Hyundai Mobis, the nation’s largest auto parts maker, was slapped with 2.95 billion won ($2.57 million) in fines and corrective orders for demanding lower prices from its subcontractors, the state-run antitrust watchdog said Thursday.

According to the Fair Trade Commission, Hyundai Mobis, a unit of Hyundai Motor Group, abused its market dominance in demanding its smaller suppliers lower their prices between 2008 and 2011.

The company selected suppliers that promised the lowest prices and then demanded a further price cut of 0.6 to 10 percent from the originally proposed price for the final contract.

When a selected bidder was not the one that proposed the lowest price, the company asked the finalist to meet the lowest price during open bidding and then cut the price again.

Smaller partners also had to accept the company’s unilateral demand to cut supply prices throughout the contract period.

Hyundai Mobis sometimes paid its suppliers 1 to 19 percent lower prices without negotiating with them or citing typical reasons such as overcapacity, increased productivity or improvements in the production process.

The company implemented the unilateral price cut even on orders made 9 to 23 months earlier than the original agreement in the contract.

“Hyundai Mobis has overcut supply prices for contractors, taking advantage of its market dominance in the domestic car market. After receiving the FTC’s report, the company paid back 1.59 billion won that it earned from slashing prices to its 12 suppliers,” said an FTC official.

Because the unfair business activities were allegedly carried out after Hyundai Mobis signed a shared-growth agreement last year, the FTC plans to report the case to the presidential panel on shared growth between large and small firms for possible additional penalties.

By Lee Ji-yoon (jylee@heraldcorp.com)