KS Construction Co., Ltd. (Law Firm continental Aju, Attorneys Mai-ei et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Park Jong-ok, Counsel for defendant-appellant)

May 12, 2016

1. The Defendant’s order to pay penalty surcharges listed in attached Form 2, which was issued against the Plaintiff by the Decision No. 2014-194 dated September 15, 2014, is revoked.

2. Of the instant lawsuit, all of the primary and conjunctive claims regarding the order to pay penalty surcharges as stated in attached Form 1 shall be dismissed.

3. All remaining claims of the Plaintiff are dismissed.

4. Of the litigation costs, 70% is assessed against the Plaintiff, and the remainder is assessed against the Defendant, respectively.

1. In the first place, the Defendant’s corrective order and penalty surcharge payment order in attached Form 1, which was issued against the Plaintiff by Resolution No. 2014-192, Sept. 15, 2014, are all invalid. In the second place, the Defendant’s corrective order and penalty surcharge payment order in attached Form 1, which were issued against the Plaintiff by Resolution No. 2014-192, Sept. 15, 2014, are revoked.

2. In the first place, the Defendant’s order to pay penalty surcharges as indicated in attached Form 2, which the Defendant issued to the Plaintiff as of September 15, 2014, pursuant to the Decision No. 2014-194, is invalid. In the second place, the Defendant’s order to pay penalty surcharges as stated in attached Form 2, which the Defendant issued to the Plaintiff as of September 15, 2014, is revoked.

1. Basic facts and circumstances of dispositions;

A. Status of the plaintiff, etc.

The Plaintiff, Samsung C&T Co., Ltd. (hereinafter referred to as “stock company” is omitted in the name of the company), Gyeongnam Co., Ltd. (hereinafter referred to as “three companies including the Plaintiff”) and Gyeongnam Co., Ltd. (hereinafter referred to as “three companies”) are those engaging in a construction business as prescribed by Article 2 subparag. 1 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 10166, Mar. 22, 2010; hereinafter referred to as “Fair Trade Act”).

(b) Outline of construction works for new high-speed railroads in South and North Korea;

1) Construction works for Honam High-speed Railroad are construction works for the construction of a high-speed rail 184.534 km in total length which combine the transmission, factory owners, Doksan, Jung-Eup, and Gwangju High-speed Railroad, and a large-scale national book project in which the total project cost of KRW 8.352.9 billion is entered.

2) The construction project for the construction project for the Southern High-speed Railroad was divided into 19 sections. Among them, the 1-2 sections, 1-4 sections, 2-3 sections, and 4-2 sections were awarded by alternative bid method, and the remaining sections were awarded by means of design and construction separate bid method or design and construction package deal method.

3) Alternative tender is a tender method in which alternative plans are allowed with the intent of bidders along with the original design. An alternative means a design that reflects a new construction method, new construction method, technology, reduction of construction period, etc. with the equal or superior functions and effects that can replace the design prepared by the Government with respect to the types of work on the execution design prepared by the Government without changing a basic policy and that the price on the relevant execution design is lower than that on the execution design prepared by the Government and the construction period does not exceed that on the execution design prepared by the Government (in the case of a reduction of construction period, limited to a reduced period on the execution design prepared by the Government). An alternative tender has advantages in enhancing the efficiency of construction through competition and inducing the development of long-term technical capability.

(c) Current status of bids for construction works newly built by construction sections 1-2 of high-speed rail 1-2;

1) The construction project for the construction project for the construction project for the 1-2 construction section of the Honam High-speed Railroad (hereinafter “instant construction project”) submitted the documents to participate in bidding on August 11, 2009 by each construction company according to the public notice of tender on July 30, 2009, and tender was conducted on November 6, 2009. The bid was conducted by alternative bid. The decision of the eligible person for the shop design was conducted by giving 60% to the design score, 40% to the price score, and then by the so-called weight standard method to determine the highest person as the successful bidder, from among those who received more than 80 points of design score.

2) Three companies, including the Plaintiff, participated in the instant bidding by organizing a separate joint contractors as follows. On December 8, 2009, Samsung C&T was selected as the person qualified for design on December 24, 2009, and entered into a contract with the Korea Rail Network Authority and the instant construction project with the contract amount of KRW 274,205,00,000 (including value-added tax) for the said project.

The current status of the composition of a voting joint supply and demand organization included in the main text (referred to as the ratio: %) the Plaintiff (42), Tae-ro Comprehensive Construction (9), 2, 5, 13, 10, 3, 10, 50, 12, Samsung C&T Industries (50, 7), 10, 7, 50, 50, 15, 15 (15).

