[2] The meaning of "relevant regional market" in determining whether a certain business entity is a market dominant position and the method of determining the scope of the market

[3] Requirements for recognizing the illegality of “act of trading to exclude a competitor” under the former part of Article 3-2(1)5 of the Monopoly Regulation and Fair Trade Act, and the standard for determining the illegality thereof

[4] Matters to be considered when determining the illegality of the act of offering conditional rebates as an exclusive dealing / Whether the standard for determining illegality applicable to the so-called “the so-called “the setting price” may be applied as it is to the act of offering conditional rebates (negative), and whether certification by the Fair Trade Commission is essential to prove the fact that the act of offering conditional rebates falls under the case where the offering of rebates at a price below expenses actually lower than expenses, based on the premise of the recognition of illegality (negative)

[5] In a case where the Fair Trade Commission issued an order to pay a single penalty surcharge in the appearance of several violations when it imposes a penalty surcharge on several violations, but there are data to calculate the amount of a penalty surcharge in the form of a single penalty surcharge only for some violations and for some violations in the lawsuit, whether only the part corresponding to the amount of the penalty surcharge for some violations should be revoked (affirmative)

In this context, the term “requirements not to deal with a competitor” includes cases where a market dominant business entity is established by an agreement with the opposite contractual party, rather than cases where the market dominant business entity is imposed unilaterally and compulsorily. In addition, the term “act of trading on the condition that the conditions are not traded with a competitor” is not limited to cases where the performance itself is legally enforced, but includes cases where the fulfillment of the conditions itself is practically subject to compulsory enforcement or binding force. Therefore, the case where the opposite contractual party is practically unable to make another choice without complying with the conditions, cannot be seen as naturally excluded. The reasons are as follows.

First, it is difficult to view that the language and text of the law is premised only on the case where a legal and contractual binding force is granted to comply with the conditions. Furthermore, there is no substantial difference in that, as a matter of course, a so-called “exclusive transaction contract” widely recognized as falling under the formal requirements of an exclusive dealing, a binding agreement which does not make a transaction with a competitor is concluded, and that there is only a difference between the case where a certain profit is provided without a transaction with a competitor, and where a certain disadvantage is given when a transaction is made in favor of a competitor, the provision of the benefit which is forced not to make a transaction with a competitor is made at any time and to any extent, and that there is no benefit or disadvantage already provided or to be

In addition, considering the legislative purpose of the law that regulates the abuse of market dominant position focusing on the competition-restricting effect, it is unreasonable to view the requirements for establishing exclusive dealing differently depending on whether compliance with the conditions is legally binding or binding by contract. Therefore, it cannot be deemed that the act of trading on the condition that it does not make any transaction with a competitor is a case where benefits are provided to the observance of the condition that does not make any transaction with a competitor, and thus, it does not fall under the “act of trading on the condition that it does not make any transaction with a competitor” formally.

[2] The relevant regional market refers to the geographical range in which generally competitive business entities are located, and specifically, in cases where the price in all other areas is a certain but meaningful price increase or price reduction to a certain extent only for a certain area, it refers to the whole area in which representative buyers or sellers can convert purchase or sale in response thereto. The scope of the market shall be determined by comprehensively taking into account the price and characteristics of the goods related to the transaction, the quantity of the seller’s production, business ability, transportation cost, purchaser’s awareness of the possibility of converting the purchasing area into the purchasing area, the seller’s awareness of the possibility of converting into the purchasing area, the seller’s management decision-making behavior related thereto, the easiness of converting into the purchasing area from time, economic and legal aspect, etc. In addition, the technological development speed, the situation of other goods necessary for the production of the related goods, and the market situation of other goods produced based on the related goods, etc. shall also be considered.

[3] The illegality of the "act of trading to exclude competition enterprisers" in the former part of Article 3-2 (1) 5 of the Monopoly Regulation and Fair Trade Act shall be interpreted in line with the legislative purpose of promoting competition in a monopoly or monopoly market. Thus, the illegality may be recognized when a market-dominating enterpriser has an intent or purpose to maintain and strengthen monopolys in the market, i.e., the intent or purpose to artificially affect the market order by restricting free competition in the market, and objectively, an act that may be evaluated as an act likely to cause the effect of such competition restriction, such as price increase, output reduction, innovation, decrease in the number of valuable competitors, and decrease in diversity. To this end, it should be proved that the act is likely to cause competition restriction at the time of the act, and if it is proved that the act has been actually affected by the act, the intent or purpose of restricting competition can be presumed to have been actually achieved, but it should be determined in full view of whether the act is likely to cause innovation or abuse of competition in the market and its related factors and contents, etc., if it does not change in the relevant market.

