2013du7674 Demanding revocation of a penalty surcharge order

Co., Ltd.

Fair Trade Commission

Seoul High Court Decision 2011Nu33572 Decided March 20, 2013

June 10, 2016

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

The grounds of appeal are examined.

1. The court below determined that the plaintiff made a statement on the first date for pleading of government procurement and made a judicial confession as well as that the above agreed fact in accordance with the evidence as stated in its holding, after clearly expressing that the plaintiff agreed on the quantity and supply price of the government procurement so-called "the first date for pleading" in collaboration with other manufacturers and sellers of the Lolus (hereinafter referred to as "the so-called "the so-called "the so-called "the so-called") from 2005 to 2007 in the cause of the claim of the complaint of this case. The court below found that the plaintiff committed the collaborative act of this case by the above agreement according to the confession and the facts of recognition.

2. However, we cannot agree with the judgment of the court below for the following reasons.

A. The confessions under Article 288 of the Civil Procedure Act, which is applicable mutatis mutandis pursuant to Article 8(2) of the Administrative Litigation Act, are limited to statements about facts, and statements that recognize legal relationship or legal effect which is the premise of a subject matter of a lawsuit are so-called so-called right confessions that parties may freely withdraw without binding the court (see, e.g., Supreme Court Decision 2010Da6024, Jun. 10, 2010).

According to the records, in 2005, 2006, and 2007, the plaintiff's attorney stated on the first date for pleading a complaint stating that "the plaintiff's attorney had a separate collaborative act as an agreement on the quantity allocation or price of the government's subscription bags" on the first date for pleading, but there was no unfair collaborative act that the plaintiff did not agree in advance on the quantity and supply price of the so-called "the so-called "the so-called "the so-called "the so-called "the so-called Domination" ordered

Examining these circumstances and the contents of the Plaintiff’s assertion in light of the legal principles as seen earlier, it cannot be deemed that the Plaintiff’s statement constitutes a confession of so-called right as to whether a series of acts conducted by the manufacturers of so-called so-called so-called “agreement on an act unfairly restricting competition,” which is prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”), including the Plaintiff, in 2005 to 2007.

Nevertheless, the lower court deemed that the Plaintiff’s above statement was made a confession in court, so it erred by misapprehending the legal doctrine on the confession in court.

B. Furthermore, the court below determined, based on the evidence stated in its holding, that the Plaintiff agreed on the quantity and supply price of the government procurement prior to the date of 2005 to 2007 with other manufacturer of the so-called "the so-called "the so-called "the so-called "unfair collaborative act" prohibited by Article 19 (1) of the Fair Trade Act is an agreement on the act of unfairly restricting competition, and it also includes not only the explicitly agreed act but also the implied agreement. However, the essence of the agreement is to communicate with the two or more enterprisers. Thus, the above provision is just because there is a contact with the intentions of two or more enterprisers.

The existence of appearance consistent with the acts listed in each subparagraph cannot be deemed to have been agreed upon as a matter of course, and there must be proof of circumstances to recognize the reciprocity of communication between the business operators, and the burden of proof of such agreement is against the Defendant ordering corrective measures, etc. on the ground of such agreement (see, e.g., Supreme Court Decision 2012Du17421, Nov. 28, 2013).

2) Review of the reasoning of the lower judgment and the record reveals the following facts.

A) From 2005 to 2009, the Defendant entered into an agreement with the Director General of the Korea Centers for Disease Control and Prevention to jointly determine the supply price and the supply quantity for each investigation purchased each year by the Korea Centers for Disease Control and Prevention, and accordingly, ordered the Plaintiff to pay penalty surcharges on the ground that the Defendant committed an unfair collaborative act by entering into a government procurement contract. Among them, the Defendant’s order to pay penalty surcharges against the Plaintiff from 2005 to 2007 is the instant disposition in the holding of the lower judgment.

B) The government procurement bid method was changed to a free contract in 2005 and 2006, and in 2007, to a competitive bid method. The situation of the government procurement market and the private demand market that constitutes the solo market per year was changed, and there was a difference in inducing manufacturers to enter into an agreement on the price and quantity due to changes in demand and supply volume.

C) Since the government procurement demand in 2005 and 2006 was anticipated to exceed the expected amount of supply, it is difficult to deem that the government procurement contract amount was more favorable than the private demand market, even if the government procurement market, such as the cost of production of the so-called so-called so-called so-called “self-sufficiency” and the convenience of transactions in mass transactions, has been more favorable than the private demand market. However, it is difficult to deem that the manufacturer was actively engaged in a high competition to actively participate in the government procurement market, or that there was an incentive to agree on the quantity of supply or contract amount jointly with competitors to avoid such competition.

D) The supply volume and contract amount of the so-called “self-retention procurement contract” in 2005 and 2006 was determined by the manufacturers through an individual consultation with the Korea Centers for Disease Control and Prevention and the Public Procurement Service. In particular, the supply volume was consulted on the basis of information, such as the supply volume of the government that had already been offered to the Korea Centers for Disease Control and Prevention through a group of meetings held prior to the price consultation, and there is no other circumstance to deem that there was a need for a manufacturer to have agreed to allocate the supply volume through a separate group prior to individual consultation with the Korea Centers for Disease Control and Prevention and Public Procurement Service

E) In 2007, since the minimum amount of a contract has been determined by the method of "the desired quantity competitive bidding," each manufacturer has the incentive to reach an agreement to secure the successful bid price and to avoid low-price competition, and some of the manufacturers also recognize that the amount of a free contract executed in the previous year exceeds the demand amount. In addition, even though the negotiated contract was changed to the designated competitive bidding on September 4, 2007 and subsequent bidding was conducted, it is difficult to see that the final contract quantity is almost consistent with the contents of the quantity distribution consultation among the manufacturers, and the bid price was very close, and there was a mutual consensus in advance, on the premise of a free contract.

3) Examining the reasoning of the lower judgment in light of the aforementioned legal principles and factual relations, the lower court was justifiable to have determined that there was an unfair collaborative act in 2007. However, it is difficult to deem that an agreement was reached between manufacturers, including the Plaintiff, to allocate the quantity of supply and to jointly determine the contract amount with respect to the so-called reader government procurement in 2005 and 2006, which was concluded by a negotiated contract.

Nevertheless, solely based on the facts stated in its reasoning, the lower court determined that there was an unfair collaborative act as in 2005 and 2006, as in 2007. In so determining, the lower court erred by misapprehending the legal doctrine on the establishment of an unfair collaborative act, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment.

3. We examine the scope of reversal.

If the order for the payment of a penalty surcharge, which has discretion as to whether to impose the penalty surcharge or whether to impose the penalty surcharge, has exceeded or abused the discretionary authority, the court shall abuse or deviate from the discretionary authority.

Only a determination on whether it is possible to determine whether it is appropriate within the scope of discretion, and as such, its entire revocation is inevitable, and only the part that the court recognizes as reasonable cannot be revoked (see, e.g., Supreme Court Decision 2007Du18062, Jun. 23, 2009).

As long as the agreed portion of the judgment below in 2005 and 2006 cannot be maintained as seen earlier, the payment order of penalty surcharges, which was based on the premise that the plaintiff conducted an unfair collaborative act with other manufacturers from 2005 to 2007, should be completely revoked. Thus, the judgment of the court below shall be reversed in its entirety.

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, 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 Jae-young

Note Justice Lee In-bok

Justices Kim Yong-deok

Justices Lee Dong-won