E-Mart accuses card issuers of price-fixing.

(From The Korea Herald)

By Yoo Soh-jung E-Mart, Korea's No. 1 discount retailer, yesterday requested the nation's competition regulator to investigate three card companies on charges of collusion and price-fixing in an escalating dispute over credit-card fees.

The retailer reaffirmed that it would cancel its contract with BC Card altogether if the card issuer unilaterally raises its sales transaction fee today.

E-Mart, the discount operation of Shinesgae Co., filed the complaint against BC Card, LG Card and KB Card with the Fair Trade Commission.

The discounter claimed that the card issuers are colluding to raise card fees and discriminating against E-Mart by imposing the fee increase only on the giant discount chain.

"Not only is it unfair how BC Card decided on its own to impose a higher sales fee on us without an agreement but also how it is imposing it only on E-Mart, and this calls for a reason to file a claim and present it before the Fair Trade Commission," Lee Dal-su, a spokesman for E-Mart, told The Korea Herald. The dispute erupted this month when E-Mart rejected the higher fee proposed by BC Card, which was to go into effect at two of its new outlets that opened this month and 64 existing outlets next month. It has already annulled contracts for the two new stores.

BC Card said it is raising its transaction fee to at least 2 percent and at most to 2.35 percent from the current 1.5 percent at all discounters, starting with E-Mart. "We plan to start negotiations with other discount retailers as soon as we complete a cost analysis of each of them," said Shin Dong-eun, a BC Card spokesman. "The fee increase is part of a long-term plan, so all the discounters will eventually have to face the change." Shin said that BC Card has different rates applied to each of the 64 E-Mart outlets and the variations are not determined according to revenue. He said that one factor is credit risk at each store but declined to elaborate on the other "many factors." This may mean prices at each E-Mart outlet could differ, as the retailer says higher transaction fees would call for such.