In this context, in determining the illegality of an exclusive dealing in light of the standard for determining illegality, the following should be comprehensively taken into account: (a) the degree of blocking or restricting the alternative purchasing place or distribution channel due to an exclusive dealing; or (b) the purchase conversion to a competitor’s goods; (c) details and conditions of the means used in the exclusive dealing in question; (d) details and degree of disadvantages incurred by the purchaser when the exclusive dealing is converted without complying with the terms and conditions of the exclusive dealing; (e) details and degree of the disadvantages incurred by the purchaser or the opportunity cost to be borne by the purchaser when the exclusive dealing is converted; (e) status of the offender in the market; (g) number of the other party subject to the exclusive dealing in an exclusive dealing; (e) market share; (g) the period during which the exclusive dealing was conducted; and (g) characteristics of the goods or services subject to the exclusive dealing

[4] In determining the illegality of a variety of conditional rebates offered as an exclusive dealing, taking into account the two-area characteristics of rebates and the standard for determining the illegality of an exclusive dealing, the following should be taken into account: (a) structure of rebates payment; (b) content and degree of rebates to be obtained by the transaction partner according to compliance with the terms and conditions of allocation; (c) content and degree of disadvantages to be borne by the transaction partner at the time of purchase conversion; (d) details and degree of disadvantages to the transaction partner at the time of purchase conversion; (e) trends of competitor business entities at the time of the offering of rebates; (e) whether a competitor business entity attempted to enter the market at the time of the offering of rebates; (f) the transaction partner’s response to the presentation of the conditions for the offering of rebates; (f) whether the transaction partner may become a potential competitor for the market-dominating business entity; and

Considering the negative effect caused by the act of offering conditional rebates, and the fact that such an act does not necessarily contribute to the increase of consumer welfare, and the balance with the fact that even if a long-term exclusive dealing contract constitutes an unfair exclusive dealing, it cannot be deemed that the benefit provided in return for the conclusion of the contract is below the cost, even in cases where the conclusion of the contract constitutes an unfair exclusive dealing, the act of offering conditional rebates, which is entirely different from the so-called “unfeasing price creation,” and the structure and context where such harm is entirely different from the structure and context of the negative effect, cannot be applied equally as such, and the standard of determining illegality applicable to the establishment of a weak price cannot be applied as it is. Therefore, under the premise of recognition of illegality, the fact that the offering of rebates is a case where the offering of rebates is made at a price below the actual cost, or that there was no obstacle to the competitor or the real competitor business entity having the same efficiency as the market dominant business entity to cope with the offering of rebates in terms of the price and cost.

Meanwhile, in order to verify the de facto binding force or illegality of the act of offering conditional rebates, a business operator may be recommended to increase the reliability of the decision using the above economic analysis. Furthermore, in ordinary cases, the business operator has the cost or cost-related data which serves as the basis of economic analysis, and the design method and purpose and intent of rebates. As such, in a situation where there is ambiguity or doubt related to the accuracy of economic analysis or the reliability and accuracy of the basic data used in economic analysis, the business operator may evade a reasonable proof of compliance with the Fair Trade Commission with regard to the de facto binding force or illegality of the act of offering conditional rebates by proving the credibility of such basic data or method of analysis.

[5] In a case where the Fair Trade Commission orders a single penalty surcharge for multiple violations when it imposes a penalty surcharge for a single violation, but only the imposition of a penalty surcharge for a part of multiple violations is illegal and the amount of a penalty surcharge can be calculated based on a part of such violations in a lawsuit, the portion corresponding to the amount of a penalty surcharge for a part of such violations shall be revoked even if one order for payment of a penalty surcharge is issued.

1. As to Plaintiff Qualcomm’s ground of appeal

A. As to the elements for establishing an exclusive dealing

(1) The former part of Article 3-2(1)5 of the Monopoly Regulation and Fair Trade Act (hereinafter “the Act”) provides for “an act of unfairly excluding competitors” as an abuse of market dominant position by a market dominant enterpriser, and Article 5(5)2 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act provides for “an act of unfairly excluding competitors,” as one of the acts, where a transaction partner makes a transaction with a competitor on the condition that the transaction partner does not make a transaction with a competitor.”

In this context, the term “requirements not to deal with a competitor” includes cases where a market dominant business entity is established by an agreement with the opposite contractual party, rather than cases where the market dominant business entity is imposed unilaterally and compulsorily. In addition, the term “act of trading on the condition that it does not deal with a competitor business entity” is not limited to cases where the fulfillment of the conditions itself is legally enforced, but includes cases where the fulfillment of the conditions is de facto forced or binding. Therefore, the case where the opposite contractual party is practically unable to make another choice without complying with the conditions, cannot be seen as naturally excluded. The reasons are as follows.

