South Korea fines Celltrion $469,000 for unfair subcontracting in COVID-19 test kits
Synopsis
South Korea's FTC is fining Celltrion $469,000 for cancelling 37.17 million COVID-19 test kit orders without cause and ignoring documentation rules — a case that exposes how pandemic-era supply chains bred compliance failures that regulators are now aggressively unwinding.
Key Takeaways
South Korea's Fair Trade Commission (FTC) will fine Celltrion 630 million won ($469,000) for unfair subcontracting practices.
590 million won of the fine is for unlawful order cancellations; 40 million won for documentation failures.
Celltrion unilaterally cancelled orders for 37.17 million undelivered COVID-19 test kits on 26 December 2022 , with no fault attributed to the subcontractor.
The violations involved seven orders placed between September 2021 and January 2022 , with improper reclassification of POC kits to OTC products and back.
Separately, South Korea's labour ministry plans to fine Coupang and its subsidiaries 1.96 billion won ($1.5 million) over 206 labour and workplace safety violations.
South Korea's antitrust regulator, the Fair Trade Commission (FTC), announced on Thursday, 29 October that it will impose a 630 million won ($469,000) fine on Celltrion, a biotechnology company, for unlawfully cancelling orders and failing to furnish a subcontractor with legally mandated documents on time. The violations relate to the supply of COVID-19 test kits under a subcontracting arrangement and will be accompanied by a formal corrective order against the firm.
Breakdown of the Fine
Of the total 630 million won penalty, 590 million won has been allocated for the unfair cancellation of orders, while the remaining 40 million won covers the failure to meet documentation requirements. The FTC will also issue a corrective directive, signalling that monetary penalties alone are not considered sufficient to address the conduct.
What Celltrion Did Wrong
According to the FTC, Celltrion placed seven orders for COVID-19 test kits with its subcontractor between September 2021 and January 2022. The company failed to issue legally required documentation when altering product types across two of those orders, and delayed issuing documents for a third.
In one notable instance, Celltrion reclassified certain point-of-care (POC) test kits — intended for medical professionals — as over-the-counter (OTC) products for general consumers, before subsequently reverting some of those kits back to POC classification. Each such change required written documentation to be issued before the subcontractor commenced work, a requirement the company reportedly ignored.
The most serious finding involved the unilateral cancellation of orders for 37.17 million undelivered test kits when Celltrion terminated a supply contract on 26 December 2022, despite no fault on the part of the subcontractor. South Korea's Fair Transactions in Subcontracting Act explicitly prohibits prime contractors from arbitrarily cancelling or modifying manufacturing orders unless the subcontractor is responsible for a breach.
Regulator's Broader Stance
The FTC stated it will continue to actively enforce fair subcontracting standards across industries, framing this action as part of a sustained crackdown rather than an isolated response. This comes amid growing regulatory scrutiny of large corporations' conduct toward smaller supply-chain partners in South Korea.
Coupang Also in the Crosshairs
In a separate but concurrent development, South Korea's labour ministry announced plans to fine e-commerce giant Coupang and its subsidiaries a combined 1.96 billion won ($1.5 million) following an inspection that uncovered 206 labour and workplace safety violations across Coupang Fulfillment Services, Coupang Logistics Services, and associated logistics centres.
Authorities decided to pursue legal action for 61 violations — including the absence of safety measures for conveyor belts — while fines will be imposed for the remaining infractions. These include failures to conduct special health checkups for night shift workers, delays in submitting industrial accident reports to local labour authorities, and improper management or installation of break facilities.
Together, the actions against Celltrion and Coupang suggest South Korean regulators are intensifying oversight of corporate compliance, from subcontracting transparency to worker safety, setting a precedent for how the country's watchdogs will approach supply-chain and labour accountability going forward.
Point of View
000 fine against a company of Celltrion's scale is unlikely to deter future violations unless the FTC escalates to debarment or director-level liability. The simultaneous Coupang action suggests Seoul is using a dual-track enforcement strategy — trade and labour — but neither fine appears proportionate to the scale of the breaches. The real test is whether these corrective orders carry enforceable timelines and independent audits.
NationPress
29 Oct 2026
Frequently Asked Questions
Why is South Korea fining Celltrion?
South Korea's Fair Trade Commission is fining Celltrion 630 million won ($469,000) for violating the Fair Transactions in Subcontracting Act. The company unlawfully cancelled orders for 37.17 million COVID-19 test kits without fault by the subcontractor, and also failed to issue legally required documentation when modifying product types under two orders.
What were the specific subcontracting violations by Celltrion?
Celltrion placed seven COVID-19 test kit orders between September 2021 and January 2022 without properly issuing written documents for product-type changes on two orders, and delayed documentation on a third. Most critically, it unilaterally cancelled orders for 37.17 million undelivered kits on 26 December 2022, which is prohibited under South Korean law unless the subcontractor is at fault.
What is the Fair Transactions in Subcontracting Act?
It is a South Korean law that requires prime contractors to provide legally mandated written documents before subcontractors begin work on initial or revised orders, and prohibits the arbitrary cancellation or modification of manufacturing orders where the subcontractor is not at fault. The FTC enforces this law.
What action is being taken against Coupang in South Korea?
South Korea's labour ministry plans to fine Coupang and its subsidiaries — Coupang Fulfillment Services and Coupang Logistics Services — a combined 1.96 billion won ($1.5 million) for 206 labour and workplace safety violations. These include missing conveyor belt safety measures, failures to conduct health checkups for night shift workers, and delays in reporting industrial accidents.
What happens to Celltrion after the FTC ruling?
Beyond the 630 million won fine, Celltrion will receive a formal corrective order from the FTC. The regulator has stated it will continue to crack down on unfair subcontracting practices, meaning the company may face closer scrutiny of future supply-chain arrangements.
