[1] The meaning of a refusal of transaction as a form of an abuse of market dominant position by a market dominant enterprise prohibited under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act

[2] The meaning of "market according to related goods" and "market according to related areas" in determining whether a specific business operator is a market dominant position, and the method of determining the possibility of market dominance in the market

[3] The method of determining whether a refusal constitutes an abuse of market dominant position by a market dominant enterprise under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act

[1] The refusal of market dominant position as an abuse of market dominant position prohibited under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act is “an act that makes it difficult for an enterpriser to conduct business activities by unfairly refusing a transaction with a specific business entity.”

[2] In order to determine whether a specific business entity is a market-dominating position, a specific business entity must specify the “market based on the related goods” which is the object of the transaction, and the “market based on the related area” which is the geographical scope of the transaction. Here, “market based on the related goods” refers to the scope of the goods under competition which a market-dominating business entity exercises control over the market. Specifically, if the price of the goods traded increases or decreases to a certain extent for a considerable period of time, representative buyers or sellers of the goods can purchase or sell them. The scope of the market should be determined by taking into account the price of the goods related to the transaction, functions and utility of the goods, purchaser’s awareness of their substitutability, and related business management decision-making forms, social and economic homogeneity and similarity, etc. In addition, it should be determined in consideration of the price-related domestic and economic characteristics of the goods at issue, price-related goods at issue as well as other domestic and foreign market-related market-related market-related market-related market-related market-related market-related market-related market-related market-related market-related market-related market-related market-related factors.

[3] [Majority Opinion] In order for a transaction refusal to constitute an abuse of market dominant position by a market dominant enterprise under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act, the refusal of the transaction refusal should be evaluated as an act that unfairly makes it difficult for other enterprises to carry out their business activities. Here, the "unfairness" should be evaluated and interpreted independently in accordance with the legislative purpose of the "promotion of competition in the market" separate from the illegality of the refusal as an unfair trade practice under Article 23 (1) 1 of the same Act. Thus, in all cases where a market dominant enterprise refuses a transaction with the intent or purpose of an unfair competition to a specific business entity who is the other party to an individual transaction, or where a certain business entity suffers disadvantage, it is insufficient to recognize the illegality of the transaction refusal merely because it is the circumstance that the refusal of the transaction refusal is likely to suffer from the difficulty of business activities or to suffer from the difficulty of business activities, and in other cases, it should be determined that there is a concern that the market dominant position might have an effect on the market dominant enterprise's economic activity.

[Dissenting Opinion by Justice Lee Hong-hoon and Justice Ahn Dai-hee] When interpreting Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act, where a market dominant enterpriser refuses a transaction with another enterpriser and thereby makes it difficult to conduct business activities, it is reasonable to interpret that the act is presumed to have committed an "unfair act" which might abuse his market dominant position and impede fair and free competition in the market. Therefore, in order for a market dominant enterpriser to escape from the above presumption, it shall be argued and proved that the refusal is not a "unfair act" which actually obstructs other enterprisers' business activities, or is not an "unfair act" which is likely to impede fair and free competition due to such intention or purpose, or that there is a justifiable reason that does not have to refuse a transaction even if it falls under such an act. Whether there is justifiable reason such as a market dominant enterpriser's refusal and refusal of transaction should be determined by comprehensively taking into account the purpose and reason for refusal of transaction, trade status and management status of the parties, necessity for business management, characteristics of refusal of transaction, market situation, and result of refusal of transaction.

[Dissenting Opinion by Justice Park Si-hwan] The meaning of the "unfairness" of a transaction refusal by a market dominant enterprise under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act is understood only as an act which is a subjective and objective act in terms of the subjective and objective aspect. Since it is contrary to the spirit of the Constitution of the Republic of Korea and the legislative purpose of the Monopoly Regulation and Fair Trade Act to regulate monopoly by regulating the abuse of the market dominant power by a market dominant enterprise, the illegality of a transaction refusal as an abuse of the market dominant position by a market dominant enterprise under Article 3-2 (1) 3 of the Monopoly Regulation and Fair Trade Act should be evaluated and interpreted as the same meaning as the illegality of a transaction refusal as an unfair trade act under Article 23 (1) 1 of the Monopoly Regulation and Fair Trade Act, and ultimately, it should be regulated regardless of whether or not there is a concern of restricting competition in terms of the "Mono."