First, it is difficult to view that the language and text of the law is premised only on the case where a legal and contractual binding force is granted to comply with the said terms and conditions. Furthermore, there is no substantial difference in that, as a matter of course, a so-called “exclusive transaction contract” widely recognized as falling under the formal requirements of an exclusive dealing, a binding agreement which does not make a transaction with a competitor is concluded, and that there is only a difference between the case where a certain profit is provided without a transaction with a competitor, and where a certain disadvantage is given when a transaction is made in favor of a competitor, a certain disadvantage is provided, and there is only a difference between the case where a certain benefit is provided and a certain disadvantage is provided to prevent a transaction with a competitor at any time, and

Therefore, in addition, considering the legislative purpose of the law that regulates the abuse of market dominant position focusing on the competition-restricting effect, it is unreasonable to view the requirements for establishing exclusive dealing depending on whether compliance with the conditions is legally binding or binding by contract. Therefore, it is unreasonable to view the requirements for establishing exclusive dealing differently depending on whether the conditions are complied with. Therefore, it cannot be deemed that the act of trading on the condition that it does not make any transaction with a competitor becomes de facto compulsory or binding by offering any benefit to comply with the condition that does not make any transaction with a competitor business entity, and thus, does not fall under the category

(2) The lower court determined that Plaintiff Qualcomm Incorporated (hereinafter “Plaintiff Qualcomm”)’s act of offering rebates to domestic mobile phone manufacturers on the condition that they do not trade with competitors is binding, and thus, it constitutes “where the other party to the transaction makes a transaction with the other party on the condition that he does not trade with competitors.”

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and circumstances revealed in the record, the lower court’s determination is justifiable. In so determining, it did not err by misapprehending the legal doctrine regarding the formal requirements for exclusive dealing, which is an abuse of market dominant position, and the coercion of conditions or binding force, etc

B. As to the determination of the relevant regional market

(1) The relevant regional market refers to a geographical range in which business operators in general compete with each other. Specifically, the price in all other areas refers to the whole area in which a significant increase or decrease in price can be converted to purchase or sale in response to the price increase or decrease in a certain area. The scope of the market shall be determined by comprehensively taking into account the price and characteristics of the goods related to the transaction, the quantity of the seller’s production, business ability, transportation cost, purchaser’s awareness of the possibility of transition to the purchasing area, the seller’s purchase price conversion behavior related thereto, the seller’s awareness of the possibility of transition to the purchasing area, the easiness of transition to the purchasing area from time, economic and legal perspective, etc. In addition, the technological development speed, the situation of the market on other goods necessary for the production of the related goods, and other goods produced based on the related goods, etc. shall also be considered (see, e.g., Supreme Court en banc Decision 2002Du8626, Nov. 22, 2007).

(2) The lower court: (a) deemed that there was no illegality in the Defendant’s measure regarding the relevant regional market for Plaintiff Qualcomm’s offering of conditional rebates as the domestic supply market of the CD200 chips and the domestic supply market of the RF chips; (b) even if the relevant regional market is demarcated as a global market, there was no problem in recognizing Plaintiff Qualcomm’s market dominant position in the relevant market; and (c) insofar as the listed market intended to be obstructed by the abuse of its position is the domestic supply market for the gather chips and RF chips, the lower court determined that it was sufficient to assess whether competition was restricted based on the relevant

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court’s determination is acceptable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on

C. As to whether to recognize illegality

(1) Relevant legal principles

(A) The illegality of “act of trading to exclude competition enterprisers” in the former part of Article 3-2(1)5 of the Act should be interpreted in line with the legislative purpose of promoting competition in a monopoly or monopoly market. Thus, the illegality may be recognized when a market-dominating business entity has an intent or purpose to artificially affect the market order by restricting free competition in the market, i.e., the intent or purpose to artificially restrict competition in the market, and objectively, an act that may be evaluated as an act that could have an effect of restricting competition. To this end, it should be proved that the act is likely to have an effect of restricting competition, such as price increase, calculated volume, decrease, innovation, decrease in the number of competitive enterprisers, decrease in diversity, and that there was an intention or purpose to act. If it is proved that the above act has been effective, it is likely to cause competition at the time of the act, and its intent or purpose can be presumed that there is an intention or purpose to act, i.e., the intent or purpose of restricting competition in the market.

In order to specifically determine illegality in light of the standard for determining illegality as to whether an exclusive dealing was unfair, the following should be comprehensively taken into account: (a) the degree of the degree of blocking or restricting the alternative purchase place or distribution channel due to an exclusive dealing; or (b) the purchase conversion to a competitor’s goods; (c) details and conditions of the means used in the exclusive dealing; (d) details and degree of disadvantages incurred by a buyer when a purchase is converted without complying with the terms and conditions of the exclusive dealing; (e) details and degree of the disadvantages that a buyer would incur or the opportunity cost to lose when a purchase is converted; (d) status of an offender in the market; (e) number of other exclusive dealing partners subject to an exclusive dealing and market share; (e) duration of the exclusive dealing; and the characteristic of the goods or services subject to an exclusive dealing; (e) intent and purpose of the exclusive dealing; (e) degree of

(B) Meanwhile, the price is one of the most important factors that the buyer considers in determining whether to purchase the goods or services, and is the most basic means of competition in the market economy system. Competition between competitors may benefit both the other party to the transaction and the general consumers, so free price competition in the market should be generally protected. However, the offering of rebates may not only benefit the other party in a short-term manner, but also benefit the final consumer. This is also similar to the price reduction, and therefore it is not easy to distinguish it from the normal means of competition such as the general price discount. From this perspective, the act of offering conditional rebates by a market-dominating enterpriser itself cannot be readily concluded to be unlawful.

