– Providing university development funds as compensation for contract agreements deemed a legal violation –
The Korea Fair Trade Commission (Chairman: Han Ki-jeong, hereinafter "KFTC") has issued correction orders to two online college application agencies—Uwayapply Co., Ltd. (hereinafter "Uway") and Jinhakapply Co., Ltd. (hereinafter "Jinhak")—for engaging in unfair customer inducement. The KFTC determined that these companies provided university development funds and goods to universities as compensation in exchange for signing online application service contracts.
Online college application services refer to services where agencies assist applicants in submitting college applications via the internet. These agencies enter into contracts with universities to provide such services and receive service fees from the institutions. Currently, the market is effectively a duopoly dominated by Uway and Jinhak.
Uway and Jinhak were found to have provided monetary benefits such as university development funds, workshop sponsorships, sports event support, and concert sponsorships—as well as goods including iPads, multifunction printers, laptops, and uniforms—as a condition for either signing new service contracts or maintaining existing ones with universities.
It is standard commercial practice for businesses to compete based on price, quality, or other merits to attract customers. For online application services, this would normally include competition based on service fees, system security and reliability, concurrent user handling capabilities, and failure recovery processes.
However, offering development funds, sponsorships, and goods does not constitute merit-based competition. These monetary and material incentives hinder price competition on service fees and can ultimately harm applicants, who bear the burden of such fees. Therefore, the KFTC judged these acts to be unfair methods of customer inducement.