[2] The meaning of "unfairness" in the act of demanding management information prohibited by Article 14 (1) of the Fair Transactions in Large Franchise and Retail Business Act

[3] Whether the court may revoke only the exceeding part of the penalty surcharge payment order that deviates from or abused discretionary power based on the degree of appropriate disposition (negative)

[4] Whether the Fair Trade Commission may take measures necessary to correct a violation against a large franchise and retail business operator who violates Article 14(1) of the Act on Fair Transactions in Large Franchise and Retail Business (affirmative), and whether the discretion to determine the necessity for correction and the details of the measures necessary to correct such violation is recognized (affirmative)

1. As to the supplier, etc.

A. Article 14(1) of the Act on Fair Transactions in Large Franchise and Retail Business (hereinafter “Large Franchise and Retail Business Act”) provides that “Large franchise and retail business operators shall not unfairly require suppliers, etc. to provide information falling under any of the following subparagraphs.” Article 14(1)1 provides that “Information on the terms and conditions of supply (including supply prices) supplied by a supplier to other business operators,” subparagraph 2 of “Information on the terms and conditions of sale (including rent) for the tenant to enter a store of another business operator,” and subparagraph 3 of “other information on the transaction partners of suppliers, etc. or suppliers, etc., as prescribed by Presidential Decree.” According to Article 3(1) of the Large-Scale Distribution Business Act, “large franchise and retail business operators, etc.” refers to “large franchise and retail business operators or sales tenants, etc.,” and Article 2 of the Large-Scale Distribution Business Act provides that “a supplier, regardless of type of transaction, directly supplies goods to a large franchise and retail business operator to consumers (including a third party who directly supplies goods to a large franchise and retail business operator.”

In addition, administrative laws and regulations, which serve as the basis for an indivative administrative disposition, must be strictly interpreted and applied, and shall not be excessively expanded or analogically interpreted in the direction unfavorable to the other party to the administrative disposition, and even if the teleological interpretation that takes into account the legislative intent, purpose, etc. is not entirely excluded, such interpretation shall not go beyond the ordinary meaning of the language and text (see Supreme Court Decision 2007Du13791, Feb. 28, 2008, etc.).

B. In full view of the structure, contents, and language of the Act on Large Franchise and Retail Business, the counterpart to the act of demanding unfair management information prohibited pursuant to Article 14(1) of the Act shall be deemed to be the supplier or sales lessee, i.e., a person who supplies goods to a large franchise and retail business operator, or a person who makes a transaction in the form of using goods to be sold by consumers by leasing part of a store from a large franchise and retail business operator and paying the price to the large franchise and retail business operator, and the demand for management information to those who are not the supplier or sales lessee shall not be deemed to constitute an act prohibited by Article 14(1) of the Act on Large Franchise and Retail Business

C. After compiling the adopted evidence, the lower court found the facts as indicated in its holding, and determined that the Plaintiff’s act of demanding management information from the five suppliers of this case was unlawful, on the grounds that there was insufficient evidence to acknowledge that the Plaintiff had transaction relations with Dlofditer at the time when the Plaintiff demanded management information in relation to Hyundai Pulet Kim Ma (hereinafter “Magpostore”), Oracom, Hafzel, Hafar Trading, Gag Trade Co., Ltd., and MM Co., Ltd. (hereinafter “the five suppliers of this case”), and there was no other evidence to acknowledge otherwise.

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s determination is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the interpretation and application of suppliers

2. As to the illegality of the act of demanding management information

A. The purpose of Article 14(1) of the Act is to prohibit a large franchise and retail business operator from unfairly demanding a supplier, etc. to provide management information under each subparagraph of paragraph (1) is to establish a fair trading order in a large franchise and retail business and to enable a large franchise and retail business operator and a supplier, etc. to develop complementaryly on an equal basis by preventing a large franchise and retail business operator from requesting a supplier, etc. to provide management information, taking into account the circumstances that if a large franchise and retail business operator requests a supplier, etc. to provide management information under each subparagraph of paragraph (1) and is provided with such management information, such management information may be used for a subsequent unfair trade practice by a large franchise and retail business operator and to restrict fair and free trading order.

Considering the language, purport, etc. of Article 14(1) of the Act on Large Franchise and Retail Business, “unfair” in the act of demanding the provision of management information prohibited under Article 14(1) of the said Act means a case where the required act goes beyond normal transaction practices and is deemed likely to disrupt fair trade, by taking into account such various circumstances as the situation of the market where the relevant party is faced, the characteristics of the goods subject to transaction, the intent, circumstances, purpose, effect, impact, and specific mode of the request for the provision of management information, the details and scope of the information requested, the details and degree of disadvantage that the other party in receipt of the request for the provision of management information may receive or receive when he/she does not comply therewith, the degree of the superior position of the business operator in the market, and the gap in the overall business ability between the relevant parties (see Supreme Court Decision 2015Du36010, Dec. 22, 2017).

B. (1) Examining the reasoning and records of the lower judgment, the Plaintiff: (a) a business operator who accounts for a significant market share in the domestic department store market; (b) the upper 3 department stores, including the Plaintiff, showed a gap between the sales volume and the rest of the department stores in terms of sales volume and the number of stores; (c) the Plaintiff’s scale, personal guidance, brand strike, etc., which led to the Plaintiff’s transaction with the Plaintiff; (b) the Plaintiff demanded the suppliers of this case (excluding the instant 5 suppliers without any transaction relationship) to send and submit to the Plaintiff a letter of the occupant’s intent, stating information, such as the sales volume, and dust, in relation to the establishment of the Kimpo store; and (c) the Plaintiff requested the Plaintiff to provide information, such as the Plaintiff’s e-mail sales volume, and 40 days prior to the establishment of the Maul store (hereinafter “Gaul store”); and (d) the Plaintiff did not arbitrarily submit information on the supplier’s sales volume, including the size of the sales volume, and other information that the Plaintiff acquired from the supplier’s.

