[2] The method of determining the illegality of an abuse of market dominant position, which is an abuse of market dominant position

[3] The case holding that a chemical fertilizer purchase project for food crops cannot be deemed as a "project deemed reasonable to restrict competition" or "project for which a business operator's exclusive status is guaranteed by the authorization system, etc." due to its unique nature

[4] The elements required for an enterprisers' association to constitute a non-applicable partnership under Article 60 of the former Monopoly Regulation and Fair Trade Act

[2] The illegality of an exclusive transaction as an abuse of market dominant position should be determined by comprehensively taking into account various circumstances, such as the purpose and form of the transaction, the market share of the market dominant enterpriser, the degree of blocking the market-dominating opportunity to enter or expand the market, whether to increase expenses, the period of the transaction, whether to change the price and output in the related market, similar goods and the neighboring market, whether to exist, and whether to reduce innovation and diversity. However, since an exclusive transaction as an abuse of market dominant position is conducted with the other party on the condition that the other party does not make any transaction with the competitor, there are many cases where it can be deemed that such an act itself includes the purpose of restricting competition.

[3] The case holding that since any Act or subordinate statute such as Article 134 of the Agricultural Cooperatives Act, Article 7 of the Fertilizer Control Act, and the Minister of Agriculture and Forestry's supply and demand plan for fertilizers is deemed reasonable to restrict competition, it cannot be deemed as a business that guarantees the exclusive status of the National Agricultural Cooperative Federation, or it does not contain any content that guarantees the exclusive status of the National Agricultural Cooperative Federation or specific recognition of the exception of free competition in light of the necessity of high level public regulation, and thus, it cannot be deemed that the chemical fertilizer purchase business for food crops is a business that guarantees the exclusive status of the business operator

[4] In order for an enterprisers' association to fall under an exception of the law as stipulated in Article 60 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 8382 of Apr. 13, 2007), the enterprisers' association should be composed only of small-scale enterprisers, and persons other than small-scale enterprisers should not join the association. A small-scale enterprisers as stipulated in Article 60 of the above Act should be included in the size that needs to be simplified in order to negotiate on an equal basis with large enterprises.

1. As to the third ground for appeal

The lower court, based on its adopted evidence, found the facts as indicated in its reasoning, and determined that since chemical fertilizers for food crops are mainly spent on crops, such as rice plants, etc., compared to the fact that chemical fertilizers for food crops are spent on fruit trees and horticultural crops, it is difficult to view that two products are identical in the same market because their respective ingredients and utility are different, and that the Plaintiff cannot classify the fertilizer distribution market by the Plaintiff and the fertilizer distribution market by the ordinary market as different markets solely on the ground that the Plaintiff is a non-profit corporation.

In light of the records, the above judgment of the court below is justifiable.

The court below did not err in the misapprehension of legal principles or omission of judgment as to the determination of related markets as otherwise alleged in the ground of appeal.

2. Regarding ground of appeal No. 1

The lower court, based on its adopted evidence, found the facts as indicated in its reasoning, and determined that: (a) around 1987, the measures to liberalize the sale of fertilizers by the previous plaintiff were abolished; (b) the acquisition system of fertilizers by the previous plaintiff was converted into an autonomous sales system; and (c) since that time, the distribution of fertilizers was made through the agricultural cooperative system (the Plaintiff and unit cooperatives), the general market (the business offices, sales agencies, etc. of fertilizers manufacturers) and the general market; and (d) the price of raw materials was so wide as to cover losses equivalent to approximately 25% of the sales price for food fertilizers purchased through the plaintiff for the purpose of stabilizing the supply of and demand for fertilizers; and (b) the government completely reduced the price subsidization for food crops from around 2003 to 205 to 2005 to 300 to 200 to 30 to 25 to 30 to 30 to 20 to 30 to 20 to 30 to 20 to 30 to m chemical fertilizers.

In light of the records, the above fact-finding and judgment of the court below are justifiable.

The court below did not err in the misapprehension of the rules of evidence as to the establishment of a competition relationship in the market.

3. Regarding ground of appeal No. 2

The lower court determined that the Plaintiff constitutes a market dominant enterpriser that can determine, maintain, or change terms and conditions of transaction, such as price, quantity, etc. in the distribution market of chemical fertilizers for food crops, on the grounds that, even after the government’s price subsidization on chemical fertilizers for food crops was completely abolished on July 2005, the Plaintiff still has a market share equivalent to 100% in the distribution market of chemical fertilizers for food crops.

In light of the records, the above fact-finding and judgment of the court below are justifiable.

The court below did not err in the misapprehension of the rules of evidence as to whether the plaintiff is a market dominant enterpriser.

