In a case where an enterprise with a high market share in the over-market has determined its own price in advance, and then the competitor gives rise to the price increase, and where the business entity is aware of all the circumstances because the practice has accumulated for a considerable period of time, whether the agreement related to the price determination can be recognized as an agreement on an act of unfairly restricting competition prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (affirmative)

Article 19(1) of the Monopoly Regulation and Fair Trade Act prohibits “agreement on an act of unfairly restricting competition”. The agreement includes not only explicit agreement but also implied agreement. Here, the essence of the agreement lies in the communication between two or more enterprisers. As such, it cannot be deemed that there was an agreement as a matter of course on the ground that there exists a appearance consistent with the act listed in each subparagraph of the above provision. However, it can be deemed that there was an agreement between the enterprisers, in the event that there is a proof of a circumstance to acknowledge a reciprocality of communication between the enterprisers.

Therefore, it can be recognized that there exists an agreement on an act of unfairly restricting competition in a case where a company with high market share in the over-market market has determined its price first based on its independent decision, and the other competitors are confiscing the price, and the business operators are aware of all these circumstances as the practice of price determination has accumulated for a considerable period of time, if communication related to price determination is proven or if communication with intent can be ratified in light of various additional circumstances.

Article 19(1) of the Monopoly Regulation and Fair Trade Act

Supreme Court Decision 2012Du17421 Decided November 28, 2013 (Gong2014Sang, 1212) Supreme Court Decision 2012Du13665 Decided May 16, 2014

ZEex Co., Ltd. (Law Firm LLC et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Jipyeong, Attorneys Park Young-ju et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2010Nu32084 decided January 11, 2012

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the establishment of unfair collaborative act

A. Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) prohibits “agreement on an act of unfairly restricting competition,” and such agreement includes not only explicit agreement but also implied agreement. Here, the essence of an agreement lies in the communication between two or more business entities. As such, it cannot be deemed that there was an agreement as a matter of course on the ground that there exists an external form consistent with the act listed in each subparagraph of the above provision exists, but it can be deemed that there was an agreement where a circumstance to recognize a reciprocality of communication among business entities exists (see Supreme Court Decision 2012Du17421, Nov. 28, 2013).

Therefore, after the company with a high market share in the over-market market has first determined its price based on its independent judgment, other competitors are conjecting its price, and business operators are aware of all these circumstances as the practice of price determination has accumulated for a considerable period of time, if the communication related to price determination can be proven or confirmed in light of various additional circumstances, it can be recognized that there exists an agreement on an act of unfairly restricting competition.

B. (1) The lower court: (1) recognized that the Plaintiff’s 2G sales price and its 2G sales price were identical or similar to that of the Plaintiff’s 3G sales company (hereinafter “E1”); (2) determined that the Plaintiff’s 2G sales price and its 2G sales price were 0G sales price and sold to the Plaintiff, including the Plaintiff, at least 2G sales price and the 3G sales price, based on the fact that the 2G sales price were 0G sales price and the 3G sales price were 5G sales price, and that the Plaintiff’s 2G sales price and the 3G sales price were 0G sales price were 6G sales price, and that the 3G sales price were 0G sales price and the 2G sales price were 5G sales price were 10 or less, and that the 2G sales price were 5G sales price and the 3G sales price were 9G sales price that the Plaintiff had agreed on the 2G sales price and the 2G sales price were 3G sales price.

C. According to the above facts of the court below's finding, (1) it appears that the enterpriser's continuous prior notification of its own selling price to competitors is different from the case where the enterpriser unilaterally determined the price and published it through a specific sale process, based on the information obtained by other enterprisers, and (2) it is difficult to find out the fact that the large number of enterprisers almost coincide with the LPG selling price in spite of changes in the quantity of surplus by season for a long period of five to six years, and that the Plaintiff separately sold the surplus quantity generated by seasonal rain during the period of the above collaborative act, etc. at a price lower than the general charging price, and (3) under the circumstance that the two companies are notified of the charging selling price every month, even if each business operator did not directly discuss the selling price at each of the above groups continuously and non-regularly open each of the above groups, the effect of the agreement can be sufficiently achieved only by discussing the stabilization of the LPG market, self-competitive competition and high-priced maintenance.

In addition, examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court’s determination that there was an implied agreement to determine the Plaintiff’s selling price of charging stations at or almost similar to the pre-determined price of charging stations between the Plaintiff and imported two companies is based on the aforementioned legal doctrine. In so doing, contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending or omitting the legal doctrine on mutual respect in the market, establishment of unfair collaborative act, object of collaborative act, competition limitation, presumption and destruction of agreed fact, presumption and proof of the burden of proof, or by failing to exhaust all necessary deliberations, contrary to logical and empirical rules, by exceeding the bounds of the principle of free evaluation of evidence, or by failing to exhaust all necessary deliberations.

2. As to the time of unfair collaborative act

The court below rejected the plaintiff's assertion that since the time of the collaborative act in this case itself is unclear and it is difficult to calculate the relevant amount of sales, the amount of penalty surcharge not exceeding 2 billion won should be imposed, the court below rejected the plaintiff's assertion on the ground that the plaintiff made an agreement and implementation on the collaborative act in this case from January 1, 2003 to January 1, 20

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 timing of collaborative acts, or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

3. As to the relevant sales amount

For the reasons indicated in its reasoning, the lower court determined that the LPG purchased by the Plaintiff from E1 and sold to the filling station cannot be excluded from the relevant goods because it is the direct object of the instant collaborative act.

Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower judgment did not err by misapprehending the legal doctrine regarding the scope of relevant sales revenue or by omitting judgment, contrary to what is alleged in the grounds of appeal.

4. As to the deviation and abuse of discretionary power in the calculation of penalty surcharges

The lower court: (1) (A) has discretion on the Defendant regarding the selection of a certain rate within the scope of the basic penalty surcharge imposition rate; (2) it is reasonable to determine that the Plaintiff’s voluntary correction of a voluntary correction would make the difference in the imposition rate of the basic penalty surcharge itself; and (3) the Plaintiff’s selection of the “low” out of the basic penalty surcharge imposition rate due to the amendment of the statutes, taking into account the increase in the base imposition rate due to the increase in the penalty surcharge due to the amendment of the statutes, etc. for other enterprisers; (4) If the Plaintiff selects a rate other than the upper limit of the basic penalty surcharge rate under the statutes prior to the amendment, taking into account only the circumstances in which the lower limit was applied, deeming that the difference in the imposition rate narrow in the above consideration was unreasonable; and (b) based on these circumstances, it cannot be deemed that the Defendant’s selection of the Plaintiff’s voluntary reduction of the imposition rate of the basic penalty surcharge in light of the following principles: (a) it did not constitute a violation of the Plaintiff’s principle of equality and the Plaintiff’s selection of the basic statutory penalty surcharge.

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 deviation, abuse, and principle of equality and non-discrimination, contrary to what is alleged in the grounds of appeal.

5. 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 Shin Young-chul (Presiding Justice)