On the other hand, competition-restricting effects may also increase depending on the conditions, contents, and form of rebates offered by a market-dominating business entity. For example, when the rebates is included in “ex post facto and small level rebates” which is offered after fulfillment of the conditions, and the benefits therefrom are increased to “satisfy” in proportion to the purchase quantity, and the effect of restricting and blocking the purchase conversion is growing. Accordingly, competition-restricting effects arising from conditional rebates may also increase. Furthermore, rather than simply offering rebates corresponding to a certain purchase quantity, if a purchaser compels a purchaser to purchase a certain percentage of the purchase quantity purchased at the entire market for a specific period, rather than offering rebates to a purchaser, the competition-restricting effect may be greater. Moreover, as seen thereafter, if a market-dominating business entity, which holds standard technology, provides economic benefits to the purchase of specific goods or services in return for compliance with the terms and conditions of distribution, and at the same time reduces user fees for standard technology, etc., if multiple economic benefits are provided, then the purchaser’s reasonable choice may be distorted, and the effect of restricting and blocking the purchase conversion is greater.

(C) As above, when determining the illegality of an act of offering various forms of conditional rebates as the above exclusive dealing, the following should be taken into account: (a) structure of rebates payment; (b) content and degree of rebates to be obtained by the transaction partner according to compliance with the terms and conditions of the rebates; (c) content and degree of disadvantages the transaction partner should bear at the time of purchase conversion; (d) details and degree of disadvantages the transaction partner should take into account at the time of purchase conversion; (e) trends of competitor business entities at the time of the offering of rebates; (e) whether a competitor business entity attempted to enter the market; (e) whether the conditions of the offering of rebates were attempted to enter the market; (g) whether the transaction partner’s response to the offering of rebates; (g) whether the transaction partner may become a potential competitor against the market-dominating business entity with respect to the goods and services for which rebates were offered; and (g) the effect of cost

(D) Considering the negative effects caused by the act of offering conditional rebates as seen earlier, and the fact that such act does not necessarily contribute to the increase of consumer welfare, and the balance with the fact that even if a long-term exclusive dealing contract constitutes an unfair exclusive dealing, it cannot be deemed that the benefit provided in return for the conclusion of the contract is below the cost, even in cases where the contract constitutes an unfair exclusive dealing by concluding the contract, the act of offering conditional rebates, which is entirely different from the so-called “explosive price creation,” may not be deemed equally applied to the act of offering conditional rebates in comparison with the structure and context where the harm is generated, and as such, the standard of determining illegality applicable to the establishment of the explosive price cannot be applied. Therefore, on the premise of such recognition of illegality, the fact that the offering of rebates falls under the case of the sale of rebates at a price below the cost, or that there is no obstacle to the competitor or the actual competitor with the same efficiency as the market-dominating enterpriser in terms of the price and cost, there is no need to prove it through an accounting and economic analysis (hereinafter “economic analysis”).

Meanwhile, in order to verify the de facto binding force or illegality of the act of offering conditional rebates, a business operator may be recommended to increase the reliability of the decision using the above economic analysis. Furthermore, in ordinary cases, the business operator has the cost or cost-related data which serves as the basis for economic analysis, and the design method and purpose and intent of rebates. As such, in a situation where there is ambiguity or doubt related to the accuracy or accuracy of economic analysis or the reliability and accuracy of the basic data used for economic analysis, the business operator may evade the reasonable proof of the business operator’s response to the actual binding force or illegality of the act of offering conditional rebates by proving the credibility of such basic data or method of analysis.

(2) Whether the illegality is recognized in the domestic CD200 chip market

(A) The lower court acknowledged the following facts based on the adopted evidence.

① On July 1, 200, Plaintiff Qualcomm entered into a new contract agreement with ELE Co., Ltd. (hereinafter “ELE”), which is a domestic mobile phone manufacturer, and offered conditional rebates for the purchase of the fake chips (hereinafter “p rebates”). The main terms and conditions were “where ELE purchases from Plaintiff Qualcomm at least 85% of the total demand for the same chips, at least 650,000 per annum, and purchases at least 55% of the total demand for the PE/RF chips, at least KRW 3570,00 per year, and a maximum of 20 million dollars shall be paid.” This was modified on or after July 1, 2004, and the content was “85% of the total demand for all quarterly chips, 95%, 95%, and 75% or more of the total demand for the purchase of chips, and each of the terms and conditions for the purchase of chips were calculated by multiplying the total purchase rate of chips.”

