[1] Whether Article 49(4) of the Monopoly Regulation and Fair Trade Act and Article 3 of the Addenda of the Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012) (amended by Act No. 11406) violate the principle of clarity or violate the principle of statutory reservation (negative)

[2] Requirements for the first person who alone provides evidence necessary to prove an unfair collaborative act as a person who cooperates in an investigation by the Fair Trade Commission after commencing the investigation under Article 35(1)2 and 4 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act to be eligible for exemption from investigation and further reduction / The purpose and purpose of the Act on the Monopoly Regulation and Fair Trade is to establish the system of exemption from investigation and exemption from investigation.

[3] In light of the fact that the Fair Trade Commission recognizes the active and pride factors under Article 5 subparag. 1 to subparag. 4 of the former Public Notice of Operation of the System for Reduction and Exemption for Voluntary Voluntary Reporters, etc., and that there is no passive and unlawful consideration factors under subparag. 5 of the former Public Notice of Operation of the System for Reduction and Exemption for Voluntary Reporters, etc., and in case where the Fair Trade Commission decided not to grant voluntary declarations by considering the circumstances where leakage of the facts occurred as an important consideration factor under subparag. 6 as the case where it decided not to grant voluntary declarations

[1] Articles 12 and 13 of the Constitution of the Republic of Korea; Articles 49(4) and 50 of the Monopoly Regulation and Fair Trade Act; Article 3 of the Addenda ( March 21, 2012) / [2] Article 22-2(1)2 and (4) of the Monopoly Regulation and Fair Trade Act; Article 35(1)2 and 4 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act / [3] Article 22-2(1)2 and (4) of the Monopoly Regulation and Fair Trade Act; Article 35(1)1 and 2 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

[2] [3] Supreme Court Decision 2016Du45783 Decided July 26, 2018 (Gong2018Ha, 1862)

Tae Young Construction Co., Ltd. (LLC, Kim & Lee LLC, Attorneys Gangnam-il et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm spring, Attorneys Kim Min-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2016Nu31885 decided April 27, 2017

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

The grounds of appeal are examined.

1. Whether the prescription period for the first collaborative act is applicable (ground of appeal Nos. 1, 2, and 3)

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

Article 49(4) (hereinafter “instant legal provision”) of the Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012; hereinafter “Fair Trade Act”) provides that where the Fair Trade Commission initiates an investigation into a violation of this Act, five years ( Subparagraph 1) from the date the investigation commences; where the investigation is not commenced, seven years ( Subparagraph 2) have passed from the date the relevant violation was terminated, corrective measures against the violation of this Act shall not be ordered or imposed a penalty surcharge. According to Article 3 (hereinafter “instant supplementary provision”) of the Addenda (hereinafter “instant supplementary provision”), the amended provisions of Article 49(4) shall apply from the first investigation pursuant to Article 49(1) or (2) of the amended Act (amended by Act No. 11406, Jun. 22, 2012).

The lower court determined that: (a) the fact that the Defendant received the document dated October 16, 2009, which asked the Defendant whether the Korea Gas Corporation could request a collusion investigation only with the data on bid results, etc.; (b) the Defendant cannot be deemed to have commenced an investigation at that time; and (c) the Defendant could be deemed to have conducted an on-site investigation on bid collusion for various large construction works, including the first collaborative act in this case, on October 7, 2013.

In light of the relevant legal principles and records, the aforementioned determination by the lower court is justifiable. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules or by misapprehending

B. Ground of appeal No. 3

(1) Whether the legal provisions of this case and the supplementary provisions of this case violate the principle of clarity, etc.

Considering the language and content of Articles 49 and 50 of the Fair Trade Act, including the instant legal provisions, and the legislative intent of the instant legal provisions, the term “the date of commencement of the investigation” under subparagraph 1 of the instant legal provisions and “the time when it can objectively be confirmed that the investigation was commenced” may be interpreted as “the time when the investigation was commenced.” In individual cases, when the term “the time when it can objectively be confirmed that the investigation was commenced” can be specified through a supplementary value judgment of a judge. Therefore, it is difficult to view that the meaning of the instant legal provisions and supplementary provisions is unclear or that the institution interpreting and executing the law is likely to arbitrarily interpret or enforce such meaning in individual cases, and thus, it cannot be deemed that each of the instant provisions violates the principle of clarity, or that the instant legal provisions violate the principle of statutory reservation.

The lower court’s determination to the same effect is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the clarity principle.

(2) Whether the supplementary provision of this case violates the principle of equality

The lower court determined that the application of the statute of limitations varies depending on the time when the Fair Trade Commission commences an investigation pursuant to the supplementary provision of this case, but it is difficult to regard the case as arbitrary discrimination in light of the nature of the system of the statute of limitation for disposition where the investigation already commenced prior to the enforcement of the Act was delayed and the investigation was conducted differently from the case that had

Examining the relevant legal principles and records, the above determination by the lower court is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the principle of equality.

