The Fair Trade Commission confirmed on the 1st that it has conducted on-site investigations to verify whether Shinsegae Casa and Simmons violated the Agency Law (the Act on the Fairness of Agency Transactions). Following recent ex-officio investigations of major domestic furniture brands such as ACE BED, Hyundai LIVART, SIDIZ, and IL ROOM, the scope has now expanded to include premium furniture brands. It appears that the Fair Trade Commission is targeting allegations of 'oppression by agencies' throughout the furniture industry.
According to related industries, the Fair Trade Commission sent researchers to the headquarters of Shinsegae Casa located in Jung-gu, Seoul, and the headquarters of Simmons located in Icheon, Gyeonggi Province the previous day to secure agency contracts and internal transaction data. This investigation is an ex-officio investigation following allegations of violations of the agency law, including forced sales targets, transferring promotion and interior expenses, and discriminatory transaction conditions. It was initiated based on the Fair Trade Commission's own judgment.
The Fair Trade Commission had previously dispatched researchers to Hyundai LIVART and ACE BED on the 16th of last month, and on the 23rd, to the headquarters of SIDIZ and IL ROOM to conduct similar investigations. All of these companies have a nationwide agency network, and allegations have been raised that they unilaterally set contract terms or shifted expenses by exploiting their superior position during transactions.
Based on the investigation results, the Fair Trade Commission plans to review follow-up measures such as corrective orders, penalty surcharges, and criminal complaints. Last year, HANSSEM, FURSYS, and ENEX received corrective orders for violating the agency law. These companies were sanctioned for actions such as forcing full payment of goods as a condition for paying sales incentives or imposing penalties on agencies falling short of sales targets. This was the first case of the agency law being applied in the furniture industry.
A representative from the retail industry noted, "Furniture brands are reinforcing structures centered on directly managed stores while still imposing headquarters' standards on agencies, leading to a solidified structure." They added, "This investigation will serve as an opportunity to revisit the overall distribution structure." In fact, Simmons has been operating under a 100% directly managed system since 2019. A representative from the Fair Trade Commission stated, "It is difficult to discuss specific details due to the ongoing issues, but it is true that we are conducting ex-officio investigations in the furniture industry."