3) The bid price, bid price, and design, price, and comprehensive score of the instant tender are as listed in the following table:

As a result of the comprehensive design score's price score in the main text, Plaintiff 273,91.61.61 November 6, 2009, 11:1:92.992.00 92.99 40.00 92.99, 274, 205 91.68 November 6, 2009, 11:23:56.79.79 96.79.76, 160, 281, 281, 160-7.0, 160, 104.00 on Nov. 6, 2009

D. Three parties, including the plaintiff, etc.

1) The background of the agreement

Before the public notice of the instant bidding, the Plaintiff had constructed Section 1-1 Section for Honam High-speed Railroad, and the Plaintiff determined that the participation in the instant bidding, which is a section connected thereto, would have more competitive than other companies in terms of construction experience, etc., and decided to participate in the instant bidding. Samsung C&T also decided to participate in the instant bidding based on the information revealed through industry meetings, etc. one month prior to the public notice of the instant bidding, and notified the Plaintiff of the decision by wire. H&T determined that there was a possibility of price competition as an enterprise with a regional base in Chungcheongnam-do, and decided to participate in the instant bidding around August 2009. The Plaintiff and Samsung C&T became aware of the same fact after the date of the submission of the P&T application, and there was a need to prepare for low-level bid bid for Gyeongnam-do companies.

(ii) the contents and implementation of the agreement;

On August 11, 2009, the final date for the submission of the P Q Q (Prequalification), the Plaintiff and Samsung C&T agreed to exclude price competition and to compete only as a design, and set the bid price as 88.9% compared to the design price. In addition, the Plaintiff and Samsung C&T continued to request the M&T to not make a low-price bid from October 2009 to the G&T company. Ultimately, the G&T company agreed to receive a certain compensation from the G&T company on November 1, 2009, prior to the date of the bidding, instead of having agreed to receive a bid price, and agreed to formally participate in the tender of this case. The Plaintiff et al., including the Plaintiff agreed to enter into an electronic bidding system in order to ensure the implementation of the bidding process by entering into a mutual agreement on November 6, 2009.

E. The defendant's disposition

1) The Defendant issued a corrective order and a penalty surcharge payment order to the Plaintiff on September 15, 2014 (hereinafter referred to as the “instant corrective order,” and the penalty surcharge payment order to the Plaintiff on the ground that three parties, including the Plaintiff, etc., participated in the instant bidding, determined the bid rate in advance and agreed to participate in the bidding formally constitutes an unfair collaborative act as prescribed by Article 19(1)8 of the Fair Trade Act (hereinafter “instant collaborative act”).

2) The Defendant basically applied Articles 22 and 55-3 of the Fair Trade Act, Article 61 and [Attachment 2] of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 22003, Feb. 27, 2010; hereinafter “Enforcement Decree of the Fair Trade Act”), and the public notice on the detailed criteria, etc. for the imposition of penalty surcharges (amended by Defendant Notice No. 2010-9, Oct. 20, 2010; hereinafter “the public notice of penalty surcharges”). In consideration of the equity with other cases already managed by the Defendant, the Defendant calculated the penalty surcharges against the Plaintiff in consideration of the following matters:

A) Criteria for calculation

(1) Relevant sales

Related sales shall be deemed 249,519,039,830 won (excluding value-added tax) for the instant construction project.

(2) Standard imposition rate

In light of the content and ripple effect of the instant collaborative act, the standard rate of imposition of 7-10% shall apply to the instant collaborative act as the degree of gravity of the offense falls under the “seriously serious violation,” and according to the provisions of subparagraph (a) of Article 4.1.1.c. (1) of the Public Notice of Penalty Surcharges, but the instant collaborative act shall apply 10% by comprehensively taking into account the following: (a) the fact that the instant collaborative act is a large-scale project and has a significant impact on the national finance; and (b) the instant collaborative act shall have an obvious effect on the competition-restricting effect as a bidding collusion, which is obvious that it has an obvious competition-restricting effect. However, the standard of calculation shall be reduced by 1/2 in accordance with the provisions of subparagraph (e) of Article 4.

(3) Criteria for calculation

The standards for calculation shall be determined by multiplying the relevant sales by the base rate for imposition as follows:

Plaintiff 249,519,039,830 10% of △△ 50% of △△ 50%,475,951,991,91

(b)the primary adjustment calculation criteria by an element of action;

The first adjustment calculation criteria is the same as the above calculation criteria because there is no reason to adjust by the action factors against the plaintiff.

C) The second adjustment calculation criteria based on the elements of the actor

Although Nonparty 1’s regular director did not receive a report on the instant collaborative act from Nonparty 2’s team leader, it is recognized that the Plaintiff’s senior delegate took part in the instant collaborative act, 10% of the standards for the first adjustment shall be aggravated considering the fact that the Plaintiff’s senior delegate took part in the instant collaborative act.

In consideration of the fact that the Plaintiff consistently recognized the fact of the act from the investigation stage to the completion of the deliberation by the Committee, and actively cooperates in the investigation, such as submitting materials or making a statement that may help to determine illegality, 20% of the first adjustment criteria shall be reduced.

In the table (unit: the unit) representative (unit: the unit) representative director in the main sentence, and the officer's officer's cooperation in investigation and investigation conducted by Plaintiffs 12,475,951,91 10% 11,228,356,791

D) Determination of imposition penalty surcharges

Considering that the average amount of net income for the three years immediately preceding the date of deliberation on the Plaintiff’s financial statements is less than the average amount of net income for the three years immediately preceding the date of deliberation, 50% of the standard for the second adjustment shall be reduced. In addition, considering the recent deterioration of the construction market, 10% of the standard for the second adjustment shall be reduced. The final penalty surcharge shall be as follows.

