[1] Requirements to deem that part and all of the enterprisers participating in an agreement on price determination, etc. under Article 19(1)1 of the Monopoly Regulation and Fair Trade Act has terminated unfair collaborative acts

[2] Whether an implied agreement is included in the “agreement on an act of unfairly restricting competition” prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (affirmative)

[1] Article 19 (1) 1 of the Monopoly Regulation and Fair Trade Act / [2] Article 19 (1) of the Monopoly Regulation and Fair Trade Act

[1] Supreme Court Decision 2015Du37433 Decided November 23, 2017 / [2] Supreme Court Decision 2001Du1239 Decided February 28, 2003 (Gong2003Sang, 928), Supreme Court Decision 2012Du17421 Decided November 28, 2013, Supreme Court Decision 2016Du31098 Decided December 29, 2016

Shepher Korea Limited Company (Law Firm LLC, Attorneys Park Sung-hoon 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 2015Nu39257 decided June 17, 2016

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

The grounds of appeal are examined.

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

A. In the event that an agreement, such as a price determination, etc., as prescribed by Article 19(1)1 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) and an implementation thereof was conducted, the date on which the unfair collaborative act is terminated” is the date on which the act of implementation based on the agreement is terminated. Therefore, in order to terminate an unfair collaborative act, an enterpriser who participated in the agreement must express or implied declaration of intent to withdraw from the agreement with another enterpriser and reduce the price level that would have existed without the collusion according to his/her independent judgment. In addition, in order to deem that an unfair collaborative act was terminated with respect to all the enterprisers who participated in the agreement, there should be circumstances to deem that each enterpriser who participated in the agreement clearly reverses the agreement and reduces the price level that would have existed without the collusion, or that each enterpriser who participated in the agreement actually reversed the collusion through the repetitive price competition, etc. between the enterprisers (see, e.g., Supreme Court Decision 2017Du3435, Nov. 23, 2017).

B. Review of the reasoning of the lower judgment and the evidence duly admitted reveals the following circumstances.

(1) The Plaintiff is the subsidiary company of the Shepler group, which is the manufacturer of German bescling, and the Korea UNSK Co., Ltd. (hereinafter referred to as “stock company” in the name of each company) is the subsidiary company of Japanese Government, which is the manufacturer of Japanese bescling, and they are importing bescling for the trial from their headquarters in Korea and directly producing and supplying them to the demand source. The Chinese government imported bescling for the trial from the United Nations, which is the manufacturer of bescling in Japan, and sells bescling for the demand source. The Plaintiff, Korea United Nations KK, and Korea (hereinafter referred to as “three companies such as the Plaintiff, etc.”) are three market share higher in the domestic bescing market in the domestic market for bescing market, and the Plaintiff is the first, second, second, second, and Chinese export rate in Japan, while the Japanese government, Japan's price in Japan, and third, subsequent to the increase rate of increase in the domestic market from 99.

(2) Three companies, including the Plaintiff, have entered into an express or implied agreement with their executives and employees on the joint maintenance or increase of the price of the marketing beer products through contact with the exchange of information and communication among their executives and employees from around 1998 (including 1999) and communication with them (hereinafter “the first collaborative act of this case”). Specifically, the Plaintiff and the Korea E.S. case newly prepared GPL for beering for marketing at around 2002 (Gen Service L list and consumer price list of beering for marketing) and increased the price by the method of revising it in 204 and 2005.

(3) All three companies, including the Plaintiff, etc., are more imported in a foreign country than manufacturing beering in Korea. The Plaintiff imports beering on the basis of US US US dollars as German companies, and thus, it is considerably affected by the US US US US US US US dollars. On the other hand, the US US US US US dollars and Japanese UNE cases imported beering in Japan and sold beerling in Japan, and thus are likely to be affected by the Japanese UN US US US US US US US dollars. In preparation for Korean currency, US US US US US US US dollars and foreign United Nationsization have fallen in 2006 and 2007.

(4) In order to increase the market share due to the reduction of the foreign currency rate in comparison with the Korean won currency, foreign currency reduced the market price at the market level of 5% on January 5, 2006, April 5, 2006, June 6, 2006, and the total of 16% on the market.