② On May 18, 199, Plaintiff Qualcomm entered into an agreement with Samsung Electronic Co., Ltd. (hereinafter “Ssung”) and made a royalty discounts from October 1, 1999 to September 30, 2003. The major condition was that “If Samsung Electronic purchases at least KRW 8 million from Plaintiff Qualcomm when it sells mobile phones in excess of 60% of the total demand for all quarterly chips, and at least 10 million when it sells mobile phones in excess of KRW 10 million, Plaintiff Qualcomm shall discount the royalty equivalent to USD 5 million per quarter according to the percentage of the purchase of chips” (hereinafter “199”). < Amended by Presidential Decree No. 17093, Oct. 1, 199>

③ On September 27, 2004, Plaintiff Qualcomm concluded a new contract with Samsung Electronic and offered the rebates of the fake chips. In addition, the major condition was that “If Samsung Electronic purchases from Plaintiff Qualcomm at least 70% of the total demand for the CD standard chips on a quarterly basis and at least 5 million won, Plaintiff Qualcomm shall be paid rebates of at least 4.5 million dollars per quarter according to the purchase volume and purchase ratio, and at least 10 million dollars per quarter. If Plaintiff Qualcomm purchases at least 80% of the total demand for the CD200 method chips, it shall be additionally paid USD 2.5 million per quarter during the first year.” In addition, from July 1, 2005 to December 31, 2005, Samsung Electronic paid at least 95% of the total demand for the CD chips from Plaintiff Qualcomm’s entire association purchase of at least 2.5% of the purchase price of Plaintiff Qualcomm chips on the condition that it purchases at least 95% of its total purchase from Plaintiff Qualcomm 20.

④ 원고 퀄컴은 2004. 4. 1. 엘지전자, 삼성전자, 주식회사 팬택앤큐리텔(이하 ‘팬택’이라고 한다)과 원고 퀄컴이 보유한 CDMA 기술에 관한 라이선스를 제공하기로 하는 종전 라이선스 계약 내용을 일부 수정하는 계약을 체결하였다. 수정계약에서는 내수용 휴대폰의 로열티 산정 기준이 되는 휴대폰 최종 판매가격에서 휴대폰 제조사가 원고 퀄컴으로부터 구매하여 장착한 부품들의 가격은 공제한다는 종전 계약 내용이 그대로 유지되었다. 그리고 원고 퀄컴의 모뎀칩을 장착한 수출용 휴대폰에 대하여, 엘지전자와 삼성전자에는 종전 로열티 부과율 5.75%를 5%로 인하하고 팬택에는 분기별 판매량에 따라 5.0~6.5%로 적용하되 분기당 판매량이 10만 대를 초과하면 5.0%를 적용하기로 하였다. 또한 휴대폰 1대당 로열티 상한금액을 원고 퀄컴의 모뎀칩을 장착한 휴대폰은 20달러, 다른 사업자의 모뎀칩을 장착한 휴대폰은 30달러로 정하여 차이를 두었다(이하 ‘로열티 할인 병행행위’라고 한다). 이와 같이 원고 퀄컴은 2004. 4. 1.부터 2009. 7. 15.까지 엘지전자와 삼성전자가 원고 퀄컴의 모뎀칩을 장착하기로 선택하면, 다른 사업자의 모뎀칩을 장착하기로 선택한 경우보다 로열티 중 일정 금액을 아울러 할인해 주었다.

⑤ During the period from 2002 to 2008, Plaintiff Qualcomm’s domestic market share in the sale of CD200 chips was approximately KRW 98-100 to KRW 98-100.

④ The price difference between Plaintiff Qualcomm’s Com chips and VIA chips in the low-end product group around 2004 and 2005 was about KRW 1-2 per unit.

④ The overseas market share of the VMA mode chips, one of the competitors of Plaintiff Qualcomm, increased from 1.5% in 2004 to 11.5% in 2009. During the same period, the domestic market share of Plaintiff Qualcomm’s CD method chips was approximately KRW 99-100%. The ratio of Plaintiff Qualcomm electronic and Samsung Electronic chips used by the competitor was reduced after the second half of 2004.

① Plaintiff Qualcomm analyzed the effect of the offering of the fake chip rebates internally, which was the content that, if the other party to the transaction purchases and converts the amount at least a certain percentage of the demand for the rebates to a competitor, the amount calculated according to the said rebates would be an opportunity cost and hinder the purchase conversion.

9) After the mobile phone manufacturer paid the original price and purchased the chips, the mobile phone manufacturer received rebates after meeting the condition that he would purchase more than a certain portion of the demand for the chips from Plaintiff Qualcomm. The price of the chips determined between Plaintiff Qualcomm and the mobile phone manufacturer was subsequently consulted on the premise that the rebates would be offered later, and the mobile phone manufacturer could not receive rebates because the mobile phone manufacturer failed to meet the conditions, the loss of the opportunity cost therefrom was practically a considerable monetary sanction.