The adjusted rate of imposition of the surcharge for the second adjustment calculation of the representative director in the table (unit: KRW 1,228,356,791 - △△ 50% △△△ 4,491,000,000,000 for the △△△ 11,228,356,791

3) On April 18, 2014, when the Defendant’s investigation into the instant collaborative act was underway, the Plaintiff filed the second application for reduction or exemption, and thereafter submitted a summary of the collaborative act necessary to verify it, and a statement of the officer and staff in charge. Accordingly, the Defendant changed the penalty surcharge to the Plaintiff’s KRW 4,491,000,00 to KRW 2,740,000 and KRW 200,00,000 under the former Fair Trade Act (amended by Act No. 12334, Jan. 24, 2014) and Article 35(1)3 of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 2503, Jul. 21, 2014), on the ground that the Plaintiff constitutes an investigative partner under the investigation under Article 204-194 of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 2503, Sept. 15, 2014).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 and 2, the purport of the whole pleadings

2. Determination on this safety defense

A. Of the instant lawsuit, whether the part of the conjunctive claim regarding the order to pay penalty surcharges in the instant case is legitimate

1) The Defendant asserts that a disposition of reduction or exemption of a penalty surcharge on the ground of voluntary report, etc. is a final disposition that determines the final penalty surcharge to be actually paid by the other party, and that, in the event that a disposition of reduction or exemption of a penalty surcharge is a kind of provisional disposition that plans to impose such a final penalty surcharge, the previous disposition of imposition of a penalty surcharge ceases to exist by absorbing the disposition of reduction or exemption of a penalty surcharge. Therefore, a lawsuit seeking confirmation of invalidation

2) Legal principles and determination

If the Defendant: (a) carried out an unfair collaborative act and carried out a disposition imposing a penalty surcharge on a voluntary reporter or an investigative partner under Article 22-2 of the Fair Trade Act (hereinafter “prior disposition”); and (b) carried out a disposition imposing a penalty surcharge on a voluntary reporter under Article 35(3) of the Enforcement Decree of the Fair Trade Act by separating the case against a voluntary reporter, etc. pursuant to Article 35(3) of the Enforcement Decree of the Fair Trade Act; (c) the subsequent disposition is a final and conclusive disposition that determines the amount of penalty surcharge to be actually paid by the other party, including the voluntary report reduction and exemption; and (d) the prior disposition is a kind of provisional disposition that plans such a final and conclusive disposition, and if there is a subsequent disposition, the prior disposition is absorption into the subsequent disposition and terminated. Therefore, the lawsuit seeking the revocation of the prior disposition is unlawful (see Supreme Court Decision 2013Du987,

However, on September 15, 2014, the Defendant issued an order to pay a penalty surcharge of KRW 4,491,00,000 to the Plaintiff on the ground of the instant collaborative act, but on the same day, accepted the Plaintiff’s application for reduction and exemption, and changed the above penalty surcharge of KRW 2,744,00,000 on the same day to KRW 2,74,000 as seen earlier. As such, the part of the instant lawsuit seeking confirmation or revocation of the order to pay a penalty surcharge of this case among the instant lawsuit is unlawful as it is against the disposition already invalidated. Therefore, the Defendant’s defense on the merits

B. Whether the revocation of the instant penalty surcharge payment order among the instant lawsuit is legitimate

Since the Defendant added the purport of the claim seeking revocation of the instant penalty surcharge on June 8, 2015 after the Plaintiff was notified of the instant penalty surcharge order around September 15, 2014, which was 30 days after the lapse of 30 days thereafter, the Defendant asserted that the part seeking revocation of the instant penalty surcharge among the instant lawsuit did not comply with the filing period under Article 54(1) of the Fair Trade Act, and thus, it is unlawful.

According to Article 54 (1) of the Fair Trade Act, when a person intends to file a lawsuit of dissatisfaction against the defendant's disposition under this Act, he/she shall do so within 30 days from the date of receiving the notice of disposition or the original copy of the written ruling on the objection.

In addition, where the purport of the claim is added, a new lawsuit shall be deemed to have been instituted when the addition of the claim is made. Thus, compliance with the time period for filing a lawsuit against the additionally added claim shall, in principle, be determined on the basis of the time when the claim is amended (see Supreme Court Decision 2004Du7023, Nov. 25, 2004). However, as an exception thereto, where a lawsuit seeking cancellation of the earlier disposition is filed and the subsequent disposition is added to the purport of seeking cancellation of the subsequent disposition, it is closely related to the prior disposition and the subsequent disposition is made in a series of procedures, and if it can be deemed that the purport of seeking cancellation of the subsequent disposition is included in the lawsuit seeking revocation of the subsequent disposition, the period for filing a lawsuit seeking revocation of the subsequent disposition may be determined on the basis of

On September 15, 2014, the following facts are examined: (a) the Defendant issued the instant corrective order, a penalty surcharge order, and a penalty surcharge payment order under Article 2014-194 by a resolution against the Plaintiff on September 15, 2014; and (b) the Plaintiff filed a lawsuit against the Defendant on October 17, 2014, which is within 30 days from the date each of the instant dispositions was notified, seeking the cancellation of the instant corrective order and the prior penalty surcharge payment order; (c) on June 8, 2015, the Plaintiff filed a lawsuit against the Defendant seeking the revocation of the instant penalty surcharge; and (d) sought the confirmation of invalidity of the instant penalty surcharge payment order and added the purport of the preliminary claim seeking the revocation thereof.