[1] Article 2 subparag. 7, Article 3-2(1), and Article 4 of the Monopoly Regulation and Fair Trade Act; Article 5(3)3 (see current Article 5(3)4) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 17176, Mar. 27, 2001) / [2] Article 2 subparag. 7, Article 3-2(1), and Article 4 of the Monopoly Regulation and Fair Trade Act; Article 5(3)3 (see current Article 5(3)4) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 17176, Mar. 27, 2001) / [3] Article 3-2(1)3, and Article 23(1)1 of the Monopoly Regulation and Fair Trade Act

Posco Co., Ltd. (Attorney Su-gil et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Rate, Attorneys Shin Sung-sung et al., Counsel for defendant-appellant)

Hyundai Escco Co., Ltd. (Law Firm Rated and 1 other, Counsel for the plaintiff-appellant)

Seoul High Court Decision 2001Nu5370 delivered on August 27, 2002

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

The grounds of appeal are examined.

1. As to the ground of appeal on market dominant status

A. Article 3-2(1)3 of the Monopoly Regulation and Fair Trade Act (amended by Act No. 5813, Feb. 5, 1999; hereinafter “Fair Trade Act”) prohibits a market-dominating enterpriser from abusing his/her position. Article 3-2(2)3 of the same Act prohibits another enterpriser from unfairly interfering with his/her business activities as one of the abuse of position. Article 3-2(2) of the Fair Trade Act provides that the Fair Trade Act delegates the types of or standards for abuse to the Presidential Decree, the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 1621, Mar. 31, 1999; hereinafter “the Enforcement Decree of the Fair Trade Act”) provides for “an act of unfairly interfering with another enterpriser’s business activities by any means other than those prescribed in subparagraphs 1 and 2, and thus, the Fair Trade Commission’s announcement of the abuse of market-dominating position by Article 5(3)3 of the same Act (hereinafter “the Fair Trade Commission’s announcement”).

Ultimately, according to the above-mentioned provisions, a refusal of market dominant position as an abuse of market dominant position is "an act that makes it difficult for the business activities of a business entity by unfairly refusing a transaction with a specific business entity."

Meanwhile, according to Article 2 subparag. 7 and 8 of the Fair Trade Act, a market dominant enterprise shall be determined by comprehensively taking into account the market share, the existence and degree of barriers to entry into a market, the relative size of a competitor, etc. in a certain business area, where a supplier or customer of an area in which competition exists or may establish a competitive relation by subject, stage, or region of trade (hereinafter “specified business area”), and where the total market share of an enterpriser (excluding a person whose market share is less than 1 billion won) exceeds 50/100, or less than 3 business entities exceeds 75/100 of the price, quantity, quality, or other terms and conditions of trade of goods or services independently or jointly with other business entities (Article 4 of the Fair Trade Act).

Therefore, in order to determine whether a certain business entity is a market-dominating position, it is necessary to specifically determine the market based on the related goods, which are the objects of the transaction, and the market based on the geographical range of the transaction (hereinafter “relevant goods market”) and the related areas, which are the geographical range of the transaction, and to recognize the possibility of control in the market.

The market for related goods refers to the scope of goods in competition that may generally suppress the exercise of market dominant power by a market dominant enterprise. Specifically, if the price of the traded goods increases or decreases at a certain level for a considerable period of time, the representative buyer or seller of the goods can convert the purchase or sale in response thereto. The scope of the market shall be determined by comprehensively considering the price of the goods related to the transaction, the function and utility similarity, the purchaser's awareness of the substitutability and related purchase behavior, as well as the seller's awareness of the substitutability and related management decision-making form, and the homogeneity and similarity of the category of business recognized socially and economically, and the speed of technological development, the situation of other goods necessary for the production of the goods, and the market for other goods produced on the basis of the goods, and the easiness of substitution in terms of time, economic and legal aspects, etc.

