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The Fair Trade Commission on Monday fined the country's three largest newspapers a combined W552 million (US$1=W944) for offering excessive numbers of free copies for marketing purposes. It was the first time the FTC has fined the publishers for the distribution of free copies. Charging that the Chosun, Dong-a and JoongAng Ilbo in 2002 offered through their distributors free copies in excess of 20 percent of paid copies, the commission fined the Chosun Ilbo W240 million and the Dong-a and Joong-Ang W174 million each.
The FTC inspected the three major dailies based on complaints filed by a pro-government group calling itself Citizens' Coalition for Democratic Media and other civic organizations.
Experts questioned the move. Prof. Park Chun-il at Sookmyung Women's University said, "The commission has interpreted the concept of paid newspaper copies for expedience." Prof. Kim Woo-ryong at Hankuk University of Foreign Studies said, "It's unfair to regulate premium newspapers while leaving free newspapers untouched." Others questioned the motive of the FTC, which has its hands full dealing with violations by big corporations, decided to swoop on the newspaper market, which accounts for no more than 0.001 percent of GDP.
¡ß Contradictions
Kim Won-joon, the director of the FTC¡¯s Business Group Division said the core issue was whether paid newspapers constituted money collected from distributors or money received from the subscribers. "We've decided that the number of paid copies at the head office should be identical with that of the paid newspaper copies its distributors deliver and collect money for from subscribers,¡± he said. During a briefing on unfair transactions by 54 newspaper distributors, however, Kim said newspaper distributors ¡°are independent businesses." "Because a newspaper differs from a distributor, it¡¯s inappropriate to announce the amount of fines for distributors together with those of newspaper firms rather than individually," he said.
This contradicts an earlier FTC announcement that newspaper head offices are sanctioned based on the number of paid copies handled by their distributors, which seems to treat distributors as subordinate entities to the publisher.
Prof. Park says it is hard to accept that the FTC sanctions dailies based on an interpretation made for the sake of convenience when there is no established standard for what constitutes the number of paid copies. "Sanctions based on data on the number of paid newspaper copies declared at the Korea Audit Bureau of Circulations result in disadvantages to newspaper firms affiliated with the ABC," Prof. Kim said.
¡ßRegulating the newspaper market
The combined 2005 sales of the country's 10 largest newspapers stood at W1.51 trillion, a mere 0.001 percent of GDP. Yet the FTC's sanctions are concentrated on the newspaper market.
Of the 128 issues presented to the FTC's Plenary Council last year, 36 or 28.1 percent involved the newspaper market, according to Rep. Kim Yang-soo of the Grand National Party. In other words, one-third of the Plenary Council's business was allotted to regulating that tiny industry. And of the 150 compensations (W283 million) paid out to those who reported violations of the Fair Trade Law since 2003, 135 or 90 percent of the total (W173 million) were related to newspaper firms. The FTC claims it investigates newspaper firms based on information provided and declarations filed. But of the 748 investigations the commission conducted on newspaper companies from 2003 to September last year, the FTC launched 561 or 75 percent of its own initiative.
The FTC director, Kwon Oh-seung, said late last year, "We will counter malicious reports on the press with malice." Rep. Kim Yang-soo comments, "The FTC, in collaboration with the administration, is attacking media outlets critical of the government through unfair trade investigations."
(englishnews@chosun.com )
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