Seven companies suspected of colluding on bids for laboratory testing services at public hospitals for more than 12 years are set to face the Korea Fair Trade Commission. The contracts affected by the alleged collusion are valued at approximately 294 billion won ($208 million).

The Fair Trade Commission's secretariat said Tuesday it had submitted an examination report on seven specimen-testing and testing-support companies suspected of bid-rigging in laboratory service contracts at public hospitals, and had forwarded the report to the companies concerned.

The Korea Fair Trade Commission at Government Complex Sejong in Eojin-dong, Sejong [Newsis]
The Korea Fair Trade Commission at Government Complex Sejong in Eojin-dong, Sejong [Newsis]

An examination report sets out the facts of the alleged conduct, investigators' assessment of its illegality and their recommended measures. The commission will make a final ruling on whether the law was violated after deliberation and will determine the specific level of sanctions accordingly.

The seven companies named in the case are Green Cross Medical Foundation, GC Cell, Samkwang Medical Foundation, Samkwang Labtree, Seoul Clinical Laboratories, Seegene Medical Foundation and Eone Laboratories.

Commission investigators found that the seven companies engaged in bid-rigging and volume allocation across 706 procurement bids issued by public hospitals from January 2012 to October 2024 — a span of nearly 13 years. The total contract value of the affected bids stands at approximately 294 billion won.

Specimen testing involves analyzing samples collected from the human body — such as blood, urine, bodily fluids and tissue — to detect or measure specific substances or identify morphological abnormalities, enabling diagnoses of disease and infection. Common examples include viral tests for hepatitis and tissue biopsies for various cancers.

Hospitals outsource certain tests they cannot readily perform in-house, typically when demand is too low to justify the cost or when they lack the necessary diagnostic equipment, facilities or specialist staff. Contracted firms collect specimens from hospitals, run the tests using their own personnel and equipment, and transmit results through electronic systems linked to the hospitals.

Public hospitals have selected outside contractors for such specimen testing through competitive bidding since the late 2010s.

Investigators concluded that the conduct of the seven companies constituted bid-rigging and volume collusion under the Fair Trade Act — offenses classified as "extremely serious violations." They recommended corrective measures including a cease-and-desist order, fines, and referral of the companies and their executives for criminal prosecution.

If the full 294 billion won in affected contract value is treated as relevant revenue and the maximum penalty rate of 20 percent is applied straightforwardly, the calculated fine would reach up to 58.8 billion won. However, the actual fine will be determined after the commission confirms the relevant revenue figure during deliberations and applies adjustments for aggravating or mitigating factors, so the final amount may differ.

The seven companies have eight weeks from the date they received the examination report to submit written opinions or request access to and copies of evidence. The commission plans to convene a hearing and issue its final ruling as soon as the process guaranteeing the companies' right of defense is complete.


y2k@heraldcorp.com