(5) Meanwhile, around June 2006, Vienna, who was the manufacturer of the Berling in Japan, who imported the Berling Product for the on-site marketing, went away from the collaborative act on price collusion with three Japanese companies and reduced the cost of the product by 6%.

(6) On November 2006, SPK reduced the 15% price of the so-called PE item of consultation, which refers to the standard product for bending for marketing at the market.

(7) The subsequent reduction of the price of the Vietnaming product for sale in the aggregate of 11% was made on December 5, 2006, 2007, 3% on June 3, 2007, 2007, and 11% on Nov. 3, 2007. Ultimately, the price of the foreign currency was reduced continuously from January 2006 to November 2007, and maintained the reduced price situation until the price was increased by 27% on April 15.7, 2008. Meanwhile, with respect to the Vietnaming price reduction measure taken by Nonparty 1, the Vice-President of Korea, it was requested by the team leader Nonparty 2 of Korea to refrain from reducing the price of the bending product for sale in the market, but it was continuously reduced the price of the foreign currency.

(8) An agency dealing with the Plaintiff et al. is not an agency exclusively dealing with the Plaintiff et al., but a non-exclusive agency that sells beesing for the Plaintiff et al., and the Plaintiff et al. notified the agency and the Vietnaming Federation in writing of the price increase. As such, business entities could have relatively easily known the situation of price fluctuation.

(9) It is difficult to find out the following circumstances: (a) three companies, including the Plaintiff, have taken specific measures for the continuous maintenance and implementation of the agreement; or (b) have discussed and implemented sanctions against the companies that failed to comply with the agreement.

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

In the meantime, three companies, including the Plaintiff, etc., began to reduce the price continuously from January 2006, and the Korea E.S. also reduced the price for the PE products held in consultation after November 2006, with a considerable width, and on December 22, 2006, foreign currency continuously reduced the price. As such, since three companies, including the Plaintiff, etc., continue to compete with the price for all three companies, with a considerable difference in the price for a relatively long period, it is reasonable to view that the 1st collaborative act of this case by the Plaintiff, etc., was de facto reversed through repeated price competition, etc. between the three companies, including the Plaintiff, etc., before June 22, 2007. Accordingly, it is difficult to view that the 1st collaborative act of this case, as amended by Act No. 11406, Mar. 21, 2012, had already been applied as of June 22, 2012, as amended by the former Fair Trade Act under Article 49(5) of the Act.

D. Therefore, although the part of the reasoning of the judgment below regarding the reversal of agreement and the part that deemed that the collaborative act in this case was terminated at around 2005, the court below’s conclusion that the five-year period of extinctive prescription under Article 49(4) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012) has expired is justifiable. Contrary to the allegations in the grounds of appeal, the court below did not err by misapprehending the legal principles on the termination of unfair collaborative act, etc., or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules.

2. Regarding ground of appeal No. 3

A. “Unfair collaborative act” prohibited under Article 19(1) of the Fair Trade Act includes not only explicit agreement but also implied agreement (see, e.g., Supreme Court Decision 2001Du1239, Feb. 28, 2003). However, it cannot be deemed that there was an agreement as a matter of course on the ground that there was an external appearance consistent with the “unfair collaborative act” listed in each subparagraph of the above provision, and there is proof of the circumstances to recognize the reciprocity of the agreement among the enterprisers. The burden of proof on such agreement is against the Defendant who ordered corrective measures on the ground of such agreement (see, e.g., Supreme Court Decision 201Du17421, Nov. 28, 2013).

B. Review of the reasoning of the lower judgment and the evidence duly admitted reveals the following circumstances.

(1) The three business entities, including the Plaintiff, collected and shared information on the business of other business entities, such as import price, sales price, discount price, sales performance, etc., using opportunities to visit an agency that sells business operators’ marketing marketing, including the Plaintiff.

(2) Three companies, including the Plaintiff and Korea E.S. and other marketing chain, were frequently exchanged information on sales performance, including marketing marketing, from August 21, 2005 to August 3, 2011.