Therefore, in full view of the following circumstances revealed by taking into account the aforementioned facts, the facts acknowledged earlier, the evidence, and the purport of the entire argument, it is reasonable to view that the prior penalty surcharge order and the instant penalty surcharge payment order are closely related to each other, and they include the purport of seeking revocation of the instant penalty surcharge payment order, which is the Defendant’s final disposition, in the lawsuit seeking revocation of the instant penalty surcharge payment order. Therefore, even if the Plaintiff sought revocation of the prior penalty surcharge payment order at the time of the instant lawsuit, and added the purport of the claim to seek revocation of the instant penalty surcharge payment order, it is reasonable to determine whether the part seeking revocation of the instant penalty surcharge payment order should be determined at the time of the instant lawsuit, and as seen earlier, the instant lawsuit was filed within 30 days from the date on which the Plaintiff was notified of each of the instant dispositions. Therefore, the Defendant’s objection to this part of the previous lawsuit is without merit.

1) According to Articles 21 and 22 of the Fair Trade Act, when there is an act of violating the prohibition of unfair collaborative acts, the defendant may order the enterpriser concerned to take corrective measures or impose a penalty surcharge on the enterpriser concerned. According to Article 22-2(1) of the Fair Trade Act and Article 35(1) and (3) of the Enforcement Decree of the Fair Trade Act, where a person who reported or cooperated in an investigation after the commencement of the investigation, satisfies certain requirements, the penalty surcharge and corrective measures may be mitigated or exempted, and the defendant may, upon a request from the person who voluntarily reported or cooperated in the investigation, separately deliberate or separately decide on the case in question so that the identity of the

Accordingly, in principle, one of the reduced penalty surcharges should be imposed even when there is a voluntary report or reduction, or if there is a request to protect the confidentiality of the parties, the Defendant, in order to prevent other enterprisers from being aware of the fact that there is no voluntary report, etc., imposed a prior disposition on the entire participants in the collaborative act, and then, the said prior disposition should be imposed on only the voluntary reporter, etc. separately. In addition, in addition to the fact that the prior disposition was planned at the time of the prior disposition, and that the penalty surcharge determined by the reduction or exemption was the final and conclusive payment of the penalty surcharge, the instant prior disposition and the instant penalty surcharge payment order were made through a series of procedures to determine the final penalty

2) Upon the written resolution of 2014-194, the Plaintiff recognized that the amount of penalty surcharge was changed from KRW 4,491,00,000 to KRW 2,744,00,000 by the instant order to pay the penalty surcharge. In fact, the Plaintiff paid KRW 2,744,00,000 to the Defendant. The subject of the Plaintiff’s lawsuit is the amount of penalty surcharge determined by the instant order to pay the penalty surcharge.

3) The Plaintiff asserted that the pertinent sales should be calculated on the basis of actual sales, or that there is no ground to increase the number of executives in the procedure seeking revocation of the instant penalty surcharge order, due to the nature of the bid in this case, the Plaintiff’s assertion that there was no ground to increase the imposition standard rate, and that there was a deviation from and abuse of discretionary authority of the disposition imposing the penalty surcharge, which is final. Even after adding the purport of seeking revocation of the instant penalty surcharge order, the Plaintiff continued to maintain the said assertion on the grounds of illegality that are common to the instant order for the penalty surcharge payment and the instant order for the penalty surcharge payment. Accordingly, it may be deemed that the Plaintiff included the purport of seeking revocation of the instant order for the penalty surcharge

4) The written resolution No. 2014-192 states all relevant parts, such as the formation of the instant collaborative act, the process of calculating the penalty surcharge, and the corrective measures. On the other hand, the written resolution No. 2014-194 states only the scope of reduction and exemption. The Plaintiff appears to have stated the “resolution No. 2014-192” in the initial written resolution in order to dispute the specific grounds for disposition stated in the written resolution No. 2014-192.

5) On the same day, the Plaintiff received both the written resolution No. 2014-192 and the written resolution No. 2014-194 on the same day, but as long as the written resolution is separated into two separates, it seems difficult to understand the practical meaning of each disposition as it appears to have been established separately from the prior disposition and the subsequent disposition. In addition, the written disposition of the instant penalty surcharge payment order (No. 2014-192 written resolution) specifically states the details of the corrective order and the penalty surcharge payment order as shown in attached Form 1, while the written disposition of the instant penalty surcharge payment order (No. 2014-194 written resolution) states that “A penalty surcharge against the Plaintiff shall be modified from KRW 4,491,00,000 to KRW 2,744,00,000,000. In light of these circumstances, the Plaintiff appears not to have easily known that the instant order of the penalty surcharge payment order is subject to the final disposition.

6) The Defendant did not notify the Plaintiff of the procedure of appeal under Articles 53(1) and 54 of the Fair Trade Act when issuing the instant penalty surcharge payment order.

