FTC cracks down on newspaper companies

As expected, the Fair Trade Commission (FTC) will crack down on newspaper companies. Lee Nam-Kee, chairman of the FTC, said Monday that the newspaper audit will be implemented, signaling that it will closely monitor every aspect of the management of newspaper publishing firms.

Lee suggested two main principles of the newspaper auditing system: Basically, it will be left to the hands of newspaper association. Yet if it is found that the association is not properly handling the matter, however, the FTC will step in to process it. Also, the FTC will investigate the case to restore fair transactions in the market if the voluntary function is not working properly. Such a decision is far from its principle that places priority on the self-control.

On the day`s announcement, Lee mentioned that the FTC would investigate eight business groups. He has taken back his remark made Jan. 5 that the FTC would not investigate large corporations during the first half because they are faced with difficulties. Lee said that eight of the nation`s top 30 chaebol groups that haven`t gone through investigations for unfair transactions would be investigated on grounds of fairness. He also noted that the FTC would investigate four leading groups on suspicion of irregular internal trading and unfair acts in the second half. It is believed that the FTC has adopted such a policy in order to avert criticism from the press with regard to the newspaper probe.

Lee has made lengthy remarks about the problems faced by regional newspaper companies. He pointed out that regional newspapers are harassing construction firms and small and medium-sized enterprises, forcing them to place advertising in their papers. ``Some companies even place advertisement without permission and then ask for payment for the ads,`` he said. ``Also, some companies employ staff without paying salary and force them to earn commission from ad sales.`` There are up to six or seven newspaper companies even in small cities. Some criticize that it has been a long-standing situation and is not something that the FTC should deal with. They said that it is simply intended to soften the criticism that the FTC`s crackdown is focused on the big three newspapers -- Dong-A, Chosun and Joongang. It is for this reason that the FTC has been doubted for being utilized for political purposes.

Choi Young-Hae moneychoi@donga.com