[1] Criteria for determining whether an act of an enterprisers' organization under Article 26 (1) 1 and Article 19 (1) 1 and 2 of the Monopoly Regulation and Fair Trade Act unfairly limits competition

[2] The purpose of Article 26 (1) 3 of the Monopoly Regulation and Fair Trade Act which provides for "an act unreasonably restricting the business contents or activities of a member enterpriser" as a prohibited act of a member organization

[1] Articles 26(1)1, 19(1)1, and 19(1)2 of the Monopoly Regulation and Fair Trade Act prohibit an enterprisers' organization from unfairly restricting competition by either determining, maintaining, or changing the price of goods or services or by determining terms and conditions for the transaction of goods or services or payment of the price thereof. Here, whether an enterprisers' organization unfairly restricts competition should be determined by considering various circumstances such as the market share of the enterprisers' organization, the number of competitors, the power of supply, and substitution.

[2] The purport of Article 26 (1) 3 of the Monopoly Regulation and Fair Trade Act, which provides for "an act unreasonably restricting the business contents or activities of member enterprisers" as prohibited acts of member enterprisers, is that the enterprisers' organization originally aims at promoting the common interests of member enterprisers, and therefore, even if it is planned to restrict the member enterprisers' business activities by the organization's decision-making in order to achieve that purpose, it would not be permitted in a case where the contents of the resolution excessively restrict the business contents or activities of member enterprisers to the extent that it impedes fair and free competition among member enterprisers.

[1] Article 19 (1) 1 and 2, and Article 26 (1) 1 of the Monopoly Regulation and Fair Trade Act / [2] Article 26 (1) 3 of the Monopoly Regulation and Fair Trade Act

[2] Supreme Court Decision 96Nu150 delivered on May 16, 1997 (Gong1997Sang, 1759) Supreme Court Decision 2001Du175 delivered on June 15, 2001 (Gong2001Ha, 1625) Supreme Court Decision 2002Du5672 Delivered on September 24, 2002 (Gong2002Ha, 2585)

Plaintiff 1 and 14 others (Law Firm Namsan, Attorneys Jeon Dong-jin et al., Counsel for the plaintiff-appellant)

Defendant (Law Firmcheon, Attorneys Kim Yong-won et al., Counsel for the defendant-appellant)

Busan High Court Decision 2001Na6015 delivered on June 21, 2002

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

1. Regarding ground of appeal No. 1

A. Article 26(1)1 and Article 19(1)1 and 2 of the Monopoly Regulation and Fair Trade Act (hereinafter “the Monopoly Regulation and Fair Trade Act”) prohibit an enterprisers’ organization from unfairly restricting competition by either determining, maintaining, or changing the price, or by setting terms and conditions for the transaction of goods or services or by determining the price therefor. Here, whether such an act by an enterprisers’ organization unfairly restricts competition should be determined by taking into account various circumstances such as the market share of the enterprisers’ organization, the number of competitors, the power of supply, and the substitution.

According to the facts duly established by the court below, a resolution at an ordinary meeting of January 6, 200 (hereinafter "resolution of this case") at an ordinary meeting of 100 (hereinafter "the resolution of this case") shall be concluded with the association and the Busan Factory Co., Ltd. (hereinafter "Dong Cement") on the basis of collective bargaining rates, etc. between the association and the Busan Factory Co., Ltd. (hereinafter "Dong Cement"), and even if collective bargaining is not conducted on the unit price of ready-mixed transportation, the agreement of this case shall not be concluded individually in addition to collective bargaining, since it does not constitute an act of forming a joint awareness of the price of ready-mixed transportation and other transportation terms of this case. However, the resolution of the 19 U.S.C. 2 of this case shall not be deemed to be an act of unfairly restricting the private transportation contract of this case, and it shall not be deemed to be an act of the 19 U.S.C. 2 of this case to be an act of unfairly restricting the private transportation contract of this case.

Therefore, we cannot accept the allegation in the grounds of appeal that there were errors in the misapprehension of legal principles as to the invalidation of unfair collaborative acts by an enterprisers' organization as provided in Articles 26 and 19 of the Act.

B. The purport of Article 26(1)3 of the Act, which provides for a "act unreasonably restricting the business contents or activities of member enterprisers" as prohibited acts of member enterprisers, is that an enterprisers' organization originally aims at promoting the common interests of member enterprisers. Thus, even if it is planned to restrict a certain scope of member enterprisers' business activities by decision-making of an organization in order to achieve that purpose, it should not be permitted in a case where the contents of the resolution excessively restrict the business contents or activities of member enterprisers to the extent that it impedes fair and free competition among member enterprisers (see Supreme Court Decision 201Du175 delivered on June 15, 2001).