C. Sub-committee

Therefore, among the lawsuit of this case, the part that seeks confirmation of the primary invalidation or revocation of the order to pay the penalty surcharge of this case among the lawsuit of this case should be dismissed as unlawful. Thus, the defendant's prior defense to this part is reasonable, but the defendant's prior defense to this part of the lawsuit of this case concerning the cancellation claim of the order to pay the penalty surcharge of this case

3. Judgment on the merits

A. Whether the instant corrective order is lawful

1) The plaintiff's assertion

In light of the fact that there was a high-quality competition in the design sector with a large amount of appraisal costs, the ordering authority could obtain high quality results, and the collaborative act in this case was very low in the degree of competition restriction compared to the bid price agreement in the lowest successful bid bid, general agreement on bid price in the bid, and general agreement on bidding price, the design and construction method, the construction work in package, and the first sections of the successful bid, the competition to be restricted from the beginning, and the construction in this case was limited from the beginning due to the characteristics of the first sections of the successful bid. The execution rate of the construction in this case was high, and there was little room for price competition, and the agreement with the Gyeongnam company did not affect the competition in the bidding. Accordingly, the collaborative act in this case does not constitute an act of restricting competition. Accordingly, the corrective order in this case made on a different premise should be revoked because it is invalid or unlawful.

2) Relevant statutes

Attached Table 3 shall be as stated in the relevant statutes.

3) Determination

A) Whether a collaborative act restricts competition or not should be determined individually by examining whether the collaborative act affects or is likely to affect the determination of price, quantity, quality, other terms and conditions of trading, etc. by taking into account various circumstances, including the characteristics of the relevant product, consumers’ standard for choosing products, and the impact of the relevant act on the market and enterprisers on the competition. Meanwhile, it is inevitable to view that an act of enterprisers’ joint determination or alteration of price causes or is likely to affect free pricing depending on their intent by reducing price competition within the scope of price competition (see Supreme Court Decision 2009Du7912, Apr. 14, 201, etc.).

B) In full view of the facts acknowledged earlier in light of the aforementioned legal principles, the evidence presented earlier, and the following circumstances revealed by the purport of the entire pleadings, the restriction on competition of the instant collaborative act can be sufficiently recognized. Therefore, the Plaintiff’s allegation in this part is without merit.

(1) The instant collaborative act constitutes a so-called light collaborative act in which three enterprisers, including the Plaintiff, etc. pre-determined the bid price and agreed to participate in the bidding formally, and which results in only the effect of restricting competition and has no effect of increasing efficiency. All three enterprisers, including the Plaintiff, etc., participating in the bidding, participated in the instant collaborative act, thereby extinguishing the price competition itself in the instant construction tender and causing incomplete design competition.

(2) The instant collaborative act does not have any intention other than for the purpose of creating stable profits by restricting competition among bidders. In addition, the instant collaborative act has a significant impact on the national finance as a large public ordering corporation and has a significant impact on the social and economic ripple effect. Samsung C&T ordered construction works with construction cost exceeding KRW 274,205,00,000, the scale of unjust enrichment resulting from the instant collaborative act seems to be significant.

(3) The instant construction project does not have any evidence to support the Plaintiff’s assertion that there is a limited room for price competition due to the high performance rate. Moreover, the meaning of competition in the price sector is not smaller than 40% in the method of determining the successful bidder of the instant bid since the share of the price score in the method of determining the successful bidder of the instant bid reaches 40%. If the price competition was properly conducted between three companies including the Plaintiff, etc., the ordering authority would have been able to enter into a contract at a price much lower than that agreed with other companies. In addition, if there is an agreement on the bid rate, the price agreed with the design phase cannot be considered in the design phase, and thus, the

(4) In the instant tendering procedure, there is a circumstance that competition has been limited to a certain degree due to one company’s bid bid price scheme, and design cost burden. However, such circumstance alone does not necessarily lead to the conclusion that the restriction on competition of the instant collaborative act is insignificant. Moreover, the evidence submitted by the Plaintiff alone cannot be deemed as having obtained the result of high quality due to the instant collaborative act, and there is insufficient evidence to acknowledge that competition in the design sector was promoted or that the overall efficiency of the economy was promoted, and there is no other evidence to acknowledge otherwise.

(5) The fact that Gyeongnam Company received design points of 71.94 and did not meet design points (80 points) in the instant bidding is recognized. However, the Plaintiff voluntarily requested Gyeongnam Company to participate in the instant bidding for the purpose of preventing low-price bid. Since Gyeongnam Company was behind the Plaintiff and Samsung C&T in terms of design competitiveness and construction performance, it was a situation that low-price bid cannot be conducted to undertake the instant construction work. The Plaintiff and Samsung Heavy Industries asked Gyeongnam Company not to continuously conduct low-price bid. The Plaintiff and Samsung C&T asked Gyeongnam Company not to participate in the instant bidding after November 209, which was the date immediately before the bidding date, and eventually, it allowed Gyeongnam Company to participate in the instant bidding. This act is clear that the restriction on competition is obvious, and the bid price increases by restricting the bid price in the instant bidding.

