[2] Acts and subordinate statutes that serve as the basis for determining the illegality of an administrative disposition, and whether the court may determine the illegality of the disposition by comprehensively taking into account all the materials, other than the materials that were known to the administrative agency at the time of closing argument at the trial court (affirmative)

In addition to these circumstances, determination of mitigation and mitigation rate is subject to the discretion of the Fair Trade Commission and it also has discretion to determine internal administrative work rules. Considering that there is no specific provision on the application method of mitigation rate by reasons of adjustment in the decision of imposition of penalty surcharges, the Fair Trade Commission does not go against the legislative intent of the penalty surcharge system and mitigation system, and it does not go against unreasonable or arbitrary standards applied in imposing penalty surcharges; furthermore, it is difficult to deem that there is an error of deviation from and abuse of discretionary power in imposing penalty surcharges, unless there are grounds such as misunderstanding the fact that serves as the basis for imposing penalty surcharges, or contrary to the principle of proportionality and equality in imposing penalty surcharges.

[2] Whether an administrative disposition is illegal shall be determined on the basis of the law and fact-finding at the time of the administrative disposition. The court may determine whether the administrative disposition was unlawful on the basis of the objective facts established at the time of disposition by comprehensively taking into account not only the materials known to the administrative agency at the time of the administrative disposition, but also all the materials submitted at the time of the closing of arguments in fact-finding trials. If an administrative disposition was issued by the administrative agency but later revoked in the administrative litigation

The former Public Notice on the Detailed Criteria, etc. for Imposition of Penalty Surcharges (amended by the Fair Trade Commission Notice No. 2014-7, May 30, 2014; hereinafter “former Public Notice”) Ⅳ. 2. b. (2) provides that when calculating the frequency of a corrective measure in the past, a judgment of invalidation or revocation of a corrective measure shall be excluded. In the calculation of the number of times of a penalty surcharge, the corrective measure against a violation based on the increase in the number of times of the violation becomes final and conclusive on the ground that the corrective measure against the violation, which is based on the increase in the number of times of the violation, becomes final and conclusive on the ground that the other party to the disposition imposing a penalty surcharge, “where a judgment of revocation

However, the Fair Trade Commission has discretion to determine whether to impose penalty surcharges and the amount of penalty surcharges within the scope of the upper limit of penalty surcharges under the Monopoly Regulation and Fair Trade Act. In addition, Article 4.2.2.2.2.2.1 of the former Public Notice of Penalty Surcharges, which is the discretionary standard, provides only the upper limit of the aggravated rate of penalty surcharges based on the frequency of violations and the accumulated points of penalty surcharges. Therefore, even if the cancellation ruling on corrective measures against violations is excluded from the number of calculation to increase the number of times of such violations, if the cause does not affect the imposition of penalty surcharges, and thus, the disposition is deemed unlawful.

1. Whether the statute of limitations has lapsed (Ground of appeal No. 1)

A. If a business entity has reached multiple agreements over a long-term period, and if the multiple agreements have been implemented for the same purpose on the basis of a single intent, and without interruption, the specific contents of the agreement have been partially modified, such series of agreements should be deemed as one unfair collaborative act, barring special circumstances (see, e.g., Supreme Court Decisions 2007Du3756, Sept. 25, 2008; 2013Du6169, Feb. 12, 2015).

B. On the grounds delineated below, the lower court determined that the instant collaborative act was aimed at achieving the same purpose based on a single intent, and as a whole, constitutes a single unfair collaborative act, and that the statute of limitations for disposal was not imposed on such premise.

① In 2005, six employees, including the Plaintiff, anticipated that a bid for a large number of LNG storage tank construction works will be ordered, and agreed on basic principles, such as the formation of a consensus on the stable receipt of contracts by allocating the successful bid volume among the companies.

② Accordingly, each agreement in the year 2006, 2007, and 2009 may be deemed to have continued to meet several times in the process of implementing the said agreement and to reach an agreement for the decision of specific matters.

C. Such determination by the lower court is based on the legal doctrine as seen earlier, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine regarding the establishment of one collaborative act and the prescription period, or by exceeding the bounds of the free evaluation

2. Whether the calculation method of penalty surcharges is unlawful (Ground of appeal No. 2)

A. 1) In full view of the provisions of Articles 6 and 22 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”), the Fair Trade Commission may discretionaryly determine whether to impose a penalty surcharge on a violation of the Fair Trade Act and if a penalty surcharge is to be imposed, the amount of the penalty surcharge can be determined specifically within a certain scope prescribed by the Fair Trade Act and the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hereinafter “Enforcement Decree of the Fair Trade Act”), so the imposition of a penalty surcharge on a violator of the Act by the Fair Trade Commission is a discretionary act. However, if the Fair Trade Commission misleads the fact that serves as the basis for the imposition of a penalty surcharge while exercising such discretion, or if there is a reason contrary to the principle of proportionality and equality, it is illegal as a deviation or abuse of discretionary power (see, e.g., Supreme Court Decision 2009Du15005, Sept.

