2016Do9287 Violation of Monopoly Regulation and Fair Trade Act

Defendant corporation

Defendant and Prosecutor

Law Firm Barun (LLC)

Attorney traditional Jae-in

Seoul Central District Court Decision 2016No843 Decided June 3, 2016

February 27, 2020

All appeals are dismissed.

The grounds of appeal are examined.

1. Judgment on the grounds of appeal by the prosecutor

A. Relevant legal regulations and issues

Article 23(1) of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Fair Trade Act") provides that a business entity shall not engage in, or cause its affiliated company or any other business entity to engage in, any act that falls under any of the following subparagraphs and that is likely to impede fair trade (hereinafter referred to as "unfair trade practices"). Article 23(1) of the same Act provides that a business entity shall not engage in, or cause its affiliated company or any other business entity to engage in, a transaction with the other party by unfairly taking advantage of its trading position (hereinafter referred to as "act of abuse of trading position"). Article 67 of the same Act provides that a person who falls under any of the following subparagraphs shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 150 million won. Article 23(2) of the same Act provides that a person subject to punishment shall be punished as a person who has committed an unfair trade practice in violation of the provisions of Article 23(1)(7).

As above, Article 23(1) which is a prohibited provision shall not engage in, or cause an affiliated company or any other business entity to engage in, an unfair trade practice. On the other hand, Article 67 Subparag. 2 (hereinafter “instant penal provision”) which is a penal provision is stipulated as “a person who engaged in an unfair trade practice” in violation of Article 23(1).

The key issue of this case is whether the instant penal provision punishs only a person who directly engaged in an act of abuse of trade position, which is an unfair trade practice, or a person who causes affiliated companies or other business entities to do so.

B. The scope of the person who committed an unfair trade practice under the instant penal provision is included in “a person who committed an unfair trade practice.”

On December 31, 1980, when the Fair Trade Act was enacted by Act No. 3320 on December 31, 1980, Article 15 of the same Act provides that "an enterpriser shall not engage in any of the following unfair trade practices." Article 15 of the same Act provides that "an act of abuse of trade position" shall be prohibited, and Article 56 subparagraph 2 of the same Act provides that "an act of abuse of trade position shall be punished by a fine not exceeding 50 million won" shall be punished by a person who has committed an unfair trade practice in violation of Article 15. Since the amendment was made by Act No. 3875 on December 31, 1986, Article 15 of the same Act prohibits an affiliated company or other enterprisers from engaging in such unfair trade practice, as the latter part of Article 23 (1) of the current Monopoly Regulation and Fair Trade Act prohibits an affiliated company or other enterprisers from engaging in such unfair trade practice in violation of Article 15 of the same Act."

In the process of revising the Fair Trade Act several times, the above regulation system has been maintained as it is, and it has reached the present.

On the other hand, with the amendment by Act No. 4513 on December 8, 1992, the Fair Trade Act newly established a provision that imposes penalty surcharges on violations of the prohibition provisions of unfair trade under Article 24-2(1). Similar to the above penal provisions, “In the event of unfair trade in violation of the provisions of Article 23(1), the relevant business entity was determined as subject to penalty surcharges. After that amendment, as amended by Act No. 7315 on December 31, 2004, “if there is unfair trade in violation of the provisions of Article 23(1)” under Article 24-2(1) of the Fair Trade Act, the phrase “if there is unfair trade in violation of the provisions of the former provision, the phrase “if there is any unfair trade in violation of the provisions” was deleted from the limited meaning “if there is any unfair trade in violation,

The amendment of Article 24-2(1) is to clearly state the legislative purport of Article 23(1) that a person may be subject to penalty surcharges even in cases where the person himself/herself, in accordance with the latter part of Article 23(1), causes another person to engage in such unfair trade practice, even if he/she causes another person or an affiliated company to engage in such unfair trade practice.

Article 23(1) and Article 67 subparag. 2 of the Fair Trade Act, and Article 67 subparag. 2 of the same Act, and Article 67 subparag. 2 of the same Act, in principle, shall be strictly interpreted and applied in accordance with the language and text of the relevant provision, and Article 67 subparag. 2 of the same Act, which is the penal provisions for the violation of Article 23(1) of the Fair Trade Act, shall be punished only by natural persons who committed a violation on behalf of a business entity, and a corporate business entity shall be punished only by such natural persons who meet separate requirements as prescribed in Article 70, as in the instant case, and the interpretation or application of the above provisions is distinguishable from those of a person subject to punishment or applicable requirements, and there is no need for the interpretation or application of the said provisions to coincide with each other.

In a case where an enterpriser has committed an act of abuse of trading status directly against the other party, "an affiliated company or another business operator" is in violation of the prohibition provisions of Article 23 (1) 4 of the Fair Trade Act, and thus, it shall not be subject to criminal punishment under Article 67 (2) of the Fair Trade Act such as imposition of penalty surcharges.

C. Appropriateness of the judgment of the court below

The lower court determined that the part of the charge that the Defendant had an affiliated company engage in an abuse of trade position, which is a kind of unfair trade practice, does not constitute a subject of punishment under Article 67 subparag. 2 of the Fair Trade Act. Such determination by the lower court is justifiable in light of the legal doctrine as seen earlier, and the lower court did not err by misapprehending the legal doctrine on the interpretation of the above provision, contrary to what is alleged in the grounds of appeal (the allegation in the grounds of appeal disputing the first instance judgment on a different premise does not affect the conclusion

2. Judgment on the Defendant’s grounds of appeal

Examining the reasoning of the lower judgment in light of the evidence duly admitted, 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 subject of the Fair Trade Act, and the requirements for establishing an act of abuse of trade position, as alleged in the grounds of appeal.

3. Conclusion

The appeal by the prosecutor and the defendant is dismissed in entirety as it is without merit. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won

Justices Jo Hee-de

Justices Kim Jae-hyung

Justices Min You-sook