4. As to the fourth ground for appeal

In order for an exclusive dealing to constitute an abuse of market-dominating position by a market-dominating enterpriser under the former Monopoly Regulation and Fair Trade Act (amended by Act No. 8382 of Apr. 13, 2007; hereinafter “the Act”), the exclusive dealing should be evaluated as an act of trading with the trading partner on the condition that the trading partner does not make any transaction with the trading partner unfairly. The “unfairness” in this context should be interpreted in line with the legislative purpose of “promotion of competition in the monopoly market.” Thus, the illegality can be recognized when an exclusive dealing with an objective of artificially restricting free competition in the market, i.e., maintaining and strengthening the monopoly of the market, e., restricting free competition in the market, which is aimed at affecting the market order, and which can be objectively evaluated as an act that might cause the effect of such restriction of competition.

Therefore, the illegality of an exclusive transaction as an abuse of market dominant position should be determined by comprehensively taking into account various circumstances such as the purpose and form of the transaction, the market share of a market dominant enterpriser, the degree of blocking the market-dominating opportunity to enter or expand the market, whether to increase expenses, the period of the transaction, the price and output in the related market, whether to change the price and output in the related market, similar goods and the existence of the neighboring market, the innovation and the reduction of diversity, etc. However, since an exclusive transaction as an abuse of market dominant position is conducted with the other transaction partner on the condition that the other transaction partner does not make any transaction with the competitor, there are many cases where the purpose of restricting competition is ordinarily included in the act itself.

According to the facts and records acknowledged by the court below, the plaintiff takes advantage of the status of an exclusive business entity based on the government's price subsidy in the chemical fertilizer market for food crops. Since July 1, 2005, the subsidization of losses from the government's chemical fertilizers was completely abolished, and thus, the market potential for the competitor is considerably threatened, it appears that the plaintiff entered into a contract for purchase and supply of this case with the fertilizer manufacturers to exclude competitors for the purpose of maintaining the competitor's market dominance power as before. The plaintiff's act is likely to cause a result of excluding them in the chemical fertilizer distribution market by fundamentally blocking the market sale of the chemical fertilizer for food crops through the business establishment or sales agency of the fertilizer manufacturing company which is a competitor, and further, when considering the market share of the chemical fertilizer for food crops from January 1, 2006 to June 30, 2006, the plaintiff still has a close market share in the above chemical fertilizer distribution market for food crops, which is an exclusive market share of the plaintiff's market share in the previous year.

In the same purport, the court below is justified to have determined that the Plaintiff’s exclusive dealing with the instant ship constitutes an abuse of market dominant position under the former part of Article 3-2(1)5 of the Act by unfairly restricting competition in the chemical fertilizer distribution market for food crops.

The court below did not err in the misapprehension of legal principles as to the illegality of an exclusive transaction as an abuse of market dominant position, as otherwise alleged in the ground of appeal.

5. Ground of appeal No. 5

Article 58 of the Act provides that "The provisions of this Act shall not apply to lawful acts conducted by an enterpriser or an enterprisers' organization in accordance with other Acts or orders issued under such Acts." However, the term "justifiable acts" in this context guarantee the enterpriser's exclusive status by the business or authorized system which is deemed reasonable to restrict competition due to the special nature of the pertinent business, while it refers to the necessary or minimum acts conducted within the scope of the order given by the law that specifically recognizes the exception of free competition in the business which requires high level public regulation from the perspective of public nature or orders given by such law (see Supreme Court Decisions 96Nu150, May 16, 1997; 2007Du19584, Dec. 24, 2008, etc.).

The lower court determined that the Plaintiff’s exclusive status cannot be deemed as a business for which restriction on competition is guaranteed due to the nature of the business, on the grounds that no statute asserted by the Plaintiff, such as Article 134 of the Agricultural Cooperatives Act, Article 7 of the Fertilizer Control Act, and the fertilizer supply and demand plan of the Minister of Agriculture and Forestry, is deemed reasonable to restrict competition, or that there is no specific provision that guarantees the Plaintiff’s exclusive status, or that high level of public regulation is necessary to recognize the exception of free competition.

In light of the above legal principles and records, the above judgment of the court below is justifiable.

The court below did not err in the misapprehension of legal principles as to the interpretation of Article 58 of the Act as otherwise alleged in the ground of appeal.

6. Regarding ground of appeal No. 6

The court below acknowledged the facts as stated in its reasoning after compiling the evidence of employment. The court below determined that in order for an enterpriser's association to fall under an exception of the law stipulated in Article 60 of the Act, only a small-scale enterpriser shall be organized, and a person other than a small-scale enterpriser shall not be admitted. A small-scale enterpriser stipulated in Article 60 of the Act shall be a small-scale enterpriser which needs to be joined in order to negotiate on an equal basis with large-scale enterprise. In this case, the plaintiff's member shall not be a small-scale enterpriser or consumer because it consists of a local union, item union, and item union federation, and it does not constitute a small-scale enterpriser or consumer, and the plaintiff is a juristic person established under the Agricultural Cooperatives Act, and therefore does not constitute an arbitrarily established association

In light of relevant statutes and records, the above determination by the court below is justifiable.

The court below did not err in the misapprehension of legal principles as to the interpretation of Article 60 of the Act as otherwise alleged in the ground of appeal.

7. 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 Yang Chang-soo (Presiding Justice)