2) Article 61(1) and [Attachment 2] 2.4.1 of the Enforcement Decree of the Fair Trade Act provides that “If it is deemed that a violation enterpriser’s actual ability to bear a penalty or its violation affects the market, or the size of profits acquired from the violation under Article 5-3(1)3 of the Act is excessive because of its failure to fully reflect the actual burden on the market or its violation, it may be reduced to a maximum of 50/100 of the second adjusted calculation standard, and a penalty surcharge may be determined as a penalty surcharge.” In addition, Article 61(1), (3), and [Attachment 2] of the Enforcement Decree of the Fair Trade Act provides that “where it is deemed that the violation enterpriser’s financial or economic situation or the size of profits acquired from the violation is excessive, it shall be reduced to a maximum of 50/100 of the adjusted calculation standard, as adjusted in accordance with the following: (a) the adjusted calculation standard of penalty surcharges shall be clearly stated that the violation of Article 61(1), (3), and [Attachment 2] of the former Enforcement Decree of the Fair Trade Commission’s.

In light of the aforementioned forms and contents, the provision regarding the notice of penalty surcharges is a discretionary rule, i.e., the administrative agency’s internal rules on administrative affairs, which are established based on the exercise of discretion regarding the calculation of penalty surcharges and the imposition thereof, and setting the standards for the calculation and imposition thereof belongs to the discretion of the administrative agency, so long as it is deemed that the standards are not consistent with the Constitution or laws, or are not objectively reasonable, and thus an abuse of discretionary power, the administrative agency’s intent should be respected as far as possible. Such discretionary rules generally have the effect only within the administrative organization, but do not have external binding force, and thus, are not immediately illegal merely because they violated administrative disposition. However, if administrative practices take place after the enforcement of the rules of discretion, as prescribed by the principle of equality or the principle of trust protection, barring any special circumstance, a disposition contrary thereto is an unlawful disposition that deviates from and abused the rules of law in relation to the other party (see, e.g., Supreme Court Decision 201Du81381, Nov. 14, 2013).

3) However, the notice of penalty surcharges IV. 4. A. (1) and (2) merely stipulate the grounds for, and the rate of mitigation of, the second adjusted calculation standards when calculating the penalty surcharges through the second adjustment, and do not specifically stipulate whether to apply the reduction rate in whole or in part according to the grounds for each adjustment in the calculation of the penalty surcharges, and whether the reduction rate can be applied gradually. This is necessary to set the standards by comprehensively taking into account the legislative purport of the system of penalty surcharges and the necessity for preventing the abuse of the reduction rate, and the public interest purpose of the relevant Acts and subordinate statutes and the notice of the penalty surcharges, and the relevant provisions do not immediately derive the one-day standard in the language of the relevant Acts and subordinate statutes and the notice of the penalty surcharges.

In addition to these circumstances, determination of mitigation and mitigation rate is subject to the discretion of the Fair Trade Commission and it also has discretion to determine internal administrative work rules. Considering that there is no specific provision on the application method of mitigation rate by reasons of adjustment in the decision of imposition of penalty surcharges, the Fair Trade Commission does not go against the legislative intent of the penalty surcharge system and mitigation system, and it does not go against unreasonable or arbitrary standards applied in imposing penalty surcharges; furthermore, it is difficult to deem that there is an error of deviation from and abuse of discretionary power in imposing penalty surcharges, unless there are grounds such as misunderstanding the fact that serves as the basis for imposing penalty surcharges, or contrary to the principle of proportionality and equality in imposing penalty surcharges.

B. The lower court determined that the instant disposition cannot be deemed to violate the principle of equality or the principle of protection of trust on the ground that: (a) the Defendant calculated the “provisional penalty surcharge” by applying the reduction rate to be applied as a whole at the imposition stage of penalty surcharges; (b) applied the reduction rate reflecting the size of profits acquired by distinguishing the type of participation in bidding based on the unfair collaborative act; (c) it is difficult to deem that the Defendant’s method of application of the reduction rate is arbitrary or that there was an abuse of discretion in its method; and (d) it is difficult to

C. Such determination by the lower court is based on the legal doctrine as seen earlier, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the principle of self-regulation of administration

