Bosa Development Co., Ltd. and 3 others (Law Firm, Kim & Lee, Attorneys Oi-seok et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Sejong, Attorneys Gyeong-hee et al., Counsel for defendant-appellant)

September 29, 2010

1. Of the corrective orders and penalty surcharge payment orders listed in the separate sheet No. 209-214 of October 16, 2009, the corrective orders listed in the separate sheet No. 2009-214 against the plaintiffs Bochip Development Co., Ltd., Bochip Co., Ltd., and Bochip Co., Ltd., the corrective orders listed in paragraphs (1) and (2), and the corrective orders listed in paragraphs (3) and (2) against the plaintiffs are revoked.

2. The remaining claims of the Plaintiff Bochip Co., Ltd are dismissed.

3. Of the costs of lawsuit, the part arising between the plaintiff Bosa Development Co., Ltd., Bosa, Bosaf Co., Ltd. and the defendant is borne by the defendant, while the part arising between the plaintiff Bosaf Co., Ltd. and the defendant is borne by the plaintiff Bosaf Co., Ltd. and the defendant respectively.

The defendant's corrective order and penalty surcharge payment order stated in the attached Form 1 List No. 2009-214 of October 16, 2009 shall be revoked.

1. Details of the disposition;

A. Status of the plaintiffs

The plaintiff Bosa Development Co., Ltd., Bosaf Co., Ltd., Bosaf, Bosaf Co., Ltd., and Bosabaf Co., Ltd. (hereinafter respectively referred to as " Bosaf Development"), " Bosaf," " Bosaf," " Bosaf," " Bosaf," and " Bosaf," are a person who is engaged in a mutual aid service and is a business under subparagraph 3 of Article 2 of the Act on Fair Labeling and Advertising (amended by Act No. 9785, Jul. 31, 2009; hereinafter referred to as the "Act"). The general status of the plaintiffs is as shown in Table 1>

Table 1> The general status of plaintiffs

A table (unit: KRW 3,387 300 8300 831200 gram 15, 1995 on April 15, 1995 referred to as "22,087 22,421 and 62 Sclar on January 1, 1994" means the number of regular employees of the current status of major financial status of the type of the business as of the date of incorporation of the company, and the total amount of capital sales of the total amount of assets of the company.

B. Plaintiffs’ advertising act

(1) From June 1, 2007 to April 2, 2009, through the same Internet homepage (Internet address 1 omitted; hereinafter “group homepage”) from June 1, 2007 to the same Internet homepage, the Plaintiffs advertised that the performance of mutual aid services is guaranteed to its members regardless of the existence or abolition of the company, such as “The instant advertisement” (hereinafter “the instant advertisement”). The Plaintiff Boscison separately from the Plaintiff’s website (Internet address 2 omitted). In addition, even if it is inevitable for a company to close its business, the Plaintiff made an advertisement that the company received the same content as the goods specified in the contract and the terms and conditions through Korea’s mutual aid guarantee (hereinafter “Plaintiff Boscison advertisement”).

The contents of the plaintiffs' Group 1

A person shall be appointed.

The contents of an advertisement on his own website (from June 1, 2007 to April 2, 2009),

A person shall be appointed.

(B) From May 7, 2008 to December 26, 2008, the Plaintiffs advertised that they comply with the standard terms and conditions of mutual aid services (hereinafter “standard terms and conditions”), such as

A person shall be appointed.

1. Television advertisements;

2. Advertisement in the central daily newspaper;

The contents of the above advertisement shall be as follows:

Table 2 â………§ 2 of the Advertisement

The size of advertisements for the advertising period from May 6, 2008 to June 6, 2008 to 6.30, 374 to 6.30 seconds from May 30, 2008 to May 6 to 6.30, 2008, 392 520 Internet from May 9 to 7.11, 208 - the sports 6.26 x 15 cm x 37 cm 16 cm from May 26, 208 to December 26, 2008, in compliance with the standard terms and conditions of the Fair Trade Commission, such as the frequency of advertising advertisements for the advertising period, and compliance with the standard terms and conditions of the standardized contract of the Fair Trade Commission.

C. The defendant's disposition

Accordingly, the Defendant made a corrective order and a penalty surcharge payment order (hereinafter “instant disposition”) against the Plaintiffs under Article 3(1)1 of the Act on October 16, 2009, on the ground that (1) even if its company closes its business, the Plaintiffs advertised its members through the exercise guarantee system or the commercial assistance guarantee company, and (2) as if they use the standardized terms and conditions approved by the Defendant as they are, or as if they use terms and conditions that do not contain any more unfavorable contents than the standardized terms and conditions, the Defendant expressed them as “compliance with the standardized terms and conditions” or “compliance with the commercial assistance standard terms and conditions.”

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, Eul evidence Nos. 4 and 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The advertising of this case was posted on the Group website and its operation and management, and the subject of cost-bearing is the Plaintiff’s Bolarp. Thus, the remaining Plaintiffs, except the Plaintiff Bolarp, are not the subject of the instant advertising act.

