) has imposed corrective orders and a fine of KRW 144 million (approximately $100,897] on Korea Engineering Plastics Co., Ltd. (KEP) for abusing its superior bargaining position in the polyoxymethylene processing market.
The KFTC, chaired by Joo Byung-gi, said KEP restricted a subcontractor from providing polyoxymethylene (POM) processing services to competing companies for approximately seven years.
POM is a type of engineering plastic — a high-performance thermoplastic resin — known for its strong chemical resistance and low friction compared with other plastic products.
Conduct At Issue
In September 2019, KEP signed an agreement with a POM processing contractor while extending their existing contract. The agreement included a non-compete clause prohibiting the contractor from supplying processing services to KEP’s competitors during the contract period and for three years after its termination — from September 2, 2019, to August 29, 2026.
The scope of the restriction covered nearly all major competitors, including Kolon Plastics, LG, BASF, and DuPont Plastics, as well as their subsidiaries and POM-related companies with significant influence in China. The clause effectively barred the contractor from directly or indirectly engaging in POM product manufacturing work for those firms.
As a result, the contractor was prevented from entering into POM processing agreements with other companies not only during the contract term but also for three years following its expiry.
Impact And Enforcement
The KFTC estimated that the contractor’s expected lost sales due to the restriction amounted to approximately KRW 3.2 billion.
The authority concluded that KEP’s conduct constituted an abuse of superior bargaining position under Korean law. In addition to the KRW 144 million administrative fine, the KFTC issued corrective orders requiring KEP to cease the unlawful conduct.
The decision underscores the Korean authority’s continued scrutiny of restrictive contractual practices that limit subcontractors’ ability to transact with competing firms.
