[1] The case affirming the judgment below holding that Gap corporation et al. is liable for damages on the ground of violation of Article 19 (1) 1 and 3 of the Monopoly Regulation and Fair Trade Act, in case where eight smuggling manufacturers and distributors, including Gap corporation, jointly restricting the quantity of smuggling (sale) and determining, maintaining, and changing the price of smuggling, and Eul corporation et al. who purchased smuggling from Gap corporation et al. claimed damages against Gap corporation et al.

[2] The probative value of appraiser's appraisal result

[3] The case affirming the judgment below which adopted the appraisal result of the first instance court appraiser who calculated the amount of the company Eul's damages by means of a quantitative economic analysis using any further variables after collusion, in case where eight smuggling manufacturers and distributors jointly engaged in the most of the market share in the Republic of Korea such as Gap corporation, and determined, maintained, and changed the price of the smuggling, and Eul corporation, etc. who purchased the smuggling from Gap corporation, etc. claimed damages against Gap corporation et al.

[4] Method of calculating the amount of damages caused by illegal price collusion, and in a case where a purchaser who purchased goods, etc. whose price was increased by the collusion sells them to a third party, or a product produced by using and processing such goods, etc. to a consumer, whether it can be readily concluded that the purchaser’s damage was reduced or recovered due to the price increase in the product (negative in principle)

[5] In a case where eight smuggling manufacturers and distributors, such as Gap corporation, etc., jointly restricting the quantity of smuggling (sales volume) and determining, maintaining, and changing the price of smuggling, and Eul corporation, etc., purchased the smuggling from Gap corporation, etc. claimed damages against Eul corporation, etc., the case affirming the judgment below which denied the defense that Gap corporation, etc.'s incentives paid to Eul corporation and the amount of damages transferred by the price increase of Eul's product products should be deducted from the amount of damages suffered by Eul corporation, etc., and limited Gap corporation's liability for damages in consideration of such circumstances

[1] In a case where eight smuggling manufacturers and distributors, including Gap corporation, etc., jointly engaged in the most of the domestic smuggling market share, determined, maintained, and changed the price of the smuggling, and Eul corporation, etc., who purchased the smuggling from Gap corporation, etc. claimed damages against Gap corporation, etc., the case affirming the judgment below which held that Gap corporation, etc., was liable for damages suffered by Eul corporation, etc., since Gap et al.'s act constitutes a collaborative act that unfairly reduces or restricts competition in the manufacturing and sales market, which constitutes a violation of Article 19 (1) 1 and 3 of the Monopoly Regulation and Fair Trade Act.

[2] As long as the appraisal method, etc. is against the rule of experience or unreasonable, the appraiser’s appraisal result shall be respected.

[3] The case affirming the judgment below which adopted the appraisal result of the appraiser of the first instance court, who calculated the amount of damages of the company Eul, based on the competition price of the smuggling, in case where eight smuggling manufacturers and distributors, including Gap corporation, etc., jointly restricted the quantity of the smuggling (sale) and determined, maintained, and changed the price of the smuggling, and Eul corporation, etc., who purchased the smuggling from Gap corporation, claimed damages against Gap corporation, etc.

[4] Damage arising from tort refers to a difference in the property status that existed in the absence of an illegal act and property status that caused the illegal act to the creditor or the victim. In addition, where profits were inflicted at the same time, such profits should be deducted when calculating losses without waiting for the allegations of the parties. However, in order to allow a offsetting of profits and losses, there should be a proximate causal link between the victim’s new profits and the act of causing damages. In light of the above, where the purchaser purchased goods or services whose price was increased by illegal collusion (hereinafter “goods, etc.”) and the price calculated if there were no actual purchase price and collusion (hereinafter “provisional competition price”), the difference between the purchaser’s price increase in the sales price of the goods, such as the goods and the goods at the time of price increase (hereinafter “price increase”) can be determined by comprehensively taking into account the factors such as the price increase in the goods, such as price increase in the goods, etc., without considering such factors as the price increase in the goods or the goods’ price increase, etc., which would have been easily determined by the purchaser’s price increase in the goods.