According to the facts duly established by the court below, since the resolution of this case may be subject to compulsory execution based on the notarial deed of expulsion and promissory note, the resolution of this case is limited to the determination and maintenance of the price of ready-mixed transport belonging to the freedom of individual enterprisers who are members of the association. However, according to records, individual enterprisers who object to the resolution of this case or refuse to prepare the notarial deed of promissory note can freely withdraw from the association and enter into a contract with the same cement and transport contract individually, and the purpose of the association itself is to determine and adjust the unit price of ready-mixed transport through group negotiation, so it is expected to impose certain restrictions on individual enterprisers' business activities in order to achieve its objective. Thus, the resolution of this case cannot be deemed to excessively restrict individual enterprisers' business contents or activities, thereby undermining fair and free competition among them. Thus, it does not constitute an act of unfairly restricting business activities or activities of member enterprisers as provided in Article 26 (1) 3 of the Act.

The judgment of the court below to the same purport is just and acceptable, and there is no error in the misapprehension of legal principles as to Article 26 (1) 3 of the Act, or by failing to exhaust all necessary deliberations as alleged.

2. Regarding ground of appeal No. 2

A. According to Article 8 of the resolution of this case, if an individual entrepreneur violates Articles 1 and 2 of the resolution, it shall not raise any objection even if compulsory execution based on a promissory note issued in the face value of KRW 10 million at the same time with the name of the third party. In light of the text of Article 8 of the resolution of this case and the contents of the resolution of this case, compulsory execution based on a promissory note and a No. 1 is separate measure, but the title of this case does not constitute a condition of compulsory execution based on a promissory note notarial deed.

Therefore, we cannot accept the allegation in the ground of appeal that the court below erred by misapprehending the legal principles as to the requirements for the claim of promissory notes.

B. Article 2 of the resolution of this case aims not to conclude a transport contract with the same cement individually in addition to collective action by an individual entrepreneur even if collective bargaining on the unit price, etc. of ready-mixed transportation between the Association and the East Cement is not carried out. Thus, even if collective bargaining between the Association and the East Cement has been put into place, as long as the plaintiffs have entered into a transport contract with the same cement personally with the status of an individual entrepreneur who is affiliated with the Association due to lawful withdrawal or expulsion from or expulsion from the Association, the above acts by the plaintiffs are deemed to violate Article 2 of the resolution of this case.

Therefore, we cannot accept the allegation in the grounds of appeal that the court below did not exhaust all necessary deliberations or erred by misapprehending the legal principles on interpretation of legal act.

3. As to the third ground for appeal

(a) It cannot be deemed that the Association ceased to exist in this case, in which there is no assertion or proof as to the completion of the liquidation procedures, even if the Association is no longer able to achieve the purpose of group negotiations between the same cement and the mediation and settlement of disputes between the individual entrepreneurs, as the individual entrepreneurs belonging to the Association terminate the contract of carriage from the same cement.

Therefore, we cannot accept the allegation in the grounds of appeal that the court below did not exercise the right of explanation or did not exhaust all necessary deliberations.

B. The allegation in the grounds of appeal, which is in violation of the principle of good faith, that a non-corporate association loses its existence basis and demands a maximum amount of sanctions against the withdrawing member in advance after the death of all of its members, is an unfair exercise of rights against the principle of good faith, and the court below's decision that the withdrawing member still remains within the association is based on the premise of facts duly admitted by the court below, which is contrary to the principle of good faith.

C. The following circumstances revealed based on the facts duly established by the court below, i.e., when an individual entrepreneur belonging to the Association violated Articles 1 and 2 of the resolution of this case, the resolution of this case shall be liable for the obligations of promissory notes, regardless of the occurrence of damages and the degree of damages. The president, the general affairs, and the members of the Association shall be liable for the obligations of promissory notes which are double the ordinary members and shall be expelled from the status of the members. In addition, in light of the developments leading up to the resolution of this case, if an individual entrepreneur belonging to the Association violates Articles 1 and 2 of the resolution of this case, etc. of this case, it shall be deemed that the obligations of this case shall belong to the Association and shall be in the nature of the penalty or penalty which indirectly forces the individual entrepreneur to perform his duties at the same time, and it shall not be accepted without any further determination on the grounds that the obligation of the promissory notes of this case has the nature of the liquidated damages.

4. As to the fourth ground for appeal

The court below rejected the plaintiffs' assertion that compulsory execution based on the promissory note notarial deed of this case is unfair since there is no possibility of violating the law as long as the plaintiffs had already withdrawn from the Association before entering into the same cement and shipping contract. The court below rejected the plaintiffs' assertion on the ground that there is no evidence to support the plaintiffs' withdrawal from the Association before entering into the same cement and shipping contract

In light of the records, the court below's measures are just and acceptable, and there is no error of law by misunderstanding facts against the rules of evidence as alleged.

5. Conclusion

Therefore, all appeals are 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 Yoon Jae-sik (Presiding Justice)