[1] In a case where an enterpriser engages in an act restricting the conditions under which he/she is bound by the other party to a transaction when trading goods or services, whether such act constitutes the former part of Article 23(1)5 of the former Monopoly Regulation and Fair Trade Act (affirmative)

[2] The method of determining whether there is a possibility of undermining fair trade in relation to the “act restricting trade counterpart” among the conditional transaction under Article 23(1)5 and (2) of the former Monopoly Regulation and Fair Trade Act, and Article 36(1) [Attachment 1-2] of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

[1] In full view of the language, structure, and purport of Article 23(1)5 and (2) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012; hereinafter “Fair Trade Act”), Article 36(1) [Attachment 1-2] of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 201); where a business operator restricts a business operator’s acts subject to restrictions on the other party’s transaction in trading goods or services, it constitutes the former part of Article 23(1)5 of the Fair Trade Act.

[2] In determining whether there is a concern over impeding fair trade in relation to the “act restricting trade counterpart” among the conditional transaction under Article 23(1)5 and (2) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012; hereinafter “Fair Trade Act”); Article 36(1) [Attachment 1-2] of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, the determination should be made by comprehensively taking into account the specific form and form of transaction, such as intent, purpose, effect, and impact of the pertinent act; the characteristic of the goods or services; the market situation; the position and degree of the business entity and the trading counterpart; the impact of the restriction on competition; whether it is used as a means to achieve the illegal purpose under the Fair Trade Act.

[1] Article 23(1)5 and (2) (see current Article 23(3)) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 11406, Mar. 21, 2012); Article 36(1) [Attachment 1-2] subparagraph 7(b) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act / [2] Article 23(1)5 and (2) (see current Article 23(3) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 11406, Mar. 21, 2012); Article 36(1) [Attachment 1-2] subparagraph 7(b) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

[2] Supreme Court Decision 2010Du9976 Decided March 10, 201 (Gong2011Sang, 749)

KS Telecom Co., Ltd. (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Byung-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012Nu23749 decided February 6, 2014

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 1 and 2

A. Article 23(1) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012; hereinafter “Fair Trade Act”) provides that “an enterpriser shall not engage in any of the following acts, which is likely to impede fair trade (hereinafter “unfair trade”), or make affiliated companies or other enterprisers engage in such conduct.” Article 23(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act provides that “an act which unfairly restricts business activities of the other party to a trade or interferes with business activities” under Article 23(1)5 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012; hereinafter “Fair Trade Act”). Article 23(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act provides that “an act which unfairly restricts business activities or services of the other party to the trade” under Article 23(1)5 of the former part of the Fair Trade Act (hereinafter “Enforcement Decree of the Fair Trade Act”).

In full view of the language, structure, purport, etc. of the relevant statutes, if a business operator commits an act of restricting under the conditions binding the other party on the transaction partner when trading goods or services, it falls under the former part of Article 23(1)5 of the Fair Trade Act.

나. 원심은, ① 원고 등 이동통신사는 제조사로부터 해당 이동통신사의 이동통신망을 이용하도록 제조된 해당 이동통신사용 단말기를 대량으로 구매하여 직접 대리점에 공급하고(이하 이러한 거래방식이 적용되는 단말기를 ‘사업자모델’이라고 한다), 제조사는 해당 이동통신사용 단말기를 해당 이동통신사를 통하지 않고 직접 대리점이나 양판점 등에 공급하기도 하는(이하 이러한 거래방식이 적용되는 단말기를 ‘유통모델’이라고 한다) 사실, ② 원고는 형식상으로는 계열회사인 에스케이네트웍스를 통하여 제조사로부터 원고용 사업자모델을 구매하지만, 원고가 직접 제조사와 단말기 공급가격과 물량에 관한 협상을 하고 중요한 모델에 대하여는 직접 자신의 명의로 양해각서를 체결하기도 한 사실, ③ 원고는 삼성전자 주식회사(이하 ‘삼성전자’라고만 한다)와 원고용 사업자모델을 구매하는 거래를 하면서 삼성전자의 원고용 유통모델 비율을 각 개별 모델별로 총 공급대수의 20% 이내로 제한하는 내용의 유통모델 운영기준을 서로 합의(이하 ‘이 사건 합의’라고 한다)한 후 이를 시행한 사실(이하 ‘이 사건 행위’라고 한다), ④ 이 사건 행위 당시 이동통신사에 식별번호를 등록한 단말기만 개통이 가능한 소위 ‘화이트리스트 제도’로 인해 이동통신사가 단말기의 식별번호 등록을 거부할 경우 제조사는 사실상 그 단말기를 판매할 수 없었는데, 원고는 삼성전자가 이 사건 합의에 반하여 유통모델을 초과 공급할 경우 그 초과 공급된 단말기의 식별번호 등록을 보류하는 방법으로 이 사건 합의의 준수를 강제한 사실 등을 인정하였다.