In addition, the relevant regional market refers to the geographical range in which business operators in general compete with each other, and specifically, the price in all other areas means the whole area in which representative buyers or sellers in the region can convert their purchase or sale in response to the price increase or decrease for a considerable period of time, but the scope of the market shall be determined by comprehensively considering the price and characteristics of the goods related to the transaction, the quantity of production, business ability, transportation cost, purchaser's awareness of the possibility of converting the purchasing area into the purchasing area, the seller's perception of the possibility of converting the purchasing area into the purchasing area, the possible conversion into the purchasing area in time, economic and legal terms related thereto, etc. In addition, the technological development speed, the market situation of other goods necessary for the production of the goods concerned, and other goods produced on the basis of the related goods, etc. shall also be considered.

In addition, free export and import is being carried out in accordance with the trend of trade liberalization and globalization, not only the imported goods are included in the domestic products, but also the related goods can be imported in the domestic market without a big difficulty in importing them, the possibility of market control should be determined by considering the possibility of import of the related goods. Therefore, within the scope of current and future import potential, the business entities located in a foreign country are considered to be competing with each other and include them in determining whether to control the market. In such a case, in addition to various factors to consider the determination of the relevant local market, in particular, the organization of the relevant domestic and foreign business entities in the relevant product market, the ratio of the quantity supplied or supplied to the domestic business entities to the foreign country during their production, the ease, stability, and continuity of export and import, tangible and intangible barriers to export and import, the difference between domestic and foreign prices, etc. should be considered.

B. Examining the reasoning of the judgment below in light of the above legal principles, it is justifiable that the court below deemed that "the goods shall not be deemed as goods which are in progress not subject to transaction by classifying them among the heat coins made by the plaintiff among the heat coins which are produced by the plaintiff," and further, that "the goods shall not be deemed as goods which are in progress not subject to transaction by distinguishing them from the heat coinscinscinsc inscinsc inscinsc inscinscinsc inscinscinsc inscinscinscinsc inscinscinscinsc inscinscinsc inscinscins, demand substitution aspects, supply substitution aspects, and Korean Industrial Classification, etc., and it shall not be possible to subdivide them into a separate market in which only the heat coinsc inscinsc inscinsc insc inscinsc inscinsc inscinscinscinsc inscinscinscinscinscins.

C. However, according to the reasoning of the judgment below, the defendant's supplementary intervenor (hereinafter referred to as "participating") issued the disposition of this case on the ground that the plaintiff refused the transaction, even though the plaintiff requested the plaintiff to supply the heat conditioning date for air conditioners on five occasions all over five occasions, such as August 6, 1997, June 1, 1998, October 10, 198, and October 10, 200, February 14, 2001, etc., the defendant issued the disposition of this case on the ground that the plaintiff refused the transaction. Such five refusals can be individually formed as a refusal. Since the provision on the concept of a market dominant enterprise was modified by the Fair Trade Act as of February 5, 199, it should be determined on the basis of whether the plaintiff was a market dominant enterprise under the former Fair Trade Act (hereinafter referred to as the "former Fair Trade Act").

Therefore, it is pointed out that the court below's determination of whether the refusal of the above three times constitutes a market dominant enterprise based on the Fair Trade Act after the amendment is erroneous.

