- Corrective orders and fines have been imposed on three companies for colluding to set the prices for online certificate issuance fees and issuance machine prices, as well as restricting each other from soliciting business from other companies' clients. -
The Korea Fair Trade Commission (KFTC) has decided to impose corrective orders and a total fine of 1.162 billion KRW on three companies* that were found to have colluded over approximately seven years, from April 2015 to May 2022, on prices and business partners related to the issuance** of certificates to universities.
- * CI Tech Co., Ltd., Intec Co., Ltd., and Korea Information Certificate Authority Inc. (formerly Digitalzone Co., Ltd.) [Hereafter referred to without "Co., Ltd."]
- ** Graduation certificates, academic transcripts, enrollment certificates, etc. (around 10 types)
(Note: Digitalzone was merged into Korea Information Certificate Authority on May 1, 2024, and has since been dissolved.)
Universities provide certificate issuance services both online and offline to current and former students. Online services are primarily conducted through websites operated by these companies, while offline services are provided via certificate issuance machines purchased from these companies.
The three companies involved in this case agreed to prevent competition on prices and sales to protect their profitability by 1) setting the prices for online certificate issuance fees and issuance machines, 2) prohibiting the free donation of certificate issuance machines, and 3) agreeing not to solicit business from universities that were clients of the other companies. They carried out these agreements through phone calls, text messages, and emails among their sales representatives.
Through this collusion, the three companies maintained a uniform online certificate issuance fee of 1,000 KRW per issuance and raised the prices of certificate issuance machines by up to 2.7 times. They were able to maintain most of their existing clients (universities) without significant competition.
- Intec raised prices by 2.7 times (from 2.37 million KRW to 6.5 million KRW), CI Tech by 1.5 times (from 7.08 million KRW to 10.29 million KRW), and Korea Information Certificate Authority (formerly Digitalzone) by 1.3 times (from 7.27 million KRW to 9.66 million KRW). ** The number of cases where the three companies transacted with each other's clients decreased significantly from 30 cases in the two years prior to the collusion to 5 cases over the approximately seven years afterward.
The university certificate issuance service is frequently used by the public, particularly in relation to employment. This collusion limited price competition and technological innovation among businesses, leading to financial waste for universities and increased fees for the public, including job seekers.
- In 2022, around 5.5 million online certificates were issued (based on issuance data from Intec and Korea Information Certificate Authority, formerly Digitalzone).
The KFTC’s action is significant in that it has uncovered and penalized collusion that caused financial waste for universities and economic burdens on the public in the domestic university certificate issuance service market over approximately seven years. It is expected to serve as a catalyst for improving collusive practices in this market and promoting technological innovation and competition.
The KFTC plans to continue strengthening its monitoring of areas closely related to the daily lives of the public and will respond strictly when violations of the law are detected.