The method of determining whether competitors have reached an agreement on pricing in the market and whether a business entity has participated in such agreement.

In the over-market market, if a competitor determines the price, another business entity is prepared to cope with it in an appropriate way. At this time, if a business entity is deemed to be in accordance with his/her own interest, it may independently practice the price of a competitor without explicit or implicit understanding. Thus, even if the price of a competitor product in the over-market market continues to coincide for a considerable period of time with the appearance where the price of the competitor product is identical or similar to that of the competitor, and even if the business entity is fully aware of such circumstances, it cannot be recognized that there has been an agreement on price determination unless there is additional circumstance to prove that there is an explicit or implied communication between the business entity. Furthermore, even if there is an agreement on price determination among the business entities, the circumstance that a business entity is deemed to have participated in such agreement is limited, while it is difficult for the business entity to deem that there was an intention between the business entity and the business entity, such as where the business entity continues to act independently in order to maximize his/her own interest in accordance with the market conditions, or where it is difficult to deem that the business entity had engaged in contact.

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

Moo Bank Co., Ltd. (Attorneys Lee Jae-de et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Byung-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2010Nu15058 decided August 18, 2011

The judgment below is reversed and the case is remanded to Seoul High Court.

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

1. “Unfair collaborative act” prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) is “agreement on an act of unfairly restricting competition” and “agreement” includes not only explicit agreement but also implied agreement. However, such agreement is based on the essence that two or more enterprisers communicate with intent. As such, it cannot be deemed that there exists an external appearance consistent with the existence of “unfair collaborative act” listed in each subparagraph of the above provision, and there should be proof of circumstances to recognize the reciprocity of communication among enterprisers (see, e.g., Supreme Court Decision 2012Du17421, Nov. 28, 2013).

In the over-market market, if a competitor determines the price, another business entity will cope with it in an appropriate way. At this time, if a business entity is deemed to be in accordance with his/her own interest, it may independently practice the price of a competitor without the explicit or implicit understanding. Thus, even if the price of a competitor product in the over-market market continues to coincide for a considerable period of time with the appearance where the price of the competitor product is identical or similar to that of the competitor, and even if the business entity is fully aware of such circumstances, it cannot be recognized that there has been an agreement on the price-fixing unless any additional circumstance exists to prove that there is an explicit or implied communication between the business entity in relation to the price-fixing. Furthermore, even if there is an agreement on the price-fixing among the business entities, the circumstance to deem that a business entity participated in such agreement is limited. On the other hand, if it is difficult to deem that the business entity had an intention to contact with the business entity for a considerable period of time, such as where the business entity independently acted in order to maximize its own interest in accordance with the market conditions, or that business entity had engaged in collusion.

2. The court below affirmed the following facts and circumstances that can be recognized by evidence, i.e., liquefied petroleum gas business operators (hereinafter “LG”)’s sales in the instant case’s LPG sales, and determined that there was an agreement between the Plaintiff’s officers and employees on the remaining sales price of the 6GG sales in order to verify the actual sales price of the 6GG sales from the 199 import company, and that there was a difference between the Plaintiff’s sales price and the 6G sales price, and that there was a difference between the Plaintiff’s sales price and the 6G sales price, and that there was a difference between the Plaintiff’s sales price and the 6G sales price, and that there was a difference between the Plaintiff’s actual sales price and the 6G sales price, and that there was a difference between the Plaintiff’s actual sales price and the 6G sales price, and that there was a difference between the Plaintiff’s actual sales price and the 2G sales price of the 10GG sales price.

3. However, it is difficult to accept such fact-finding and determination by the court below for the following reasons.

A. Review of the reasoning of the lower judgment and the evidence duly admitted by the lower court reveals the following circumstances.

(1) If an entrepreneur, as a store market, appears to be in line with his/her own interest to imitate the price of a competitor, the LPG market may independently implement it without any agreement. Therefore, it is difficult to recognize the existence of an agreement on price determination or the fact that he/she participated in such agreement solely on the sole basis that the LPG sales price was almost the same.

(2) Although LPG importers notified the Plaintiff of the selling price during the trading period, there is no material to be deemed that it was made by agreement with the Plaintiff, and among the importers, the fact that SPG importers notified their selling price to the Plaintiff and expressed the Plaintiff to the addressee’s column is a unilateral act of the SPgas. Thus, it cannot be deemed that there was a mutual communication between the Plaintiff and another LPG business operator regarding the determination of prices on the ground of such circumstance.

(3) It is difficult to readily conclude that the Plaintiff’s officer or team leader-grade employee’s attendance at a meeting is related to the instant agreement, merely twice during the instant agreement period asserted by the Defendant.

(4) Of the statement of static employees, the opinion that the Plaintiff and E1 did not have a close cooperative relationship with the Plaintiff on the sole basis that “SK Gas was aware of the fact that the Plaintiff had induced the transaction with the pot trading business entity that the Plaintiff traded in the existing area,” and that the Plaintiff and E1 had a close cooperative relationship with the Plaintiff, and that “LPG price difference may become a detonating fuses for the promotion of market competition” that the Plaintiff received from the Plaintiff’s employees while preparing measures to prepare for the preparation of the preparation for the preparation for the preparation for the price increase by the employees belonging to E1, cannot be deemed grounds to deem that there was an agreement between the Plaintiff and other LPG business entities.

(5) The agreement in this case claimed by the Defendant was derived from the difference in the sales price inside and outside 10 won between the importers. The Plaintiff sold 20% of its quantity at a price below 60 won per km continuously than the sales price of the charging station, and accordingly, had the risk of causing price confusion contrary to the agreement in this case, the Plaintiff’s act has been continuously maintained. The importing company did not purchase the Plaintiff’s surplus quantity despite the fact that the importing company displayed a strategy to purchase the surplus quantity of the oil refining for the prevention of the pot trading. However, there is only a little difference in the Plaintiff’s sales volume of the same oil refining.

(6) Meanwhile, the Plaintiff had the lowest share in the LPG market, and continued to decline since 2003, while purchasing the LPG from the importing company, the price of the importing company has been lowered continuously.

B. Examining these circumstances in light of the legal principles as seen earlier, although the Defendant’s assertion that the sales price of the filling station by LPG business operators was almost the same during the instant agreement period, importer was almost the same, and the Plaintiff was notified to the Plaintiff and other LPG business operators, and there were circumstances where the Plaintiff and other LPG business operators were at a staff meeting, etc. or contact with their employees, the circumstances for ratification of the communication with the intent to make a pricing agreement between the Plaintiff and the Plaintiff and other business operators are limited, while the circumstances for ratification of the communication with the intent to maximize their own interests are limited, the Plaintiff continued for a considerable period of time to be deemed to have committed an act that would normally be incompatible with those of other business operators in collusion with the other business operators with the intent to maximize their interests. Therefore, it is difficult to deem that the Plaintiff was involved in the instant agreement by communicating with the other

C. Nevertheless, the lower court determined that the Plaintiff, solely based on its stated reasoning, could have impliedly agreed with other enterprisers regarding the determination of LPG price during the agreement period, or have participated in such agreement. In so doing, the lower court erred by misapprehending the legal doctrine on the establishment of an “unfair collaborative act” under the Fair Trade Act, thereby failing to exhaust all necessary deliberations, or by exceeding the bounds of the principle of free evaluation of evidence by violating logical and empirical rules. The allegation in the grounds of appeal assigning this error

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)