South Korea’s Fair Trade Commission (FTC) has imposed a hefty fine on Dunlop Sports Korea for restricting retailers from offering discounts on its golf clubs, a move deemed an illegal restraint of competition.

The FTC announced on Monday that Dunlop Sports Korea would face a US$1.29 million fine for violating fair trade laws by enforcing resale price maintenance and unfair trading conditions on its dealers between 2020 and 2023.

Dunlop, the exclusive importer and distributor of Japan’s popular A-brand golf clubs, allegedly set minimum selling prices for both online and offline sales. Retailers who violated the policy faced penalties, including supply restrictions on high-demand models, withdrawal of financial incentives, and even termination of business agreements.

To ensure compliance, Dunlop reportedly conducted undercover inspections of retailers multiple times a year, sending disguised customers into stores and monitoring online listings daily. When violations were detected, punitive measures were enforced, effectively eliminating price competition among distributors.

The company was also found to have pressured authorized dealers to block resales to non-affiliated retailers, thereby preventing independent stores from undercutting prices.

Given the repeated nature of the violations, regulators imposed a significantly higher penalty this time, with the largest fine in the 2009 case amounting to only 400 million won ($277,000).

“This decision serves as a wake-up call to companies that attempt to manipulate pricing through unfair trade practices,” said an FTC official. “Consumers can now expect a more competitive market with lower golf club prices.”

The ruling underscores South Korea’s intensified efforts to curb anti-competitive business practices, particularly in sectors where price-fixing has long been a concern. Industry analysts expect stricter regulatory scrutiny on similar cases in the future.

This story was originally published by Lina Jang, via Korea Bizwire.