2014Du3877 Corrective order and revocation of a penalty surcharge payment order

Dongyang Life Insurance Co.

Fair Trade Commission

Seoul High Court Decision 2012Nu2322 Decided January 23, 2014

July 24, 2014

The appeal is dismissed.

The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The court below held that the first act is unlawful since the first act constitutes a single act on December 15, 201, on the grounds that the first act constitutes an illegal act on the following grounds: (a) the first act on several occasions from 1998 to 2000, which agreed to specify interest rates or to reduce together (hereinafter referred to as "the first act") and on the expected interest rates in the future from 2001 to 2006, and the first act on the basis of reflecting such information (hereinafter referred to as "the second act") should be deemed to constitute a single act; (b) even if the first act constitutes an illegal act, the second act is not constituted an illegal act due to the second act; and (c) the defendant's first act was already terminated at the specified time of the second act, and (d) the defendant's corrective order and the disposition of imposition of penalty surcharge (hereinafter referred to as "the second act") on the grounds that the five years have passed since it was on December 15, 201.

Examining the record in light of the relevant legal principles, such determination by the lower court is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal doctrine on the standard of determining whether there exists an unfair collaborative act among a series of acts.

2. As to the grounds of appeal Nos. 2 through 5

A. “Unfair collaborative acts” prohibited by Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) shall be deemed to include not only explicit agreements but also implied agreements as an agreement on an act of unfairly restricting competition. However, since the essence of the agreement between two or more enterprisers lies in the existence of the appearance of the “unfair collaborative act” listed in each subparagraph of the above provision, it cannot be deemed that there has been an agreement as a matter of course, and there should be proof of circumstances to recognize the reciprocity of the communication between the enterprisers, and the burden of proof on such agreement lies in the Defendant who is ordered to take corrective measures on the ground of such agreement (see, e.g., Supreme Court Decision 2012Du17421, Nov. 28, 2013).

In addition, in cases where competition enterprisers exchange information on major competitive factors, such as price, the exchange of such information can be a means to facilitate or facilitate collusion by removing uncertainty on the decision-making of price, etc. Thus, it can not be concluded that there exists an agreement on an act of unfairly restricting competition among the enterprisers. However, it cannot be concluded that there exists an agreement on an act of unfairly restricting competition solely on the basis of the information exchange. The determination of whether there exists an agreement should be made by comprehensively taking into account all the circumstances, such as the structure and characteristics of the relevant market, the nature of the exchanged information, the subject and timing of the information exchange, the purpose and intent of the information exchange, the degree of difference between the enterprisers such as price and output after the information exchange, the process and contents of the decision-making, and other factors such as the impact of the information exchange on the market.

B. On the grounds indicated in its reasoning, the lower court determined that the Defendant’s disposition of this case premised on the Plaintiff’s unfair collaborative act with 15 life insurance companies, including Samsung Life Insurance Co., Ltd., in relation to the scheduled interest rate and new publication interest rate from 2001 to 2006, was unlawful, on the ground that it is insufficient to recognize that there was an unfair collaborative act between Samsung Life Insurance Co., Ltd., Hanan Life Insurance Co., Ltd., Ltd., and Samsung Life Insurance Co., Ltd., Ltd., with a higher market share, and that there was insufficient reason to recognize that there was an unfair collaborative act based on price collusion between the remaining 12 insurance companies.

Examining the record in light of the aforementioned legal principles, the lower court’s aforementioned determination is justifiable. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine regarding the establishment of unfair collaborative acts, such as the agreement of collaborative acts, proof of communication, and the external appearance of the act, or by failing to exhaust all necessary deliberations or by inconsistency with the logical and empirical rules

3. 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 Kim Chang-suk

Justices Yang Chang-soo

Justices Ko Young-han

Justices Jo Hee-de