3. Whether the number of violations of law is illegal (Ground of appeal No. 3)

A. As to the base date for calculating the frequency of violations

1) Article 55-3(1) of the Fair Trade Act provides that the Fair Trade Commission shall impose a penalty surcharge in consideration of the period and frequency of a violation (Article 55-3(1) of the Fair Trade Act. Article 61(1) [Attachment 2] [Attachment 2] of the Enforcement Decree of the Fair Trade Act upon delegation by Article 55-3(5) of the Fair Trade Act shall be adjusted in accordance with the standards determined and publicly notified by the Fair Trade Commission within 50/100 of the standards for calculation, taking into account the period and frequency of a violation. Based on such provision, the former Public Notice on the detailed standards for imposition of a penalty surcharge (amended by Notice of the Fair Trade Commission No. 2012-25, Aug. 20, 2012; hereinafter “Public Notice of Penalty Surcharge before the amendment”) shall include the date of receipt of the report for the last three years (in cases of a violation, the date of ex officio investigation; hereinafter the same shall apply).

As seen earlier, the Fair Trade Commission’s imposition of a penalty surcharge against a legal violator is discretionary, and whether the past record of the violation is reflected in the amount of a penalty surcharge, and if reflected, to which extent the amount of a penalty surcharge is to be reflected belongs to the discretion of the Fair Trade Commission. Therefore, the standard for considering the records of the violation applied while imposing a penalty surcharge is unreasonable or arbitrary, and the imposition of a penalty surcharge based on such standard is not erroneous or arbitrary, and is contrary to the principle of proportionality and equality, it is difficult to deem that the imposition of a penalty surcharge is an unlawful act of deviating from or abusing the discretionary authority.

2) The lower court determined that the Defendant’s disposition not setting May 12, 2013 as “the base date for increasing the number of times of violation of the Act” did not constitute deviation from and abuse of discretionary power, on the grounds that the Defendant’s investigation of the tender of Pyeongtaek 22, 23 from May 2, 2013 to May 14, 2013, and did not find any particular suspected points through the data secured at the time, including the Plaintiff, on the ground that it was difficult to find out any specific suspicions through the data secured by the Plaintiff, etc., including the Plaintiff.

3) Such determination by the lower court is based on the legal doctrine as seen earlier. In so determining, 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 “the base date for increasing

B. As to the record of the cancellation of the litigation

1) Article 55-3(1) and (5) of the Fair Trade Act and Article 61(1) [Attachment 2] 2.2.b. (1) of the Enforcement Decree of the Fair Trade Act provide that “if the case in question is subject to a measure of violation of the Act (including the imposition of an administrative fine, but excluding the imposition of an administrative fine) on at least three occasions during the past three years, the calculation standards may be aggravated starting from four times as follows: (b) the above provision provides that “if the calculation of the number of times of the corrective measures is calculated, the calculation standards may be aggravated within the scope of 40/100” in cases where the total sum of the corrective measures is at least seven times during the past three years, and the calculation standards may be aggravated within the scope of 40/100”. Meanwhile, Article 61(1)(2) of the Enforcement Decree of the Fair Trade Act provides that “if the corrective measures are calculated, the calculation of the number of times of the corrective measures becomes final and conclusive.”

2) Whether an administrative disposition is unlawful shall be determined on the basis of statutes and facts at the time of the administrative disposition. The court shall determine the objective facts which existed at the time of disposition by integrating not only the materials known to the administrative agency at the time of the administrative disposition, but also all the materials submitted at the time of the closing of arguments at the fact-finding court, and determine the illegality of the disposition based on such facts (see Supreme Court Decision 2009Du11843, Jan. 14, 2010). If an administrative disposition was issued from the administrative agency but the administrative disposition was revoked in the course of administrative litigation, then the administrative disposition becomes retroactively effective at the time of disposition (see Supreme Court Decision 93Do277, Jun. 25, 199

Article 4.2.2.2.2.(2) of the former Public Notice of Penalty Surcharge before the amendment provides that a judgment of invalidation or revocation of a corrective measure shall be excluded when calculating the frequency of a corrective measure. In the calculation of a penalty surcharge, the other party to the disposition imposing a penalty surcharge, “where a judgment of revocation becomes final and conclusive on the ground that there is no itself,” which is the basis of increase in the number of times of the violation, will eventually increase penalty surcharges due to a violation, which does not exist objectively at the time of the disposition. Therefore, the disposition is likely to violate the principle

However, the Fair Trade Commission has the discretion to determine whether to impose penalty surcharges and the amount of penalty surcharges within the scope of the upper limit of penalty surcharges under the Fair Trade Act. In addition, Article 4.2.2.2.2.2.1 of the "Public Notice of Penalty Surcharges before the amendment", which is a discretionary rule, provides only the upper limit of the increased rate of penalty surcharges based on the frequency of violations and the accumulated points of penalty surcharges. Therefore, even if the cancellation judgment on corrective measures against violations is excluded from the calculation of the number of times to increase the number of violations, if the reason does not affect the imposition of penalty surcharges, and the legitimacy of the disposition is recognized as illegal (see Supreme Court Decision 2010Du15674, Dec. 9, 2010, etc.).