However, in full view of the provisions of Article 2 subparag. 7 and Article 4(1) of the former Fair Trade Act, the main text of Article 4(1) and Article 4(2), and Article 7(1) of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 16221 of Mar. 31, 199), a market dominant enterprise refers to a market dominant enterprise designated and publicly notified by the Fair Trade Commission from among the suppliers of the goods or services in question in a market with at least 5/100 of the domestic market share of at least 10 percent or less than 3 percent of the total market share of at least 100 billion won in supply of the same or similar goods or services. According to the facts and evidence duly admitted by the court below, the Plaintiff’s domestic market share in the heat-to-rent market from 197 to 198 is at least 10 billion won, and the Plaintiff’s domestic market share was at least 50 billion won in the market designated and publicly notified for the last one year.

Thus, even according to the former Monopoly Regulation and Fair Trade Act, the plaintiff was a market-dominating enterpriser at the time of the refusal of the above three occasions, so the above error by the court below shall not affect the conclusion of the judgment.

2. As to the ground of appeal on the illegality of the refusal refusal in this case

A. As seen earlier, a refusal of market dominant position as a form of an abuse of the position of a market dominant enterprise prohibited by Article 3-2(1)3 of the Fair Trade Act refers to an act that makes it difficult for the market dominant enterprise to engage in its business activities by unfairly refusing a transaction with a specific enterprise. Therefore, in order for a refusal of market dominant position to constitute an abuse of the position of a market dominant enterprise, such a refusal of market dominant position should be evaluated as an act that unfairly makes it difficult for other enterprises to engage in business activities. In addition, in relation to the general principles of freedom of contract and private autonomy, it is a matter of whether the "unfairness" refers to an abuse of the position of

Article 23(1) of the Constitution provides that “All citizens’ property rights shall be guaranteed,” and Article 119(1) of the Constitution provides that “The economic order of the Republic of Korea shall respect an individual and an enterprise’s economic freedom and creative initiative.” The Constitution declares that the economic order based on the principle of private autonomy regarding private property and economic activities is based on the Constitution. This is based on the following: (a) allowing each individual citizen to meet the fundamental demand for life through free economic activities; and (b) guaranteeing the free use and benefit of private property and the disposal thereof; and (c) ensuring that the free use and benefit of private property and the disposal thereof is the best way to increase human dignity and value. However, Article 119(2) of the Constitution of the Republic of Korea provides that “The State may regulate and coordinate economic order to prevent market control and abuse of economic power; and (d) ensuring that the State’s freedom of economic policy and order, which is an economic market-dominating mechanism, can be maintained by the State’s sustainable economic and market-dominating trend, not by the State’s freedom of economic policy.”

In other words, in Korea, based on the market economy order based on the principle of private property and private autonomy concerning economic activities, in principle, the freedom of contract, including the decision of whether to conclude a contract, the choice of the opposite contractual party, and the decision of transaction details, may be restricted if there is a concern over abuse of the market's control and economic power. However, such restriction or regulation is not denied the principle of the civil law itself, but can be understood as the restoration of the original function of the market by correcting defects of the principle of the civil law.

The purpose of this Act is to promote fair and free competition, to encourage thereby creative business activities, to protect consumers, and to promote balanced development of the national economy. Article 3-2 of the Fair Trade Act, as one of the regulations for achieving the legislative purpose of the above Act, regulates abuse of status by market dominant enterprises.

In light of the Korean economic reality where there is a high concern about the harmful effects of monopoly and monopoly due to the influence of the past development economic era, etc., regulation on abuse of market dominant position is very important to maintain the competitive function as a prerequisite for the proper operation of the market economy principle.However, considering the recent trends of the so-called economic sophistication and globalization, etc. on the other hand, the above regulation is not necessary to enhance the global competitiveness based on the creativity of the company and ultimately to consider to be operated in the direction that can contribute to the increase of consumer welfare and economic development, and it is difficult for the company to fully exercise its ability due to unreasonable or excessive regulation.

