Business Ethics and Corporate Culture

South Korean Competition Watchdog Fines Electrical Goods Companies

South Korea’s Fair Trade Commission (FTC) has fined Samsung Electronics and LG Electronics a total of US$38.5 million for price-fixing. The FTC alleged that the firms colluded between 2008 and 2009 to keep washing machine prices at agreed levels, while prices of flat-panel TVs and laptop computers were also manipulated. However LG Electronics reportedly anticipates that it will be exempt from penalties as it voluntarily reported findings of employees’ price-fixing discussions to the FTC.
ABS-CBN News: Samsung, LG fined $38.5 million for price-fixing
(Source: ABS-CBN News)

Company Commits to Compliance
Asia Pacific

The Australian Communications and Media Authority (ACMA) has announced that it has accepted an enforceable undertaking (9 January 2012) from Vodafone Hutchison Australia (VHA), following complaints that consumers on the Do Not Call Register had received unsolicited marketing calls. As part of the undertaking, VHA has agreed to audit its dealers for compliance with the Do Not Call Register Act 2006 No. 88 (Cth) (the Act). ACMA chairperson Chris Chapman reminded all telecommunications carriers that their dealers must also comply with the Act, and any transgressions that are discovered shall be reported to the ACMA immediately.
ACMA’s media release (10 January 2012)
(Source: ACMA; Lawlex Legislative Alert & Premium Research)

Pepsi to Pay African-American Applicants US$3.13 Million Over Racial Discrimination

The US Equal Employment Opportunity Commission (EEOC) has announced that Pepsi Beverages (Pepsi) will pay US$3.13 million and offer job offers and training to African-American applicants for positions at Pepsi, who were allegedly refused jobs because of their race. The EEOC stated that Pepsi discriminated against African-American applicants by subjecting them to a criminal background check as part of its policy under which “job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense”. Under Title VII of the Civil Rights Act of 1964 (the Act), “[t]he use of arrest and conviction records to deny employment can be illegal … when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity”. Pepsi will train its hiring personnel and managers to understand their obligations under the Act.
EEOC’s media release (11 January 2012)
(Source: EEOC)

Cleaning Co to Pay US$450,00 to Former Employees Over Racial Discrimination

The US Equal Employment Opportunity Commission (EEOC) has announced that cleaning company Matrix LLC (Matrix) will pay US$450,000 to 15 former employees for discriminating against African-American employees and retaliating against American employee Barbara Palermi for disobeying an order not to hire any more African-American cleaners at a client’s site. According to the EEOC, African-American cleaners were disallowed from using the cafeteria and were later replaced with an entirely American cleaning crew. Matrix is also subject to a three-year consent decree which prevents it from engaging in any further race discrimination or retaliation.
EEOC’s media release (6 January 2012)
(Source: EEOC)

Growing Number of Private Companies Take Ethical Pledge
Asia Pacific

The Manila Bulletin reports that an increasing number of companies are signing the Integrity Pledge, “a commitment to ethical business practices and good corporate governance as part of efforts to improve the business climate in the country”, with the government. The pledge requires companies to:

  • “[m]aintain a code of conduct;
  • hold training programs;
  • implement internal systems and controls;
  • maintain financial reporting mechanisms;
  • devise channels by which employees and stakeholders can raise ethical concerns;
  • enter into integrity pacts with businesses and government agencies; and
  • refrain from engaging in business with parties that demonstrate unethical practices”.

Manila Bulletin: ‘Integrity Pledge’ a Commitment to Ethical Business Practices, Good Governance (10 January 2012)
(Source: Manila Bulletin)