B. Whether the instant penalty surcharge payment order is lawful

1) The plaintiff's assertion

The instant penalty surcharge payment order shall be null and void or cancelled for the following reasons:

A) The illegality in calculating the relevant sales amount

(1) unconstitutionality of a disposition-based law

Article 22 (hereinafter “instant provision”) of the Fair Trade Act, which is the basis law for the instant penalty surcharge payment order, stipulates the upper limit of the penalty surcharge, and thus is in violation of the principle of clarity, and thus comprehensively delegates the sales amount to the Presidential Decree, thereby violating the principle of prohibition of comprehensive delegation and the principle of statutory reservation. Therefore, the instant penalty surcharge payment order based on the law that is unconstitutional is null and void or illegal.

(2) A deviation from or abuse of discretionary power

Inasmuch as there is no sales amount of the Plaintiff due to the instant collaborative act, the Defendant is obliged to impose a penalty surcharge up to 2 billion won on the Plaintiff pursuant to the proviso of Article 22 of the Fair Trade Act. Even if not, the relevant sales should be calculated based on an amount equivalent to 42%, which is the Plaintiff’s share in the joint venture, rather than the entire contract amount for the instant construction project. The term “contract amount” under the proviso of Article 9(1) of the Enforcement Decree of the Fair Trade Act is construed as “amount corresponding to the actual sales that the business entity, who is the subject of the unfair collaborative act, has actually acquired” in line with the intent of the “sales” under Article 22 of the Fair Trade Act, which is the delegation of the legislative limit. Therefore, the order to pay the penalty surcharge in this case, without considering the size of the gains acquired by the Plaintiff,

Furthermore, Article 4.1.1(c)(1)(e) of the Penalty Surcharge Notice provides that a business entity shall calculate the contract amount as related sales, and is null and void in violation of the superior laws and regulations. Moreover, a penalty surcharge notice is merely an internal business practice rule within the Defendant and thus is not externally binding, and is null and void in violation of the principle of proportionality, etc. Therefore, the instant penalty surcharge order, which is calculated as the entire contract amount as related sales, is null and void or illegal

B) Illegal in calculating the imposition standard rate

Various circumstances alleged earlier and the Defendant’s application of the imposition standard rate of 7% in a number of cases where the successful bid price system for the first section is indicated, and the previous detailed criteria for the imposition of penalty surcharges revised on June 5, 2013 stipulate the detailed criteria table that can distinguish the gravity of the offense when calculating the imposition standard rate for basic penalty surcharges. The degree of gravity of the offense differs depending on the calculation standard points in accordance with the calculation standard table, and accordingly, considering the following factors as a whole, the Defendant’s application of the imposition standard rate of 10% by deeming the instant collaborative act as “a serious violation” is contrary to the principle of proportionality and the principle of equity in light of the content and degree of the offense, the existing adjudication precedents, etc.

C) Illegality of aggravated punishment of senior executives

The Plaintiff’s regular director received a post-report from Nonparty 2 and did not directly participate in the instant collaborative act. In addition, Nonparty 1’s regular director does not constitute a senior executive officer.

D) Violation of the decision of imposing penalty surcharge

The defendant reduced 10% of the criteria for the calculation of the second adjustment on the ground of the organization of joint supply and demand contractors with respect to Samsung C&T, which is the successful bidder in the bidding of this case, but did not reduce it to the plaintiff, which is in violation of the principle of equity.

2) Determination

A) As to the allegation of illegality in calculating the relevant sales amount

(1) Violation of a law based on disposition

The principle of clarity does not require the same level in all Acts, and may vary to the extent required by the nature of each Act or each provision of the law, and may vary depending on the specificity of each constituent element and the background or circumstances established by such Act (see, e.g., Constitutional Court Order 2008Hun-Ma500, Feb. 23, 2012; Constitutional Court Order 201Hun-Ba32, Aug. 28, 2014). In this case, in order to promote fair and free competition and promote creative business activities, protect consumers, and promote balanced development of the national economy, the legislative purpose of regulating unfair collaborative acts, the legislative process of establishing the maximum amount of penalty surcharges imposed in proportion to the type and degree of violations, and the legislative process of establishing the concept of "related sales" in order to achieve the above legislative purpose in an appropriate and efficient manner, the Plaintiff’s assertion that the provision of the Fair Trade Act does not constitute a violation of the principle of clarity and predictability of the statutory delegation or the principle of prohibition of comprehensive enforcement of the statutes cannot be deemed to be deemed as a violation of the foregoing provision.

(2) A deviation from or abuse of discretionary power

Article 22, Article 55-3(1) and (3) of the Fair Trade Act provides that, in order to deprive an enterpriser who has conducted an unfair collaborative act of unjust collaborative act of 10/100 of economic benefits and to realize the administrative purpose of preventing unfair collaborative act, a penalty surcharge of up to 2 billion won may be imposed on the enterpriser who has conducted the unfair collaborative act of 10/10 (in the absence of sales, 2 billion won). In imposing the penalty surcharge, the standard for imposing a penalty surcharge may be prescribed by the Enforcement Decree in consideration of the substance and degree of the violation, duration, and frequency of the violation, and the scale of gains acquired by the violation. Accordingly, Article 9(1) of the Enforcement Decree of the Fair Trade Act provides that, “The sales amount prescribed by the Presidential Decree” means the sales amount of goods or services sold in a particular business area during the period of violation or the amount equivalent thereto: Provided, That if a violation is a collusion or a similar act, it refers to the contract amount under the premise that the price of bidding does not exceed the minimum price of bidding.