2. Whether the instant penalty surcharge payment order is unlawful (Ground of appeal No. 4)

The court below determined that the Defendant’s calculation of the sales amount related to the collaborative act of this case, which is a bid collusion, included the contract amount of construction sections and the total sales amount of joint supply and demand companies participating in the Plaintiff’s bidding, is legitimate, and that the Defendant’s deviation and abuse of discretion can not be recognized on the ground that the business entity participating in the bidding for public order projects determined the successful bidder for each construction section in advance and the large-scale bid collusion, which is a large-scale bid collusion, is obvious.

Examining the relevant statutes, legal principles, and records, such determination by the lower court is justifiable. In so doing, the lower court did not err by misapprehending the legal doctrine on the calculation of relevant sales revenue, deviation from and abuse of discretionary power, or by failing

3. Whether a measure dismissing an application for additional reduction or exemption is unlawful (ground of appeal No. 5)

A. Article 22-2(1)2 of the Fair Trade Act provides that a penalty surcharge may be mitigated or exempted for a person who cooperates in an investigation by means of providing evidence, etc. (Article 22-2(4)). According to delegation, the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hereinafter “Enforcement Decree of the Fair Trade Act”) provides that a person who cooperates in an investigation after the commencement of the investigation by the Fair Trade Commission shall be the first person who provides evidence necessary to substantiate the unfair collaborative act, and (2) a person who cooperates in an investigation before the Fair Trade Commission fails to obtain information on the unfair collaborative act or fails to obtain evidence necessary to substantiate the unfair collaborative act; and (3) a person who cooperates in an investigation by the Fair Trade Commission after the completion of the investigation, such as submission of relevant materials, shall be exempted from penalty surcharges until the completion of the investigation (Article 35(1)2 of the Act). Article 35(1)2 of the Enforcement Decree of the Fair Trade Act provides that a person who is subject to reduction or exemption from corrective measures against the unfair collaborative act may be mitigated or exempted from penalty surcharges (Article 15).

According to the language and content of the relevant statutes, “the first person who voluntarily provided evidence necessary to prove that an investigation is an unfair collaborative act after the commencement of the investigation by the Fair Trade Commission” satisfies the requirements, such as “the first person who voluntarily provided evidence necessary to prove the unfair collaborative act,” which is subject to exemption and additional reduction and exemption, to “the fact related to the unfair collaborative act, including the submission of relevant materials, must faithfully cooperate until the investigation is completed

The purpose and purpose of the Fair Trade Act’s legislation is to ensure the effectiveness of sanctions against unfair collaborative acts committed by an enterpriser who has participated in such unfair collaborative acts by voluntarily reporting or cooperating with an investigation into such unfair collaborative acts, thereby weakening trust among participating enterprisers, and at the same time, by allowing the Fair Trade Commission to easily detect unfair collaborative acts and collect evidence.

B. Meanwhile, Article 5 of the former Public Notice of Operation of the System to Take Corrective Measures, etc. against Persons who have reported unfair collaborative acts (amended by the Fair Trade Commission Notice No. 2016-3, Apr. 15, 2016; hereinafter “former Public Notice of Reduction and Exemption”) provides that determination shall be made by comprehensively taking into account the following matters into account:

(1) Whether a person who has filed a voluntary report has made all statements about the pertinent collaborative act without delay (Article 1(1))

(2) Whether or not voluntary reporters, etc. have promptly submitted all data that they hold or are able to collect in connection with the collaborative act (No. 2)

(3) Whether the commission promptly answers and cooperates with the commission’s request necessary for factual verification (No. 3)

(4) Whether officers and employees (including former officers and employees, if possible) have fulfilled their best to cooperate with the commission in a continuous and true manner in an interview, investigation, etc. (No. 4)

(5) Whether the evidence and information related to the collaborative act were destroyed, fabricated, damaged, or concealed (No. 5)

(6) Whether an act was committed against a third party without the consent of the commission before the notice of the review report was given (No. 6)

C. The above provision of the former Public Notice of Reduction and Exemption, in light of its form and content, constitutes a discretionary rule, i.e., administrative agency’s internal rules, and setting reasonable standards necessary therefor within the extent not contrary to the law and regulations, belongs to the discretion of the administrative agency. However, Article 5 of the former Public Notice of Reduction and Exemption provides that the determination of “faith cooperation” should be made by comprehensively taking into account the following grounds: (a) whether the criteria or reasons prescribed by each subparagraph are to be considered seriously; and (b) whether the voluntary reporter or investigative partner (hereinafter referred to as “voluntary reporter”) satisfies all the affirmative and pride factors prescribed in subparagraphs 1 through 4, does not specify how to balance in cases where the passive and unlawful factors prescribed in subparagraphs 5 and 6 are recognized. Meanwhile, if the voluntary reporter divulges the fact of application to another person without the consent of the Fair Trade Commission before the issuance of the review report, it is possible for the accomplice to easily establish countermeasures against the investigation of the Fair Trade Commission; and (c) thereby, to establish and conceal the structure of the voluntary report to form and maintain relevant evidence.