[5] In a case where eight smuggling manufacturers and distributors, including Gap corporation, etc., jointly agreed to limit the amount of damages caused by smuggling and jointly agreed to, maintain, and change the amount of damages caused by Gap corporation, etc., Eul corporation, etc., which purchased smuggling from Eul corporation, sought compensation for damages against Eul corporation, etc., the case affirming the judgment below which restricts Eul corporation's liability for damages by taking account of the above circumstances, such as the payment of incentives and the damages incurred by the increase in the price of the products, on the ground that Eul corporation, etc., which purchased smuggling with the price raised by the collusion, transferred all or part of the amount of damages caused by the collusion, to the final consumer.

[1] Articles 19(1)1, 19(1)3, and 56 of the Monopoly Regulation and Fair Trade Act / [2] Article 202 of the Civil Procedure Act / [3] Articles 19(1)1, 3, and 56 of the Monopoly Regulation and Fair Trade Act; Article 202 of the Civil Procedure Act / [4] Articles 19(1) and 56 of the Monopoly Regulation and Fair Trade Act; Articles 393 and 763 of the Civil Act / [5] Articles 19(1) and 56 of the Monopoly Regulation and Fair Trade Act; Articles 393 and 763 of the Civil Act

[2] Supreme Court Decision 2004Da70420, 70437 Decided February 22, 2007 / [4] Supreme Court Decision 2003Da69638 Decided October 28, 2005 (Gong2005Ha, 1847) Supreme Court Decision 2009Da91828 Decided April 29, 2010 (Gong2010Sang, 99Da98652 Decided April 28, 2011) Supreme Court Decision 2010Da18850 Decided July 28, 201 (Gong201Ha, 1740)

Sam Food Co., Ltd. (Bae & Yang LLC, Attorneys Yang Ho-ho et al., Counsel for the defendant-appellant)

C&C Co., Ltd. (Attorneys Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Samyang Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Su-seok et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na65012 decided October 14, 2010

All appeals are dismissed. The costs of appeal are assessed against each appellant.

The grounds of appeal are examined.

1. As to the Defendants’ grounds of appeal regarding the occurrence of liability for damages caused by collusion

(1) The lower court: (1) based on its evidence, determined that the Defendants were unable to reach an agreement on restricting and allocating the supply price in the domestic smuggling market for the purpose of preventing damages caused by the price decline in excess of 2002, including the Plaintiff’s 20-year market price increase by holding a meeting on September 1, 2007 and succeeding to the rights and obligations of the corporation; (2) since the Defendants were unable to reach an agreement on the increase in 10-year market price of the instant case, the Defendants’ act of restricting and allocating the supply price of the goods to the Plaintiff, including the Plaintiff’s 3-year market price increase and 2-year market price increase by taking account of the agreement on the increase in 1-year market price of the Defendants, including the Plaintiff’s 1-year market price and the 1-year market price of the goods, and the Defendants’ act of restricting and allocating the supply price of the goods to the Plaintiff in excess of 2-year market price of the 1-year market price of the 2-year market price.

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 the occurrence of liability for damages caused by collusion, such as the scope of impact on collusion, as alleged in the ground of appeal.

2. As to the grounds of appeal by the Plaintiff and the Defendants relating to the use of any further variables after collusion and the selection of appraisal results

The appraiser's appraisal result shall be respected unless there is a significant error such as the appraisal method against the rule of experience or unreasonable (see Supreme Court Decision 2004Da70420, 70437, Feb. 22, 2007).

After finding the facts as stated in its holding, the lower court determined that the use of any further variable after the collusion with the first instance court appraiser cannot be deemed as simply based on the possibility, and that the use of any further variable after the collusion did not seem to be contrary to the empirical rule or unreasonable, in light of the fact that the powder price after the collusion in this case was not immediately lowered at the price prior to collusion.

