[1] Method of determining the degree of gravity of a violation caused by an unfair collaborative act and the legal nature of the imposition of penalty surcharges against a violation of the Monopoly Regulation and Fair Trade Act (= discretionary act)

[2] In a case where Gap corporation engaged in construction business applied for reduction or exemption on the ground that it is a person excluded from the reduction or exemption of penalty surcharges pursuant to Article 35(1)6(a) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, which was amended by the Fair Trade Commission, to apply for reduction or exemption as a second-class investigator for unfair collaborative acts, the case holding that Gap corporation's application of the above provision is not deprived of Gap corporation's right to apply for reduction or exemption by retroactive legislation, even if Gap corporation's investigation cooperation was commenced after the enforcement of the amended Enforcement Decree, and Gap corporation's application of the above provision is not deprived of Gap corporation's right to apply for reduction or exemption by retroactive legislation

[1] Articles 6, 17, 22, 24-2, 28, 31-2, and 55-3 of the Monopoly Regulation and Fair Trade Act; Article 27 of the Administrative Litigation Act / [2] Article 22 of the Monopoly Regulation and Fair Trade Act; Article 35 (1) 6 (a) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act; Article 2 of the Addenda ( June 19, 2012)

[1] Supreme Court Decision 2000Du1713 Decided September 24, 2002 (Gong2002Ha, 2574) Supreme Court Decision 2009Du12082 Decided May 26, 201

Large Construction Co., Ltd

Fair Trade Commission (Attorney Kim Jong-sik et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2014Nu49189 decided September 11, 2015

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 2

The degree of gravity of a violation caused by an unfair collaborative act shall be determined by comprehensively taking into account the degree of undermining competition order caused by the violation, the impact and ripple effect on the market, the degree of damage to related consumers and enterprisers, the degree of unjust enrichment, and whether to acquire unjust enrichment (see Supreme Court Decision 2009Du12082, May 26, 201). Meanwhile, the Fair Trade Commission has discretion as to whether to impose a penalty surcharge on a violation of the Fair Trade Act and to determine the amount of penalty surcharge specifically within a certain scope prescribed by statutes in the event of imposing a penalty surcharge. Thus, the imposition of a penalty surcharge by the Fair Trade Commission is discretionary act. However, if the Fair Trade Commission erred by misapprehending the facts that form the basis for imposing a penalty surcharge while exercising the discretion, or if there are reasons such as violating the principle of proportionality and equality, it constitutes deviation or abuse of discretionary power (see Supreme Court Decision 200Du1713, Sept. 24, 2002

The lower court determined that, inasmuch as the Plaintiff participated in the bidding formally so that KS Construction Co., Ltd. (hereinafter “SK Construction”) can be awarded a contract price of KRW 101.2 billion by a single bid, the instant collaborative act does not have any apparent effect on restricting competition, but it appears that the instant collaborative act does not have any effect of increasing efficiency, the lower court held that the instant collaborative act did not err in the imposition of the penalty surcharge in this case, on the grounds that: (a) the instant collaborative act constitutes “an act of significant violation”; (b) it is difficult to deem that the Plaintiff did not gain any profit accrued from the instant collaborative act; and (c) the Defendant reduced the basic penalty surcharge on the grounds that the Plaintiff was deprived of the bid.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just, and there are no errors in the misapprehension of legal principles as to the recognition of gravity of violation and deviation and abuse of discretionary power in the calculation of penalty surcharges, etc.

2. As to the third ground for appeal

Article 35(1)6(a) of the Enforcement Decree of the Fair Trade Act (hereinafter “Enforcement Decree of the Fair Trade Act”) provides that “In the case where two enterprisers participate in unfair collaborative acts and are one of them,” the term of “in the case of two enterprisers,” the provision of this case shall not be reduced due to the second voluntary reporters or investigators for investigation as stipulated in Article 35(1)3 of the said Enforcement Decree. The instant provision was newly established as amended by Presidential Decree No. 23864, Jun. 19, 2012; Article 2 of the said Addenda (hereinafter “the Addenda of this case”) provides that the instant provision shall apply from the time when voluntary declarations or cooperations are made after the enforcement of the said Enforcement Decree.

As long as the Plaintiff started investigation cooperation only on February 24, 2014, the lower court determined that: (a) as the instant provision was applied pursuant to the Addenda of the instant case, the Plaintiff cannot be subject to reduction of penalty surcharges, etc.; and (b) furthermore, even in cases where an unfair collaborative act was terminated prior to the amendment of the Enforcement Decree of the Fair Trade Act in accordance with the Addenda of the instant case, the application of the instant provision to voluntarily report or cooperate in investigation after the enforcement thereof does not deprive the business operator

In light of the relevant legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the prohibition of retroactive legislation.

3. Conclusion

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 Yong-deok (Presiding Justice)