Based on such factual basis, the lower court determined that the Plaintiff’s instant act constituted a “act restricting the other party to the transaction” as a conditional transaction with binding authority stipulated in the former part of Article 23(1)5 of the Fair Trade Act.

C. 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 requirements for establishment of exclusive dealing with detention.

2. As to the grounds of appeal Nos. 3 through 6

A. Determination as to whether there exists “constition of impeding fair trade” in a conditional dealing under Article 23(1)5 and (2) of the Fair Trade Act, and Article 36(1) [Attachment Table 1-2] [Attachment Table 7] of the Enforcement Decree of the Fair Trade Act, should be made by comprehensively taking into account the intent, purpose, effect, and influence of the act in question, the specific form and form of transaction, such as goods or services, characteristics, market situation, status of an enterpriser and trading partner, contents and degree of restriction, impact on competition, impact on the illegal purpose under the Fair Trade Act, and whether the act is used as a means thereof (see, e.g., Supreme Court Decision 2010Du9976, Mar. 10, 2011).

B. The court below held that considering the fact that the product of this case is a mobile phone device and the regional scope of the transaction, the transaction of the product of this case to the plaintiff and Samsung Electronic Agency constitutes wholesale stages, the main counterpart to the transaction is the plaintiff's agent, and it is impossible to purchase a device manufactured to use the mobile communication network with the plaintiff, not the plaintiff, for wholesale, the market at issue of fair trade damage is "the wholesale market of the plaintiff's mobile communication device out of the domestic mobile communication device," the market at issue of fair trade damage is "the wholesale market of the plaintiff's mobile communication device". ① The act of this case is limited to the range of 20% of the plaintiff's mobile communication device's distribution model, and it is hard to view that there is a high possibility that the plaintiff's act of this case is hard to see that the plaintiff's act of this case can be seen as significantly restricting the competition between the plaintiff's business model and the distribution model of the plaintiff's Samsung Electronic System, and that the plaintiff's act of this case is likely to increase the plaintiff's Samsung Electronic system's price increase.

C. According to the above facts acknowledged by the court below, the act of the plaintiff in this case is likely to restrict price competition between the plaintiff's business model and the distribution model, and as a result, the competition between the plaintiff's business model and the distribution model may be impeded, it can be deemed that the plaintiff's incentives to the business model and the economic incentive to compete with the price is also reduced in the manner of increasing or decreasing the supply price.

In addition, examining the reasoning of the lower judgment in light of such circumstances and the evidence duly admitted, the lower court’s determination that the instant act is likely to impede fair trade is based on the legal doctrine as seen earlier. In so doing, contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the determination of the relevant market

3. As to ground of appeal No. 7

According to the reasoning of the judgment below, the court below determined that the corrective order of this case among the disposition of this case cannot be deemed to be contrary to the principle of proportionality or unnecessary considering the following facts: (a) the implementation of the so-called "blocination list system" which enables mobile carriers to open a device with no identification number registered; and (b) the degree of fair trade damage is heavy.

Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err by misapprehending the legal doctrine on corrective order, etc., contrary to what is alleged in the grounds of

4. 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.

Justices Jo Hee-de (Presiding Justice)