In addition to these circumstances, even if some of the circumstances that can be seen as a violation of the duty to cooperate in good faith are recognized, a certain discretion is recognized to the Fair Trade Commission in relation to whether to deny the status of the voluntary reporter by recognizing a violation of the duty to cooperate in good faith, the final recognition of the status of the voluntary reporter is bound to be made in accordance with the judgment on the series of investigation and cooperation processes ultimately, and considering the need to prevent abuse of the system, etc., the Fair Trade Commission shall consider the fact that the voluntary reporter is recognized as the affirmative and positive factors under Article 5 subparag. 1 through 4 of the former Public Notice of Reduction and Exemption and the fact that there are no passive and unlawful factors under subparag. 5, while considering the fact that there is a leakage of the fact prescribed by subparag. 6, the Fair Trade Commission may recognize the violation of the duty to cooperate in good faith by deeming the voluntary reporter as an important factor. If the evaluation is not a lack of rationality, a violation of the principle of proportionality and equality, or a misunderstanding of the fact that constitutes the premise for the evaluation, it shall not be deemed unlawful.

D. Review of the reasoning of the lower judgment and the evidence duly admitted and examined by the lower court reveals the following facts.

(1) The Plaintiff, separate from the instant collaborative act, participated in the bidding collusion (hereinafter “the instant other collaborative act”) of “construction works to enhance the embankment of agricultural reservoirs (three tools)” (hereinafter “the instant other collaborative act”).

(2) During the investigation into the instant collaborative act, an investigation into the instant other collaborative act was initiated. On October 31, 2014, the Plaintiff first filed an application for reduction of and exemption from the instant other collaborative act, and submitted the Plaintiff’s statement of Nonparty 1’s executive officer Nonparty 1 and Nonparty 2’s statement.

(3) The head of Nonparty 2, who is an employee of the Plaintiff, directly carried out other collaborative acts of this case with Nonparty 3 head of the Hanan Construction. However, on December 9, 2014, before the Defendant’s review report is notified to the Plaintiff, Nonparty 3, who notified the Plaintiff of the application for reduction of and exemption from the other collaborative acts of this case, the Plaintiff’s executive officer Nonparty 1’s executive secretary and his written statement.

(4) On March 5, 2015, the Secretary General of the Defendant notified the Plaintiff that the confirmation of the status may be revoked if he/she fails to comply with the conditions, such as “the failure to divulge the fact of the act and the fact of application for reduction or exemption to a third party before the notice of the examination report is given,” in confirming the status as the investigator of the first investigation. However, the Plaintiff did not notify the Defendant of the divulgence prior to the notification.

(5) On March 17, 2015, the Defendant notified the Plaintiff of a written report on the accusation against the Plaintiff, corrective measures, and penalty surcharge exemption, on the ground that the Plaintiff satisfied all the requirements of the first-class investigator in investigation. On March 27, 2015, the Plaintiff filed an application for additional reduction or exemption on the instant collaborative act.

(6) Before notification of the review report on May 1, 2015, the Defendant dismissed the Plaintiff’s application for reduction and exemption and dismissed the said application on July 20, 2015.

E. Examining these circumstances in light of the legal principles as seen earlier, the following determination is possible.

In addition, Nonparty 2’s employees Nonparty 2, as well as revealed the fact that he applied for reduction or exemption immediately after the application for reduction or exemption was filed, made it possible for the applicant to respond to the investigation by the Defendant. Moreover, it is difficult to deem that Nonparty 2’s employees Nonparty 2’s above act was not responsible for the Plaintiff’s direction and supervision, or that there is any justifiable reason that the Plaintiff could not be held responsible for the Plaintiff. Furthermore, considering the fact that the Defendant did not inform the Defendant of the fact that he did not faithfully cooperate with the Plaintiff, considering the time of divulgence of the Plaintiff’s application for reduction or exemption, leakage counterpart, leakage circumstance, and the Defendant’s notification, it is difficult to deem that the Defendant’s dismissal of the application for additional reduction or exemption, or that there was a violation of the principle of proportionality and equality, etc. In addition, inasmuch as the Defendant’s application for reduction or exemption is recognized as the affirmative reason under subparagraphs 1 through 4 of Article 5-1 of the former Public Notice, and there is no reason to deem the Defendant as a person who has faithfully cooperateed with the reporter.

F. Therefore, while the lower court’s reasoning was somewhat inappropriate, the lower court’s determination that the dismissal of an application for additional reduction or exemption did not err by exceeding the bounds of the principle of free evaluation of evidence inconsistent with logical and empirical rules, or by misapprehending the legal doctrine on the requirements for recognition of the first-class investigative partner, the violation of the duty of good faith, and the deviation and abuse of discretion, etc.

4. 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.

Justices Min You-sook (Presiding Justice)