In full view of the following circumstances, the facts acknowledged earlier in light of the aforementioned legal principles, and the evidence presented earlier and the purport of the entire pleadings, the Defendant’s calculation of the entire contract amount related to the instant construction project as the relevant sales amount by applying the main text of Article 22 of the Fair Trade Act and the proviso of Article 9(1) of the Enforcement Decree of the Fair Trade Act to impose penalty surcharges on the Plaintiff who committed a collaborative act falling under Article 19(1)8 of the Fair Trade Act shall not be deemed lawful as a measure in accordance with the relevant Act and subordinate

(A) The nature of administrative sanctions imposed on an unfair collaborative act, including bid collusion, and the nature of restitution of unjust enrichment, in order to realize the administrative purpose of suppressing the unfair collaborative act (i.e., the suppression of the unfair collaborative act). Therefore, it is difficult to deem that the relevant sales, which serves as the basis for imposing the penalty, are limited to unjust enrichment incurred to the enterpriser by bidding collusion.

(B) In order to determine the final penalty surcharge, other circumstances stipulated in Article 55-3 of the Fair Trade Act, including the content, degree, period, and frequency of the act of violation, and the amount of profits acquired therefrom, are also considered as well. Moreover, under the proviso of Article 22 of the Fair Trade Act, a penalty surcharge may be imposed within the scope not exceeding 2 billion won even if no sales have been made. Ultimately, the relevant sales are merely the basis for the calculation of the penalty surcharge, and there are various stages of steps to ensure fairness, such as reducing part of the penalty surcharge, by taking into account the amount of profits acquired by the relevant actor during the process of the final calculation of the penalty surcharge.

(C) The Plaintiff asserts that “the sales” under Article 22 of the Fair Trade Act means the actual sales that occurred due to the relevant illegal act, and that if there is no sales as shown by the Plaintiff, a penalty surcharge may be imposed within the extent not exceeding two billion won by applying the proviso of Article 22. However, as seen earlier, the proviso of Article 9(1) of the Enforcement Decree of the Fair Trade Act under the delegation by Article 22 of the Fair Trade Act provides that “the term “the sales” refers to the contract price where the act of violation is a bid collusion or any other similar act, and does not provide that the relevant sales shall be calculated differently depending on whether the illegal act of violation has actually been awarded the successful tender. In addition, the interpretation of the above provision, regardless of the scale of the bid subject to the relevant illegal act, can only impose a penalty surcharge not exceeding two billion won, and thus, it would result in losing the effectiveness of sanctions against bidding collusion, and therefore, it is reasonable to apply the main text of Article 22(1) of the Fair Trade Act, regardless of whether the successful bidder is a successful bidder or not.

(D) In the case of an inappropriate business entity, it cannot be said that there is no direct benefit from the collusion, but there is no economic benefit therefrom. Moreover, it cannot be said that there is no validity by deeming it as a contract amount that reflects the scale of the bid at issue, which is the subject of the violation of the guidelines for imposing penalty surcharges on the inappropriate business entity. In addition, three companies, including the Plaintiff, etc. agreed to set the bid rate in advance while participating in the bid of this case, and the Gyeongnam company agreed to participate in the bid of this case. It can be deemed that there is a direct or indirect interest in the total contract amount of the construction of this case.

(E) If an excessive penalty surcharge is calculated in light of the amount of profit acquired without due consideration in the ratio of the share in the joint contractor, there is room to deem that the Defendant abused or abused discretion in violation of the principle of proportionality. However, as seen earlier, considering the circumstances in which the Plaintiff was not awarded a contract, the Defendant applied the imposition standard rate to 5%, which is a half of 10%, and reduced for other reasons, it is difficult to readily conclude that there is a significant imbalance in calculating the amount of the penalty surcharge.

(F) In light of the structure, purport, and purpose of the relevant laws and regulations as seen earlier, even in the interpretation of the Enforcement Decree of the Fair Trade Act, the contract amount is still set as the standard for imposing penalty surcharges, and thus, it cannot be deemed null and void as it goes against the superior laws and regulations. Furthermore, even if the part concerning the bid collusion in the notice of a penalty surcharge is merely a mere internal business rule of the defendant that set the standard for imposing penalty surcharges, even if the application of the above standard does not go against the principle of proportionality or the principle of equity, it cannot be deemed null and void (see, e.g., Supreme Court Decisions 2002Du6842, Oct. 27, 2004; 2002Du5627, Nov. 12, 2004; 2002Du5627, Nov. 12, 2004).

B) As to the allegation of illegality in calculating the imposition standard rate

In full view of the following circumstances in the above 3.A.3(b)(b), it is not erroneous for the Defendant to regard the collaborative act in this case as “an act of grave violation” and to apply the 10% imposition standard rate. The Plaintiff’s assertion on this part is without merit.