Examining the reasoning of the lower judgment in light of the aforementioned legal principles and evidence duly admitted, the lower court’s determination that adopted the appraisal result of the first instance trial appraiser, which calculated the Plaintiff’s damages on the premise of the competition price of smuggling, based on which the method of appraisal, etc. was contrary to the empirical rule or unreasonable, and did not err by adopting the appraisal result, or by misapprehending the legal doctrine on the calculation of damages and the scope of compensation for damages, etc., inasmuch as it adopted the appraisal result of the first instance trial appraiser, which calculated the Plaintiff’s damages on the premise of the price of smuggling’s competition, based on which collusion was calculated, as a result of revolving analysis, which is a method of measurement and economics analysis.

3. As to the grounds of appeal by the Defendants relating to the damages advance through the payment of incentives and the increase in product prices

A. Damage caused by a tort refers to the difference between the property status that existed in the absence of the illegal act and the property status that caused the illegal act (see, e.g., Supreme Court Decisions 2009Da91828, Apr. 29, 2010). In addition, in a case where the illegal act, etc. causes damage to the creditor or the victim at the same time, the profit should be deducted when calculating the damage without waiting for the party’s assertion. However, in order for the offset of profit and loss to be permitted, there should be a proximate causal link between the act causing the damage and the act causing the damage (see, e.g., Supreme Court Decisions 2003Da69638, Oct. 28, 2005; 2009Da98652, Apr. 28, 2011).

In light of the foregoing, where the price of goods or services increases due to illegal price collusion (hereinafter “goods, etc.”) is purchased, the difference between the actual purchase price and the price that would have been formed in the event that there was no collusion (hereinafter “provisional competition price”), barring any special circumstance, in the event that direct damage was inflicted by the purchaser. Here, virtual competition price is calculated by the method of excluding only the increase in the price caused by the collusion while maintaining other factors for price formation in the pertinent market where the collusion act occurred as it is (see Supreme Court Decision 2010Da1850, Jul. 28, 2011).

In addition, in cases where a purchaser of goods, etc. whose price has been increased by collusion sells them to a user who is a third party, or sells a product manufactured by using or processing such goods, etc. as raw materials, barring special circumstances where an agreement is made to automatically include the price increase of goods, etc. in the prices of the goods, etc., the price increase of the goods, etc. shall be determined by taking into account various circumstances, such as market conditions of the goods, etc. at the time of the price increase, other raw materials or personnel expenses, possibility of sales increase due to price increase, purchaser’s business situation, and new delivery related to customer protection, and thus, it cannot be concluded that the price increase of the goods, etc. reflects the price increase in the goods, etc., or that the increased price of the goods, etc. reflects the price increase in the goods, etc. as it can be concluded that there is a reasonable proximate causal relation between the price increase in the goods, etc. and the price increase in the goods, etc. as a result of the reduction of demand for the goods, etc., leading to the price increase in total damages.

B. (1) The lower court determined that: (a) the Plaintiff’s payment of damages incurred to the Plaintiff during the collaborative period due to the price increase by the Defendants’ collusion was 2,981,843,190 won; and (b) the Plaintiff’s payment agreement was made for the purpose of increasing sales while selling the Plaintiff, and (c) the payment agreement was continued after the collaborative period; and (d) the Plaintiff’s payment agreement was made for the Defendants’ payment of the incentive even after the price increase by the Defendants’ price increase by the aforementioned collaborative act was not reasonable; (b) the Plaintiff’s payment of the incentive was not in line with the Defendants’ payment of the incentive to the extent that there was no reasonable causal link between the Defendants’ price increase by the aforementioned collaborative act and the Defendants’ payment of the incentive was made; (c) the Plaintiff’s payment of the incentive was in line with the Plaintiff’s final purchase price increase by the Plaintiff’s price increase by the price increase by the Plaintiff’s total or partial amount of damages incurred to the Defendant’s final purchase price increase by reason of the price increase by the Plaintiff’s price increase by the above.