(B) On the premise of the aforementioned factual basis, the lower court determined that the illegality was recognized on the ground that: (a) the act of offering the fake chip rebates was an “exclusive dealing” that was traded on the condition that the other party does not trade with the business entity using the CD200 method chip business entity; (b) constituted an act that is likely to have the anti-competitive effect in the domestic market of the CD200 method chips chip market; and (c) Plaintiff Qualcomm had the intent and purpose of restricting competition, along with the awareness of such

(C) ① The rebates of the circular chip with respect to ELS is demanded to meet the purchase ratio of the RF chip, which is the other goods distinct from the market in question. ② The use ratio of the competitor’s chip by Plaintiff Qualcomm and Samsung Electronic, before and after the time when the rebates was offered, appears to have been relatively clear. ③ Even if according to the economic analysis result submitted by Plaintiff Qualcomm, the “effective price” of the fake chip is observed within the range of less than the average total cost or the long-term average cost, and ④ relevant materials such as economic analysis, etc. are difficult to determine that the Defendant’s proof of illegality, etc. was reached the right angle, and ⑤ In addition to the records, it is difficult to find out the circumstances that Plaintiff Qualcomm offered rebates contributed to the improvement of consumer welfare by lowering the mobile phone consumer price due to the rebates offered by Plaintiff Qualcomm, etc., or that it did not err in the judgment of the court below regarding the abuse of market dominant position beyond the bounds of the principle of free evaluation of evidence in light of the aforementioned legal principles.

(3) Whether the illegality is recognized in the domestic RF chip market

(A) As to the offering of conditional rebates on the purchase of RF chips (hereinafter “RF chip rebates”) during the period from July 1, 2005 to December 31, 2006

In addition to the facts acknowledged earlier, the lower court acknowledged the following facts: ① Plaintiff Qualcomm offered the rebates for about nine (9) years from July 1, 200 to July 15, 2009 on the LF chip rebates to LW; ② Plaintiff Qualcomm demanded that the purchase rate of the RF chip to be met in addition to the purchase rate of the RF chip as a condition for payment; further, Plaintiff Qualcomm offered the rebates for the offering of rebates for each RF chip rebates from July 1, 2005 to June 30, 2006; ② Plaintiff Qualcomm offered the rebates for the offering of rebates from July 1, 2005 to July 16, 2005 to the respective installation rates calculated by subdividing into RFR, RFT, and RF chip; ③ Plaintiff Qualcomm offered the rebates for the offering of rebates for most similar terms and conditions from July 1, 2005 to June 30, 2006.

On the premise of such factual basis, the lower court determined that Plaintiff Qualcomm’s exclusive dealing in the RF chip market during the pertinent period, caused the market chain effect, thereby preventing competitors from entering the market, and, based on the fact that mobile phone manufacturers and consumers were given the opportunity to choose, and the diversity of products was reduced, the lower court recognized the restriction on competition and the illegality thereof.

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the illegality of an exclusive dealing, or by exceeding the bounds of the principle of free evaluation of evidence.

(B) As to the period from July 1, 2000 to June 30, 2005 and from January 1, 2007 to July 15, 2009, for which Plaintiff Qualcomm offered rebates for the rebates chip rebates only to El Electronic

① The lower court: (a) premised on the premise that the domestic CD200 mobile phone manufacturing market was an excessive system with a market share of at least 40% of the market share of ELE and Samsung electronics respectively; and (b) based on Plaintiff Qualcomm’s offering the rebates to ELE during the said period, the Plaintiff Qualcomm’s monopolyed the supply of ELB to ELE; and (c) the Plaintiff’s act also recognized the illegality of the act.

② However, the evidence duly admitted reveals the following: (a) the share of the mobile phone sales market in the way of ELB00 in 2006-208 was approximately KRW 21.6% or KRW 25.9%; (b) the use rate of Samsung electronic chips was increased during the period in which the conditional rebates was offered only to ELW; (c) Plaintiff Qualcomm’s domestic market share in the market of MA2000-RF chips from 91.4% in 2002 to 7.1% in 2004; and (d) thereafter, the market share in the market of PE200-200-207 to 83.5% in 2006, 71.5% in 2007, and 2008 to 71.2% in 2008. Furthermore, the Defendant asserted that the Plaintiff had no problem with the offering of rebates 40% in the form of a clerical error.

③ On the other hand, the lower court’s premise is without merit to deem that “ELW has a market share of at least 40% in the domestic RF chip manufacturing market.” Inasmuch as such premise was erroneous, it cannot be readily concluded that the offer of rebates to LF chip to LF would have been effective at least 40% in the domestic market. In addition, taking into account the circumstances cited by the lower court in accordance with the legal doctrine as seen earlier and the evidence duly adopted and the record, it is difficult to deem that the said offering of rebates would have a risk of restricting competition in the domestic MF chi market as a whole or unfair. Even if LF chi takes the share of at least 40% in the domestic RF chi market, it is difficult to readily conclude that the Plaintiff’s offering of rebates chip rebates’s offering of rebates chip rebates with the entire market share of at least 40%, and in light of the aforementioned circumstances, it is difficult to conclude that the Plaintiff’s offering of rebates chip’s offering of rebates to Plaintiff Qualcomm.

④ Nevertheless, the lower court determined otherwise, that the restriction on competition and illegality with respect to the provision of the said RF chip rebates were recognized. In so determining, the lower court erred by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, failing to exhaust all necessary deliberations, and by misapprehending the legal doctrine on the illegality of an exclusive dealing. The allegation contained in the grounds of appeal by Plaintiff Qualcomm

D. As to the corrective order related to the act of royalty discounts concurrently

(1) According to the reasoning of the lower judgment, the following circumstances are revealed.