(1) The Defendant has discretion to determine the criteria for imposition of penalty surcharges by taking into account the specific details of the relevant case and the degree of illegality. In the case of “a serious violation”, the imposition rate of 7-10% shall apply according to the public notice of penalty surcharges. The Plaintiff asserted that the Plaintiff applied 10%, the highest standard rate on the ground that the Defendant applied 7% in a similar case. However, the Defendant’s application of 10%, the highest standard rate on the grounds of taking into account the specific contents of the instant collaborative act, the degree of illegality, and the effect of strike, etc., shall be subject to discretionary disposition within the relevant statutes. The evidence submitted by the Plaintiff alone alone does not have any circumstance to deem that the Defendant treated the Plaintiff differently or abused the discretionary power with the business operator who voluntarily committed an identical or similar violation in issuing the instant penalty surcharge order without reasonable grounds.

(2) Article 2 of the Addenda to the Public Notice of the amended Penalty Surcharge provides that "where penalty surcharges are imposed on violations of the Act prior to the enforcement date of the Public Notice, it shall be governed by the previous provisions." Thus, there may be no room for applying the "Detailed Evaluation Table for Unfair Collaborative Acts" of the Public Notice of the amended Penalty Surcharge to the Collaborative Acts in

C) As to the allegation of illegality regarding the increase of senior executives

(1) Article 4.3.2(5) of the Fair Trade Act provides that the amount calculated by multiplying the first adjusted penalty surcharge by an aggravated rate of not more than 10/100 shall be added to the first adjusted penalty surcharge when there are grounds for increase in the amount of the Defendant’s penalty surcharge, which was enacted under the delegation by the Fair Trade Act and the Enforcement Decree of the Fair Trade Act ( regardless of whether the directors or higher-ranking executives are registered in the register). Based on the specific contents and literal meaning of the above provision, the purpose of delegation of the Enforcement Decree of the Fair Trade Act and the Enforcement Decree of the Fair Trade Act are based on the above provision’s detailed contents and literal meaning, and the purpose of the provision that sets forth the aggravated provision for higher-ranking executives in the notice of penalty surcharge, the above aggravated reason should be interpreted only to refer to “where the senior executives have directly or agreed on the relevant company’s employees, etc., or have actually participated in the relevant violation to the extent equivalent thereto.” In cases of the imposition of penalty surcharge, etc., the grounds for strict review of the provision on the rights protection of citizens’ property rights and administrative rules are required (see, 200.

(2) According to the statement in Gap evidence No. 1, the defendant recognized that "the plaintiff's regular director was not subject to the report on the instant collaborative act by the team leader of the non-party 2, but did not restrain it." On the ground that the plaintiff's senior officer was directly involved in the instant collaborative act, 10% of the calculation criteria for the first adjustment against the plaintiff was aggravated in accordance with the pertinent provision of the notice of penalty surcharge.

However, there is no objective evidence to deem that Nonparty 1’s regular director directly met or agreed on the pertinent collaborative act of this case’s employees, etc., or actually participated in the pertinent collaborative act to the extent equivalent thereto, and there is insufficient evidence to acknowledge the evidence No. 11, and there is no other evidence to acknowledge it.

Even if Nonparty 1’s managing director received a post-report on the instant collaborative act as part of the ordinary business, and did not take special measures, it is difficult to view that Nonparty 1’s managing director actually participated in the instant collaborative act to the extent that it falls under the aggravated provision for senior executives in relation to the instant collaborative act.

Therefore, even though there is no evidence to acknowledge that the plaintiff's senior executive was directly involved in the collaborative act of this case, the defendant's increase of 10% of the calculation standard of the first adjustment against the plaintiff on the basis of the above aggravated reason constitutes a case where the defendant misleads the facts which form the basis of the imposition of the penalty, or deviates from or abused discretionary power by violating the principle of proportionality and equality. Therefore, this part of the plaintiff'

D) As to the allegation of illegality in the decision of imposing penalty surcharges

As seen earlier, even if the Defendant did not reduce the Plaintiff’s additional reduction on the ground that the joint contractors were organized differently from the successful bidders, the circumstance that the Plaintiff acquired no benefits since the Plaintiff was taking mitigation measures by reflecting the circumstances that the Plaintiff did not receive a successful bid in the bidding at the stage of determining the standards for calculation was already reflected in the order to pay the penalty surcharge in this case. Therefore, the Defendant cannot be deemed to have discriminated against the Plaintiff without reasonable grounds solely on the ground that the Plaintiff was in tax payment.

3) Sub-decisions

Therefore, as long as the collaborative act in this case cannot be deemed as a ground for aggravation on the ground of direct involvement of senior executives, the order to pay the penalty surcharge in this case, which was issued on a different premise, is illegal as it deviates from and abused discretionary power. However, it is difficult to view that the degree of the defect is serious or obvious, and it cannot be deemed as void as a matter of course, and it constitutes grounds for revocation. Accordingly, the plaintiff's above assertion is justified within the scope

4. Conclusion

Therefore, the plaintiff's conjunctive claim seeking revocation of the penalty surcharge order of this case is accepted for the reasons of its reasoning, and all of the plaintiff's claim seeking confirmation of the main invalidation or revocation of the order of the penalty surcharge of this case among the lawsuit of this case is dismissed for all as unlawful. In addition, the plaintiff's claim seeking confirmation of the main invalidation or revocation of the order of this case among the lawsuit of this case, and the main claim seeking confirmation of the invalidation of the order of the penalty surcharge of this case shall be dismissed for the reasons above.

[Attachment]

Judges Yoon Sung-won (Presiding Judge)