(2) Even if the plaintiffs are advertising entities, there was no fact that the plaintiffs made an advertisement to mislead consumers as to whether they observe the scope of mutual aid and guarantee, and even if objectively, there is no reasonable ground to mislead consumers as to the scope of mutual aid and guarantee and whether they observe the insurance terms and conditions. Thus, the instant advertisement is not a false or exaggerated advertisement as prescribed by the law.

(b) Related statutes;

Act on Fair Labeling and Advertising

Article 3 (Prohibition of Unfair Labeling or Advertising)

(1) No business operator, etc. shall engage in any of the following acts, which are likely to deceive or mislead consumers, and are likely to undermine fair trade order, or have another business operator, etc. conduct such acts:

1. False or exaggerated labeling or advertising;

(2) Detailed matters concerning the acts referred to in the subparagraphs of paragraph (1) shall be prescribed by Presidential Decree.

Article 7 (Corrective Measures)

(1) When any business operator, etc. places unfair labeling or advertising in violation of Article 3 (1), the Fair Trade Commission may order the relevant business operator, etc. to take any of the following measures to correct such violation:

1. Suspension of the relevant violation;

2. Public announcement of the fact of receiving the corrective order;

Enforcement Decree of the Act on Fair Labeling and Advertising

Article 3 (Details of Unfair Labeling and Advertising)

(1) The false or exaggerated labeling or advertising under the provisions of Article 3 (1) 1 of the Act shall be those which display or advertise differently from the fact or excessively unfasible facts.

(c) Fact of recognition;

The following facts are acknowledged in full view of Gap evidence 3-1, 2, Gap evidence 4, 5, 8, 10, Eul evidence 3, and part of Gap evidence 11 and 12, and the whole purport of the pleadings. Contrary to this, the part of Gap evidence 12 is difficult to believe, and it is insufficient to reverse the above recognition merely by the statement of Gap evidence 9.

(1) The Plaintiffs’ practice is a kind of prepaid installment transaction in which the Plaintiffs are provided with services or goods related to funeral and marriage, and the structure of the mutual aid service transaction is a kind of prepaid installment transaction in which the consumers are provided with mutual aid services from the Plaintiffs when they become members of the Plaintiffs, pay the price of goods selected by them in lump sum or in installments.

(2) On the Internet homepage of the company from May 1, 2007 to July 31, 2007 (Internet Address 3 omitted) the Plaintiff’s development advertised that “if the company inevitably discontinues its business, it would cause the company to be provided with the same contents as the goods specified in the contract and the terms and conditions through the mutual aid guarantee, even if it would inevitably discontinue its business,” the Defendant would not make any false or exaggerated advertisement about the scope of the mutual aid guarantee from the Defendant on March 6, 2008, and on or around April 1, 2008, the Defendant’s corrective order was issued to delete the terms and conditions related to the mutual guarantee and publicly announced the fact that it received the corrective order from the Defendant.

(3) In order to advertise the same product and sell it to each region, the Plaintiffs integrated the group website and the representative telephone number of goods and subscription questions, and integrated management of the members data by joining the Plaintiffs’ members according to the business region of each Plaintiff, such as the Plaintiff’s Table 3, through the representative inquiry phone integrated with the Plaintiff’s call center, which is the Plaintiff’s Bolar.

Table 3> The status of the plaintiffs' business area

The development of well-influencies in the name of the voting company located in the main sentence - Busan, Daegu, Daegu, Gyeongnam, Chungcheongnamnam, Daejeon, Daejeon, Chungcheongnamnam Scenz, Chungcheongnamnam Scenz, - Seoul, the Gyeonggi-do, Gangwon, Chungcheong, Chungcheongnam, Gwangju, Jeonnam, Jeonnam, Jeonbuk-North Scenzenzers - Seoul, and Incheon

(4) In addition to the group website that bears the operating cost, the Plaintiff Bolle did not recruit its members through the website of the company (Internet address 2 omitted).

(5) Even at the time of the instant disposition, there is no legal guarantee system in the commercial operation, and the commercial operation guarantee company and the national commercial operation guarantee company, established by the commercial operation companies belonging to the trade association related to the commercial operation, guarantee the provision of monetary payment or the provision of commercial operation services to the commercial operation members within the limit of the amount paid by the members or the "amount paid". Article 7 (Scope of Guarantee) of the Korea Commercial operation Guarantee Company in which the plaintiffs joined and the Regulations on the Entrustment Payment of Korea in which the plaintiffs joined and the Regulations on the Entrustment of the commercial operation of the commercial operation guarantee company, respectively, provide the commercial operation services to the commercial operation members or directly pay the amount within the amount entrusted by the plaintiffs to the members within the limit of the amount deposited by the plaintiffs. However, as shown in Table 4, the amount entrusted by the plaintiffs to the commercial operation guarantee company as of March 3, 2009 through 4.4% of the total amount received by the plaintiffs from the members.