In other words, today, companies are engaged in strategic business activities in a very variety of ways, and in the process, they enter into contracts with other business entities, but refuse to enter into contracts or determine the contracting party for a wide variety of reasons, and are interested in the terms of the contract. In such a process, a rejection of trade detrimental to competition shall be deemed illegal, and thus, competition shall be recovered by corrective measures. However, if it is disposed of in violation of laws that impose restrictions on competition solely on the ground that it does not have any intention or purpose or unclear strategic business activities are somewhat unfavorable, it is not only likely to cause such regulation to be a regulation for the protection of competitors, not the protection of competition, but also risk that it might undermine the original efficiency of the market economy, which is reconstructed by the market mainly with competitive business entities.

In addition, Article 3-2 (1) 3 of the Fair Trade Act regulates the act of refusal as an abuse of a market dominant position by a market dominant enterpriser, separately from this, where an individual enterpriser refuses a transaction by unfairly refusing a transaction under Article 23 (1) 1 of the Fair Trade Act, and thereby it is regulated by deeming it as an unfair trade regardless of the existence of a market dominant position by the enterpriser who has refused the transaction, and the transaction refusal as an unfair trade under Article 3-2 (1) 3 of the Fair Trade Act differs in the purpose and scope of regulation. Thus, the meaning of the illegality of the transaction refusal by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act differs from the illegality of the transaction refusal as an unfair trade under Article 23 (1) 1 of the Fair Trade Act.

Article 3-2 (1) 3 of the Fair Trade Act regulates a refusal of transaction as an abuse of a market dominant position by a market dominant enterprise, but regulates a refusal of transaction as an unfair trade act by all the enterprises including a market dominant enterprise under Article 23 (1) 1 of the Act. This is because there is a need to regulate it in a case where a refusal of transaction is judged to be an act which is likely to impede fair trade in the relation with the other party, regardless of whether the refusal of transaction constitutes the abuse of a market dominant position by a market dominant enterprise. Therefore, there is no restriction on the subject of the transaction refusal as an unfair trade act under Article 23 (1) 1 of the Fair Trade Act, and in a case where it is difficult or difficult to carry out business activities by excluding a certain enterpriser's transaction opportunity by taking into account whether the refusal of transaction constitutes an abuse of a market dominant position, such as in a case where the refusal of transaction has been used as a means to achieve the purpose of unfair control against the other party.

On the other hand, Article 3 of the Fair Trade Act imposes an obligation on the Fair Trade Commission to establish and implement a policy to promote competition in a monopoly and monopoly market, and Article 3-2 of the Fair Trade Act regulates the abuse of the position of a market-dominating enterprise as one of the acts of abuse of the position, and the reason why the Fair Trade Act regulates the abuse of the position of a market-dominating enterprise as one of the acts of abuse of the position of a market-dominating enterprise is because there is a need to regulate the refusal of the market-dominating enterprise to restrict competition in a monopoly and monopoly market. Therefore, the illegality of the refusal of the transaction as an act of abuse of the market-dominating position of a market-dominating enterprise under Article 3-2 (1) 3 of the Fair Trade Act should be interpreted in accordance with the legislative purpose of "promotion of competition in a monopoly and monopoly market." Thus, it is insufficient to recognize the illegality of the situation where a market-dominating enterprise refuses a transaction with the intention or purpose of the market-dominating enterprise, or where it causes disadvantages to a certain enterprise, such an act of restricting competition with the objective or purpose of the market.

Therefore, the defendant asserts that a transaction refusal by a market dominant enterpriser constitutes an abuse of status is likely to cause the effect of restricting competition such as price increase of goods, reduction of output, innovation impairment, decrease of the number of dominant competitors, decrease of diversity, etc. The defendant should prove that the refusal of transaction refusal has an intention or purpose to do so. If it is proved that the above effect has been practically achieved due to a transaction refusal, it is likely that it would cause restriction of competition at the time of the act, and that there was an intention or purpose to do so. However, if it is not so, it shall be determined whether the situation such as the circumstance and motive of the transaction refusal, the form of the transaction refusal, the form of the related market, the characteristic of the related market, the degree of disadvantage suffered by the transaction refusal due to the transaction refusal, the change in the price and output in the related market, the innovation and diversity reduction, etc., as well as whether there is an intention or purpose of the transaction refusal as above. In this case, the related market at which the effect of restricting competition is at issue shall be supplied not only to the market dominant enterpriser or the market, but also to the new product or the market.