(A) The Defendant issued a corrective order that “1. The Plaintiffs, while allowing domestic mobile phone manufacturers to use patent technology related to the standards for the CD mobile communications, shall not impose unfairly discriminative royalties on the following methods to make it difficult for other enterprisers to carry out their business activities.” Moreover, the Defendant presented the following specific methods.

① The method of applying the higher royalty imposition rate compared to the cell phone fitted with the Plaintiffs’ CD200 chips with respect to the cell phone fitted with the CD200 chips by business operators other than the Plaintiffs (the foregoing corrective order 1.B.)

② The method of setting the upper limit on the royalties imposed only on the mobile phones that installed the Plaintiffs’ CD200 chips, or setting the higher upper limit on the mobile phones that installed the Plaintiffs’ CD200 chips compared to the mobile phones that installed the Plaintiffs’ CD200 chips (the foregoing corrective order 1.c.).

(B) According to the Defendant’s disposition, in determining the illegality of an exclusive dealing with the purchase of chips, the Defendant also considered the effect of the said royalty discounts, and did not impose a separate penalty surcharge relating to the parallel act of royalty discounts.

(2) In addition to these circumstances and the overall purport of the Defendant’s written disposition in light of the legal principles as seen earlier, it is reasonable to view the meaning and legality of the corrective order related to the parallel act of royalty discounts as follows.

(A) In principle, when an administrative agency takes a disposition by means of a document, it shall determine the ordinary meaning of the language and text of the written disposition and what disposition is in accordance with the overall content, connection, and purport of the written disposition (see Supreme Court Decision 2016Du4186, Aug. 29, 2017, etc.).

(B) In light of the facts in the instant case and the overall purport of the Defendant’s disposition, the said corrective order merely indicates that when a market-dominating enterpriser, who holds standard technology, engaged in an exclusive transaction with regard to the purchase of chips and provides royalties together with the delivery of royalties, the said discount benefits may be granted differently depending on whether the conditions are met. Ultimately, the aforementioned corrective order explicitly states that the act of offering rebates on condition of “the domestic supply market of the CD200 chips” is prohibited, such as the act of offering rebates on condition of the purchase of chips and the concurrent act of conditional royalty discounts on condition that “the domestic supply market of the CD200 chips” is prohibited. Although the Defendant, in relation to the instant part, uses Article 3-2(1)3 of the Act, Article 5(3)4 of the Enforcement Decree of the Act, and Article 4.3.4(d)(2) of the Standards for the Examination of Market-dominating Status Abuse Act, etc. However, this is merely the purport of asserting that the said concurrent act may additionally fall under the above provision.

(C) Therefore, the above corrective order is lawful inasmuch as a series of acts and the illegality thereof are recognized, such as the royalty discounts on condition of the distribution and the price discounts of the cap chips, which were taken in relation to the purchase of the cap chips as seen earlier.

(3) Ultimately, the lower court erred by viewing the relevant product market related to the parallel act of royalty discounts, which is the act subject to the said corrective order, as the “market that provides the CD standard technology owned by Plaintiff Qualcomm,” and in that it deemed that the act of discriminatinging the price against the opposite contractual party in the relevant market was established, but the conclusion that the said corrective order was lawful is justifiable.

E. As to the payment order of penalty surcharges on the offering of the chip rebates

(1) As to the calculation of the pertinent sales

The lower court determined that the Defendant’s measures that calculated the entire sales amount of Plaintiff Qualcomm’s sales amount from July 1, 200 to July 15, 2009, on the following grounds: (a) the sales amount of the CD200 chips sold by Plaintiff Qualcomm Qualcomm to other trading partners than LbE is also included in the relevant sales amount; and (b) Plaintiff Qualcomm’s rebates offered both low-end product group and high-end product group without distinguishing the sales amount of all the CD200 chips; (c) the sales amount of the CD200 chips purchased from the domestic market was directly or indirectly affected; and (d) the sales amount of the CD200 chips totaled from July 1, 200 to July 15, 209, deeming that all the sales amount of the CD200 chips purchased from the domestic market constituted the sales amount of the relevant goods.

In light of the relevant legal principles and records, the above determination by the court below is just, and there is no error by misapprehending the legal principles on the calculation of related sales.

(2) As to the calculation of the imposition standard rate

In light of the fact that Plaintiff Qualcomm’s act is highly likely to exclude competitors or to offset the market price, its effect is discharged from Korea, and Plaintiff Qualcomm’s average annual sales amount of at least KRW 100 million, the lower court determined that the Defendant’s measure was lawful by deeming Plaintiff Qualcomm’s act as “an act of significant violation” and calculated the imposition standard rate.

In light of the relevant legal principles and records, the above determination by the court below is just, and there is no error by misapprehending the legal principles on deviation and abuse of discretion in the imposition of penalty surcharges.

