KFTC Fines S-1 and S-Tec System 973 Million Won for Collusion in Apartment Security Bids

▲ Korea Fair Trade Commission (KFTC) Logo

Security firms S-1 and S-Tec System have been sanctioned for colluding in bids for integrated apartment security service contracts.

The Korea Fair Trade Commission (KFTC) announced on Sunday, July 5, that it has imposed corrective orders and a total of 973 million won in fines—641 million won on S-1 and 332 million won on S-Tec System—for violating the Monopoly Regulation and Fair Trade Act.

The two companies are accused of pre-arranging the winning bidders and bid prices for 23 integrated security service contracts held by 23 private apartment complexes across six regions—Busan, Gwangju, Daejeon, Sejong, South Chungcheong Province, and North Chungcheong Province—between November 2022 and January 2025.

Integrated security services combine mechanical security, such as CCTV integrated monitoring and access control systems, with human security services.

Under relevant laws, only companies that meet specific qualification requirements and have received permits from the competent regional police agency are eligible to participate in such bids.

Because the number of businesses is small, and even more limited in non-capital regions, there is a higher risk that bids will fail to attract enough participants.

S-1, which possesses substantial operational capabilities and a proven track record, conducted pre-bid sales activities targeting apartment complexes.

S-1 then requested that S-Tec System participate as a "stalking horse" bidder to prevent bids from failing or being canceled, even though S-1 expected to have an advantage in the proposal evaluations.

S-Tec System was not a genuine competitor to S-1, as it had almost no track record in performing integrated security services.

However, the company participated in the collusion because it was a spin-off from S-1 and had maintained a long-term cooperative relationship with the firm.

As a result of their agreement, it was confirmed that S-1 won 21 out of the 23 contracts, either by winning the bids or by securing private contracts after the initial bids failed.

(Photo: Provided by the Korea Fair Trade Commission, Yonhap News)

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