B. The court below determined that the Plaintiff’s supply of heat conditioning to the intervenors, including the Plaintiff’s supply of heat conditioning date to the intervenors by converting them into an automobile condition, was in violation of the Plaintiff’s market dominant position of the Plaintiff’s refusal to supply heat conditioning date only to the intervenors who have entered the air conditioning market after its production, due to the Plaintiff’s abuse of market dominant position to maximize the market dominant position of the Intervenor’s final product such as waiver of the sale of automobile conditioning, and rupture to the supplier of raw materials for the manufacture of automobile conditioning. The court below determined that the Plaintiff’s refusal to supply heat conditioning date to the intervenors market because it was difficult for the Intervenor to maintain the market dominant position of the Intervenor due to the Plaintiff’s economic difficulty in purchasing the heat conditioning, as well as the lack of market dominant position of the Plaintiff’s new market dominant market dominant position of the Intervenor, and thus, it is difficult for the Intervenor to achieve the Plaintiff’s market dominant position of the Plaintiff’s market dominant enterpriser due to the lack of market dominant position in the market-dominating market.

C. However, as seen earlier, in a case where the effect of restricting competition such as the price increase in the relevant market due to the refusal of a market dominant enterpriser is revealed, it is likely that there was an intention or purpose of restricting competition to a market dominant enterpriser. The circumstances cited by the court below are merely the specific disadvantages suffered by the intervenor due to the refusal of the plaintiff's refusal of the case in this case, and it does not amount to the circumstances that can be recognized that the result of restricting competition was actually achieved. Furthermore, according to the evidence submitted by the court below, despite the plaintiff's refusal of the case in this case, the intervenor has produced and sold air conditioners by importing air conditioners from Japan to meet his own demand, and after the completion of the air conditioner plant in this case, it can be known that the intervenor has been engaged in normal business activities as an air condition producer and seller, such as continuously raising net profits since 2001, and it is difficult to accept the judgment of the court below since the plaintiff's refusal of the case in this case, there was no evidence to see that there was a restriction on competition such as reduction in domestic production of air condition or increase in price.

In addition, the refusal of the transaction refusal in this case constitutes a competitor even after the plaintiff who supplied the heat conditioning date, which is the raw material to the cooling market, enters the cooling market, and refuses to supply new technology to the participant, who is a competitor, who newly entered the cooling market. Although the plaintiff's refusal of the transaction is likely to affect new competitors in the cooling market which is the next cooling market by taking advantage of the market dominant position in the cooling market, there is no possibility that the plaintiff's new technology supplier's new technology supplier will suspend the supply of raw material to the cooling market and reduce the number of competitors by reducing their business ability, and eventually, the plaintiff's new technology supplier's refusal of the transaction in this case's market will maintain the framework of the cooling market formed by the existing cooling market, which is more favorable to the plaintiff's new technology supplier's new technology supplier's participation in the cooling market than the plaintiff's new technology supplier's market. Thus, the plaintiff's new technology supplier's refusal of the transaction in this case is no more likely to affect the plaintiff's new technology supplier's participation in the cooling market.

Therefore, the judgment of the court below which held that the refusal by the plaintiff in this case constitutes an unfair transaction refusal by a market dominant enterprise under Article 3-2 (1) 3 of the Fair Trade Act is erroneous in the misapprehension of legal principles as to the illegality in relation to the refusal by a market dominant enterprise, which affected the conclusion of the judgment.