Table 4> Details of entrustment by the plaintiffs to the mutual aid and guarantee company

The table (as of March 31, 2009, as of March 31, 2009, as of the unit: million won) Plaintiff Guarantee Company’s total amount of payments (A/B) entrusted by the Plaintiff Guarantee Company (A/B) 2,908 (A/B) 93,1308,130.1% credit guarantee (State) 4,154,130.4% credit guarantee (State) 93,130,1304, 4.4% credit guarantee (State) 1,9326,687, 3669, 513.8% credit 369,51.8% credit 2,2534.0% credit 6,542,171,538% credit 13.8% credit 3.8% credit -

(6) In relation to the standard terms and conditions approved by the Defendant, the Plaintiffs are using the same terms and conditions as the attached Table 5>

Table 5. Table 5. Table 1. Table comparing the plaintiffs' terms and conditions

(2) In cases where a member pays in whole or in part the amount paid in advance, the company may discount the total amount paid in advance at the rate agreed in advance, if the member exercises his/her service within 12 months from the date of advance payment (12 years from the date of advance payment) - Articles 12 (Provision of Services) and 12 (Provision of Services) of the terms and conditions that require the member to return advance payment - Where a change occurs in an area where the services are to be provided due to such reasons as a director, etc. (2) A company shall cooperate with the company where the area where the services are to be provided is to be changed due to such reasons as a director, etc. (2) A company shall, notwithstanding the provisions of Article 15 (Cancellation of Contracts and Cancellation of Contracts) (2) a member shall bear the expenses paid in advance at the time of the cancellation of the contract after the withdrawal of the service, and (4) a member shall, notwithstanding the provisions of paragraph (2) a refund after the cancellation of the contract, pay in full after the cancellation of the contract.

D. Determination

(1) The subject of the instant advertisement

According to the above facts of recognition, it is reasonable to view that the plaintiffs jointly conducted the advertisement of this case through the group website. Since the plaintiffs are all the substantial entities of the advertisement of this case, the plaintiffs' assertion about the advertisement of this case cannot be accepted.

(2) Whether the instant advertisement is false or exaggerated advertisements

(A) The false or exaggerated advertisement as referred to in Article 3 (1) 1 of the Act refers to an advertisement that is different from the fact or excessively unfasible to the fact and is likely to deceive or mislead consumers, and thus, likely to undermine fair trade order. Whether the advertisement is likely to deceive or mislead consumers should be objectively determined on the basis of the overall and extreme increase that general consumers with common caution receive the advertisement in question (see, e.g., Supreme Court Decisions 2007Da59066, Jul. 22, 2010; 2002Du6965, Jun. 27, 2003).

(B) Advertisements related to the performance guarantee of mutual aid services

With regard to the "Guarantee of the Implementation of Services through the Commercial Aid Guarantee System", which is the statement in the order column of the written resolution of this case, the plaintiffs' false and exaggeratedness of the advertisement of this case, as seen above, are not expressed, but merely the "Exercise Guarantee System", which was ordered to be advertised at the pre-site (Internet address 3 omitted), and it is difficult to see that the general consumers abutting on the advertisement of this case are able to be able to safely receive the above services through the Commercial Aid Company even if the plaintiffs fail to operate the company any longer due to closure of business, etc. Thus, it is reasonable to see that the plaintiffs' offering of the above part of the disposition of this case, excluding the plaintiff's offering of services, is a product guaranteed through the Commercial Aid Guarantee System, and thus, it is reasonable to see that the plaintiff's offering of services was unlawful or likely to hinder the conclusion that the plaintiff's offering of the corrective order of this case's offering of services is a part of the disposition of this case's offering of services, and thus, it is reasonable to excluding the payment order of the plaintiff's offering of services.

(C) Advertisement that complies with standard terms and conditions

The plaintiffs' compliance advertisements are likely to mislead or mislead consumers as being no less favorable than the standard terms and conditions. (1) It is reasonable in terms of the following: (2) it is reasonable in terms of the integrity of the ordinary terms and conditions to allow the plaintiffs to return advance payment when they offer their services to early members; (2) there is no ground to interpret that the provision that "the company must cooperate with it;" when the standardized terms and conditions stipulate a change in the area where the services are to be provided due to the reasons of the members; (3) it cannot be deemed that the standard terms and conditions are unreasonable or unreasonable to impose the expenses on the members who are the causes of the occurrence of additional costs; and (3) it is unreasonable to consider that the basic terms and conditions are not clearly defined in the standard terms and conditions after the plaintiffs' arrival in the event site due to reasons attributable to the members; and (4) it is unreasonable to consider that the basic terms and conditions are less unreasonable than that of the plaintiffs' daily life beneficiaries who are subject to disposition, and that the plaintiffs' basic terms and conditions are not subject to redemption before the cancellation of the standard terms and conditions.

3. Conclusion

If so, the claims of the plaintiff Bolim Development Co., Ltd., Bolimf Co., Ltd., Bolimf Co., Ltd., and Bolimf Co., Ltd. are accepted on the grounds of their reasoning, and the claims of the plaintiff Bolimf Co., Ltd. are justified only for the part of seeking the revocation of each corrective order stipulated in Articles 1-b and 2-b of the correction order and the penalty surcharge payment order. The remaining claims are dismissed as they are without merit. It is so decided as per Disposition.

Judges Yellow-gu (Presiding Judge)