(3) As to the aggravation and mitigation of penalty surcharges

The lower court determined that there was no illegality in the Defendant’s measure that did not additionally reduce the penalty surcharge on the ground that Plaintiff Qualcomm’s high power delegated personnel directly participated in the violation, on the ground that there was no violation of the Defendant’s measure that aggravated the mandatory adjustment penalty surcharge of 10%, and Plaintiff Qualcomm did not actively cooperate in the Defendant’s investigation, and that Plaintiff Qualcomm’s actual ability to bear the expenses, the effect of the violation on the market, and the social strike, etc. do not seem to have been significantly excessive.

In light of the relevant legal principles and records, the above determination by the court below is just, and there is no error by misapprehending the legal principles on deviation and abuse of discretion in the imposition of penalty surcharges.

2. As to the Defendant’s ground of appeal

The lower court determined that the Defendant’s corrective order against Qualcomm and QCK was unlawful on the ground that: (a) both Plaintiff Qualcomm’s act of offering the fake chip rebates and the RF chip rebates (hereinafter “instant violation”) was based on a contract entered into by Plaintiff Qualcomm with the mobile phone manufacturer; (b) Plaintiff Qualcomm was also Plaintiff Qualcomm; (c) Plaintiff Qualcomm Korea Ltd. (hereinafter “Korea Qualcomm”); and Plaintiff Qualcomm Korea Ltd. (hereinafter “ QCTK”) were not in the position to commit the instant violation; and (d) it was difficult to deem that there was a concern that Korea Qualcomm and QCK might independently commit the instant violation in the near future; and (c) there were no other circumstances to deem it necessary to take corrective measures against Korea Qualcomm and QCK as well.

In light of the relevant legal principles and records, the judgment of the court below is just, and there is no error in the misapprehension of the legal principles as to corrective order under Article 5 of the Act.

3. Scope of reversal

A. Part of the corrective order

(1) The part of the corrective order relating to the royalty discounts is legitimate as seen earlier.

(2) Furthermore, the lower court erred by concluding that Plaintiff Qualcomm’s offering of conditional rebates to LF chips from July 1, 2005 to December 31, 2006 constitutes “an act of trading to unfairly exclude competitors,” and the part of the Defendant’s corrective order ordering the prohibition of such an act is lawful. Therefore, the lower court’s error did not adversely affect the conclusion of the lower court as to the illegality of this part of the corrective order.

B. Part of the penalty surcharge payment order

(1) In a case where the Fair Trade Commission orders a single penalty surcharge for multiple violations when it imposes a penalty surcharge for multiple violations, but only the imposition of a penalty surcharge for some violations is illegal and the amount of a penalty surcharge can be calculated based on a certain violation in a lawsuit, the part corresponding to the amount of a penalty surcharge for some violations should be revoked even if one order for payment is issued (see Supreme Court Decisions 2004Du1483, Dec. 22, 2006; 2009Du1218, Oct. 29, 2009, etc.).

(2) According to the records, the Defendant ordered Plaintiff Qualcomm to pay a penalty surcharge against Plaintiff Qualcomm, and subsequently ordered Plaintiff Qualcomm to pay a penalty surcharge against the act of offering the royalty discount and the rebates of the cap chip rebates, which occurred from July 1, 200 to July 15, 2009, during the period from July 1, 2009, for which Plaintiff Qualcomm’s domestic CD200 method chip rebates was offered. Plaintiff Qualcomm’s domestic sales of the CD200 method chip, which occurred during the said period, were calculated as relevant sales, as the sum of the sales of Plaintiff Qualcomm’s domestic CD200 method chip, which occurred during the said period, as the sum of each relevant sales, and finally, by applying the same imposition rate and the increase of mandatory adjustment penalty surcharge.

(3) We examine the legal principles as seen earlier. First, as seen earlier, the order to pay a penalty surcharge for the act of offering royalty discounts and the cap chip rebates is lawful, and there are materials that can calculate the penalty surcharge for such act among the amount of the penalty surcharge in the instant case, the order to pay a penalty surcharge in this part may not be revoked. On the other hand, as seen earlier, Plaintiff Qualcomm’s violation on the period during which the rebates was offered only to LF chip rebates, is not recognized, and the order to pay a penalty surcharge for one offense is discretionary, and thus, the order to pay a penalty surcharge for the act of offering the royalty chip rebates ought to be entirely revoked.

Ultimately, the judgment of the court below on the imposition of a penalty surcharge on the offering of rebates chips is unlawful.

4. Conclusion

Therefore, without further proceeding to decide on Plaintiff Qualcomm’s remaining grounds of appeal, the part of the lower judgment against Plaintiff Qualcomm regarding the payment order of penalty surcharges on the act of offering rebates chip rebates is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The remainder of Plaintiff Qualcomm’s remaining appeals and the Defendant’s appeals are all dismissed. Of the costs of appeal, the Defendant’s appeal against Plaintiff Qualcomm Korea and QTK is assessed against the Defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)