(3) As of May 16, 2008 and 2009, the exchange rate of US dollars and Japan in comparison with the won currency has rapidly increased, in 2010 and 201, while the exchange rate of US dollars was stable, in comparison with the Japanese currency, the increase in the foreign currency exchange rate in Japan. The increase in the foreign currency exchange rate was 15.7% on April 15, 2008; 10.21% on October 15 of the same year; 15% on December 15 of the same year; 2019% on May 16, 2008; 29% on January 29, 2009 through 13% on the basis of the above increase; and 10% on the basis of 19% on the basis of 19% on the price increase from 200 to 19.8% on the one-6% on the other, 19% on the one-6% on the other.

(4) In comparison with the won currency in 2010, the KNE and KNE expressed that there is a need to increase the price as the rate of exchange was increased, and if the price of the KNE and KNE increase the price of the ber for the market, the Plaintiff would also increase the price in the same manner as it would increase the price. However, if the Plaintiff did not increase the price of the ber for the market, the price of the ber for the market, which was increased in the price of the ber for the market, was reduced again in 201.

(5) Around July 2011, for the reason that the continuous increase in the value of Japan's globalization requires increase in the market price in the Republic of Korea due to the increase in the value of Japan's globalization, KNSK raised the market price by 18% on October 201, and the 16% on November 201 to 17% on the market price. Meanwhile, the Plaintiff raised the 10% of the market price in March 201.

(6) The Plaintiff’s domestic marketing market share has increased from 25% to 35% between 2009 and 2011, and the Plaintiff’s domestic marketing market share increased from 35% to 40% between 2011 and 2012.

(7) In relation to the price collusion of the pro rata products on the market, the Korean employees made a voluntary report to the Defendant, and the Korean employees stated in the Defendant’s investigation that “In order to reflect the factors for the increase in the Japanese exchange rate in the price, the Korean employees requested the increase in the price to Korea, made a price increase to Korea, and sought the Plaintiff at the same time.” During the Defendant’s investigation, Nonparty 2 also stated to the effect that “The Korean employees, who requested the increase in the Korean price to Korea, made a request for the increase in the Korean price, and promoted a price increase to Korea’s Es case to the effect that he would participate in the increase in the price increase.” Meanwhile, even if the Korean employees and employees’ statements were to be made, there was no statement to the effect that the Plaintiff expressed his intent to that Article.

C. Examining these facts in light of the legal principles as seen earlier, there is room to deem that, in the case of the Republic of Korea and the Korea E.S. case, the Plaintiff agreed to jointly maintain or increase the price of the de-marketing product from 2008 to 2012 (hereinafter “instant joint act”). However, in light of the following circumstances, it is insufficient to deem that the Plaintiff participated in the instant joint act, at least, in light of the following circumstances, the Plaintiff was deemed to have participated in the said joint act.

(1) The Plaintiff’s information on the increase in the price of the Plaintiff’s marketing marketing marketing is difficult to be easily known or accurate through the Plaintiff’s prior notice on the price increase to the agency and the Vietnaming Federation. Even if an entrepreneur, including the Plaintiff, exchanged some information on sales performance, it cannot be readily concluded that there was an agreement to jointly raise the price solely on such information exchange.

(2) In the case of the Plaintiff, there is a considerable difference between the rate and time of price increase between the year 2008 and the year 2012. In particular, it is difficult to readily conclude that the price increase of the Plaintiff’s price corresponds to the external form, namely, the price increase for the marketing marketing, which was increased in 2010.

(3) Unlike Korea, the Plaintiff was affected by the US US dollars exchange rate, which is not the foreign currency exchange rate, among business entities with the market share 1 in the Republic of Korea. It is difficult to view that there was a circumstance that the Plaintiff should comply with the request for the increase of the US dollars price. On the other hand, it is reasonable to deem that the Plaintiff’s change in the price was made by an independent judgment that the Plaintiff may cope with the price competition in the transaction market according to US dollars or the foreign currency exchange rate regardless of other business entities’ actions. In addition, it is reasonable to deem that there was a considerable difference with the rest of business entities in terms of inducing the agreement on price increase, etc.

(4) Furthermore, the Plaintiff extended the market share to a considerable extent during this period.

D. The lower court erred by misapprehending that all three companies, including the Plaintiff, did not perform the instant collaborative act; however, it was difficult to recognize that the Plaintiff participated in the instant second collaborative act. In so doing, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the establishment of an unfair collaborative act.

3. 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 Park Sang-ok (Presiding Justice)