(2) In light of the aforementioned legal principles and factual relations, the following circumstances revealed: (i) the Plaintiff’s management information of the instant supplier that the Plaintiff requested to provide was related to the supplier’s sales and specific progress in other ices in competition with the Plaintiff; (ii) there is a possibility that the Plaintiff may use such information for the Plaintiff’s interest not only the Plaintiff’s new transaction in ices, but also the transaction related to department stores; and (iii) even if the Plaintiff’s need to conduct market research is acknowledged, it is not necessarily necessary to require the supplier to provide information, such as sales and math of ices; and (iv) the Plaintiff’s demand to provide the Plaintiff’s business information, such as sales and math, that the Plaintiff requested to provide the instant supplier, appears to have not been provided to the other supplier. Rather, the Plaintiff appears to have had no reason to view that the Plaintiff’s business information was likely to interfere with the Plaintiff’s demand to provide the Plaintiff’s new business information in light of the fact that the Plaintiff failed to comply with the Plaintiff’s demand to provide the Plaintiff’s new business information.

C. Nevertheless, the lower court determined otherwise solely on the grounds stated in its reasoning. In so doing, the lower court erred by misapprehending the legal doctrine on the illegality of Article 14(1) of the Large Franchise and Retail Business Act. The Defendant’s ground of appeal pointing this out is with merit.

3. Scope of reversal

A. In the event that an order to pay a penalty surcharge that has discretion as to whether to impose a disposition or whether to impose a penalty surcharge is abused or abused by the discretionary authority, the court can only determine whether the order is a deviation or abuse of discretionary authority, but it cannot determine whether the order is appropriate within the scope of discretionary authority, and the court is bound to cancel its entirety, and it cannot only cancel its part that exceeds the reasonable part (see Supreme Court Decision 2007Du18062, Jun. 23, 2009, etc.).

As seen earlier, as long as the transaction relationship between the Plaintiff and the five suppliers of this case cannot be acknowledged, the Defendant shall re-calculated the penalty surcharge in consideration of these circumstances. As such, the order of penalty surcharge payment among the dispositions of this case cannot be exempted from the revocation of the entire amount. Therefore, the conclusion of the lower court that revoked this order is justifiable, and the lower court’s error of misapprehending the legal doctrine on illegality cannot be deemed to have affected the conclusion of the judgment,

B. Article 32 of the Large Franchise and Retail Business Act provides, “The Fair Trade Commission may order large franchise and retail business operators who violate the provisions of Articles 6(1) through (3), 7 through 10, 11(1) through (4), and 12 through 18 to suspend violations of the Act, to prevent further violations, to pay the sales amount, to compensate for costs of sales facilities, to delete or modify contract provisions, to publish the fact of receiving a corrective order, to notify suppliers, etc. of the fact of receiving a corrective order, to report plans or actions necessary for correcting violations, or to take other necessary corrective measures.” In light of such language and text, the Defendant may take all such measures as deemed necessary to correct such violations against large franchise and retail business operators who violate Article 14(1) of the Large Franchise and Retail Business Act, and with respect to the necessity of such corrective measures and the details of such corrective measures, discretion can be granted to the Defendant (see, e.g., Supreme Court Decision 200Du1781, Jun. 27, 2009).

In light of the above legal principles, even if the Plaintiff and the instant five suppliers cannot be recognized as a transactional relationship, the instant corrective order should be deemed lawful, as long as the Plaintiff’s demand for unfair management information against the suppliers, excluding the instant five suppliers, was acknowledged.

Next, even if the order of notification of the lifespan of this case was made under one provision, the order of notification of the lifespan of this case is competition with an independent notification order made by each supplier that provided information to the plaintiff as the receiver, and in fact, the order of notification of the lifespan of this case is lawful. However, the order of notification of the lifespan of this case where the five suppliers other than the five suppliers of this case were the receiver, but the order of notification of the lifespan of this case was made by the five suppliers of this case as the receiver, by misunderstanding the existence of transaction relation which is the basis of the disposition of this part, is affected by the exercise of discretion to assess the necessity of the order of notification of lifespan of the lifespan of this case where the five suppliers of this case were the receiver of this case

C. Ultimately, the part of the instant order to notify the fact that only the five suppliers are the receiver, among the instant order to notify the fact that the five suppliers are the receiver, is unlawful, and thus only can the order to revoke the entire order to notify the fact of the fact of the fact of the fact of the fact of the receipt, and does not revoke the entire order to notify the fact of the fact of the receipt. However, the lower court also revoked the part of the corrective order and the part of the order to notify the remaining suppliers, other than the instant five suppliers, as receiver. Therefore, the lower court erred by misapprehending the legal doctrine on the illegality of Article 14(1) of the Large Franchise and Retail Business Act and the legal doctrine on partial revocation of

4. Conclusion

Therefore, the part of the judgment of the court below regarding the corrective order is reversed, and the part regarding the corrective order is reversed, and it is so decided as per Disposition by the assent of all participating Justices on the bench. It is so decided as per Disposition by the assent of all participating Justices on the bench. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jae-hyung (Presiding Justice)