3) The reasoning of the lower judgment reveals the following facts.

① At the time of imposing penalty surcharges, the Defendant applied the aggravated rate of 20/100 based on the primary adjustment by the element of the act in calculating penalty surcharges on the ground that the sum total of penalty surcharges is 14.5 points for the Plaintiff at the time of imposing penalty surcharges for the last three years. At the time, the Defendant applied the aggravated rate of 15/100 by taking into account four times the number of violations of the Act and 10.5 points total sum total of penalty surcharges for the construction of the limited company.

② Measures due to the Plaintiff’s violation of the five-time law (three points) included the Defendant’s corrective order and imposition of penalty surcharges (hereinafter “advance action”). However, the Seoul High Court rendered a judgment revoking the preceding measures on the grounds that it is difficult to recognize the Plaintiff’s unfair collaborative act on August 24, 2016, after the date of the decision on the instant disposition ( June 20, 2016). The said judgment became final and conclusive after the dismissal of the appeal on December 27, 2016 by the Supreme Court (Supreme Court Decision 2016Du53098).

4) Examining these facts in light of the legal principles as seen earlier, even if the number of violations committed by the Plaintiff at the time of imposing penalty surcharges by the Defendant, excluding the number of violations committed by the Plaintiff, the Defendant’s application of the aggravated rate of 20/100 to the Plaintiff at the time of imposing penalty surcharges pursuant to Section 4.2.(b)(1)(b) is difficult to be deemed to be in violation of the principle of proportionality by applying the remarkably excessive aggravated rate of 20/100 to the Plaintiff at the time of imposing penalty surcharges. Furthermore, if prior measures are excluded from the number of violations of the Plaintiff’s law, the Plaintiff’s penalty surcharge points are 11.5 points, and thus, it cannot be deemed that the application of the aggravated rate of 20/100 to the Hansung Construction Co., Ltd. (15/100 increase rate), which is 10.5 points, is unreasonable, or that it is a remarkably excessive aggravated rate of penalty surcharges.

5) Although the reasoning of the lower judgment partially inappropriate, the lower court’s conclusion that the imposition of a penalty surcharge cannot be deemed unlawful as a matter of course even if the number of violations has decreased, is acceptable in light of the legal doctrine as seen earlier. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine

4. Whether the standard for calculation of penalty surcharge is unlawful (ground of appeal No. 4)

A. According to the language and text of Article 9(1) and Article 61(1) [Attachment 2] [Attachment 2] 2.A. 3] of the Enforcement Decree of the Fair Trade Act, with respect to “tender collusion and other acts similar thereto”, the amount calculated by multiplying the “contractual amount” by 10/100 shall be deemed the upper limit of penalty surcharges, and the said “contractual amount” shall be deemed the basic calculation basis for penalty surcharges. This likewise applies to not only the enterpriser who entered into a contract after receiving a successful bid by bidding collusion but also the enterpriser who has failed to receive a successful bid even though he participated in collusion with the contents of pre-determined the successful bid price or the prospective successful bidder (see, e.g., Supreme Court Decision 2016Du3360, Apr. 27, 2017). On the other hand, the notice of penalty surcharges amended on Oct. 7, 2015 (hereinafter referred to as “the calculation basis may be reduced by 5/10 or more of N-2).

B. The lower court determined that the Defendant’s determination of the Defendant’s notice of penalty surcharge as the number of joint contractors is without reasonable grounds, or that there was deviation or abuse of discretionary power, taking into account the following: (a) the Defendant’s basic criteria for calculating the penalty surcharge of this case, which is a bid collusion, included the Plaintiff’s contract amount in the construction sections participating in the bid bid. Furthermore, the lower court determined that the Defendant did not have any reasonable grounds for determining the N of the notice of penalty surcharge as the number of joint contractors, or that there was deviation or abuse of discretionary authority, in view of the fact that there is no possibility of mutual competition within the single joint contractors,

C. Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the record, the lower court did not err by misapprehending the legal doctrine regarding the standard of calculation of penalty surcharges or by failing to exhaust all necessary

5. Whether the mitigation rate is illegal (ground of appeal No. 5)

A. The court below determined that the Defendant’s application of reduction rate of 10% to representative companies and 30% to non-representatives is not reasonable or unreasonable on the grounds that the ratio of reduction of 10% to representative companies and 30% to non-representatives is not reasonable, on the grounds that the ratio of shares of a joint venture organization is equal, it cannot be deemed that there is no difference in the degree of profit or illegality enjoyed between representative companies and non-representatives.

B. Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine regarding violation of the principle of proportionality or by failing to exhaust all necessary deliberations.

6. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)