C. Examining the reasoning of the lower judgment in light of the evidence duly admitted, there are some parts in the reasoning of the lower judgment, but the lower court appears to have been in accordance with the legal doctrine as seen earlier. In so doing, it did not err by misapprehending the legal doctrine on the assessment of damages caused by collusion and the scope of compensation for damages, thereby affecting the conclusion

4. As to the grounds of appeal by the Plaintiff and Defendant C&C relating to limitation on liability for damages

The limitation of the defendant's liability ratio in a damage compensation case due to a tort is an exclusive authority of a fact-finding court unless it is deemed that the limitation is substantially unreasonable in light of the principle of equity (see Supreme Court Decision 2009Da29366, Mar. 24, 2011).

According to the reasoning of the judgment of the court below, the court below held that ① the appraiser of the first instance court calculated the number of damages of the plaintiff using an explanatory variable for the period after collusion as an explanatory variable, but the price was returned to the competition price at a certain point in the above period, the amount of damages can be excessively assessed, ② since the incentive paid by the defendants to the plaintiff is substantially high in the transaction relationship between the plaintiff and the defendants and the promotion of market competition, it is reasonable in light of the principle of good faith to consider the amount of damages calculated, but the appraiser of the first instance court did not consider the incentive paid by the plaintiff in calculating the amount of damages on the ground that the amount of incentive claimed by the parties differs from the amount of incentive claimed by the parties, so it can be deemed that the above amount of damages was excessively assessed (after the appraisal result of the first instance court was submitted to the court, the parties did not dispute that the amount of damages should be deducted from the amount of damages or that the amount of damages should be considered in determining the amount of damages. ③ Since part of the damages suffered by the defendants were reduced to the consumers, the purpose of establishing the Monopoly Regulation and Fair Trade Act and Fair Trade Act is ultimately to protect the consumers.

Examining the reasoning of the judgment below in light of the records, the court below's measures that the Defendants limit the amount of damages to each of the Defendants as above are based on the legal principles as seen earlier, and it cannot be deemed unreasonable in light of the principle of equity. In so doing, contrary to what is alleged in the grounds of appeal by the Plaintiff and Defendant CC, there were no

5. As to the Plaintiff’s grounds of appeal related to the revocation of an expression of intent caused by fraud or mistake

(1) The lower court determined that, as long as it is difficult to view that the Defendants were aware of the competition price of smuggling, it is difficult to view that they were obligated to notify the Plaintiff of the non-Recognizing competition price, and that the Defendants committed an unfair collaborative act prohibited under the Monopoly Regulation and Fair Trade Act, and thereby, even if their market price was higher than the competition price was formed, the Defendants were obligated to notify the Plaintiff of the fact that they committed an unfair collaborative act. (2) The lower court determined that the Defendants cannot cancel the sale contract on the grounds of fraud or mistake, as an error in the motive of the decision to purchase the smuggling’s intent to purchase the smuggling, cannot be deemed as an error in the important part of the legal act. Furthermore, insofar as it is difficult to view that the Defendants were obligated to notify the Plaintiff of the fact that the Defendants committed an unfair collaborative act or committed an unfair collaborative act, it cannot be deemed that there was any error in the Plaintiff’s competition price.

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 regarding the revocation of declaration of intent caused by fraud or mistake, as otherwise alleged in the ground of appeal.

In addition, as long as we do not accept the allegation in the grounds of appeal disputing the judgment of the court below that the sales contract of this case cannot be revoked on the grounds of fraud or mistake, the remaining grounds of appeal by the plaintiff disputing the judgment of the court below as to the amount of damages on the assumption of the case where the revocation on the grounds of fraud or mistake is recognized. Thus, we cannot accept it without further review.

6. Conclusion

Therefore, all appeals are dismissed and the costs of appeal are assessed against each appellant who has lost. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)