3. Conclusion

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, except for a dissenting opinion by Justice Park Si-hwan, Justice Lee Hong-hoon, and Justice Ahn Dai-hee as to the decision on the illegality of the refusal

4. Dissenting Opinion by Justice Lee Hong-hoon and Justice Ahn Dai-hee as to determining the illegality of the transaction refusal in this case

A. The majority opinion held that there is no circumstance to see that the plaintiff's refusal of this case was practically a result of restricting competition, and there is no circumstance to recognize that the refusal of this case was made with the intent or purpose of restricting competition to the extent that it could have an effect of restricting competition, and that the plaintiff's refusal of this case constitutes an act unfairly interfering with other enterprisers' business activities under Article 3-2 (1) 3 of the Fair Trade Act, the decision of the court below was erroneous in the misapprehension of legal principles affecting the conclusion of the judgment. However, we cannot agree with the majority opinion for the following reasons.

B. (1) Article 119(1) of the Constitution declares that the basic principle of respect for freedom and creative initiative of economic activities is to respect, but Article 119(2) of the Constitution provides that the growth and stability of the national economy, the distribution of adequate income distribution, the control of the market and the abuse of economic power, the prevention of abuse of economic power, and the democratization of the economy through harmony among the economic entities through harmony. This guarantees private property rights, but declares the social market economy order that widely recognizes the State regulations and coordination in order to eliminate inconsistencys accompanying the free market economy and realize justice and economic democratization. To this end, the economic entities should give equal opportunity to each other and realize a justice society based on mutual autonomy and harmony. Article 1 of the Fair Trade Act provides that “The purpose of this Act is to prevent abuse of market dominant position and concentration of economic power, to regulate unfair collaborative acts and unfair trade practices, thereby promoting fair and free economic activities and to protect consumers, thereby promoting fair and free competition among the economic entities.”

(2) The reason why Article 3 of the Fair Trade Act imposes a duty to establish and implement policies to improve the market-dominating structure on the Fair Trade Commission under its Article 3 and regulates the abuse of market-dominating position by Article 3-2 is because the fact that there is a market-dominating enterpriser who has market power in the market has an important meaning under the social market economy order.

The market economy order is based on the core function of the price determined by the supply and demand. However, the market dominant business entity intends to adjust and control such market economy order to function as a direction favorable to himself/herself, instead of naturally functioning it. As a result, in the market where there exists a market dominant business entity, the risk of not operating the market economy system is extremely high, and it is difficult to maintain the fair and free competition order in reality. This is because each country’s competition law focuses on regulating “the formation of the market dominant power and its abuse” without exception through regulation on abuse of market dominant position, combination of enterprises, cartels, etc.

As such, the existence of a market-dominating enterpriser in the market refers to a situation in which the market-dominating enterpriser is able to considerably exceed the fair and free competition already pursued by the Fair Trade Act, but on the other hand, the acquisition of the market-dominating power from the perspective of the enterpriser has the characteristic of the objective to achieve through the continuous “competitive competition process.” The final reason why the enterpriser wishes to take advantage of the competition with other enterprisers through the simple efforts in the market is to become an fluorous enterpriser who has superior competitiveness to the other enterprisers and is in the last time in the market. Such motive and inducement may also have a positive effect that the enterpriser makes efforts to conduct an excessive research and development and technological innovation.

Korean Fair Trade Act does not regulate the appearance or existence of a market-dominating enterprise through fair and free competition in the market, taking into account the above two characteristics of the market-dominating enterprise, and adopts the so-called negative regulation system that regulates the harm that may be caused by a market-dominating enterprise by prohibiting the abuse of the market-dominating position. Therefore, Article 3-2 of the Fair Trade Act specifically regulates the acts that are likely to obstruct competition in the market by abusing the market-dominating position of the market-dominating enterprise. As a result, the market-dominating enterprise is subject to considerable restrictions on private autonomy compared to other enterprises. In other words, the market-dominating enterprise is subject to relatively high restrictions on the contents of the freedom of contract, such as the determination of the price, production and shipment volume, exclusive contract with the distributor, and permission of access to essential factors. This is a measure to prevent the market-dominating enterprise from abusing its market-dominating position and impeding fair and free competition in the market.

(3) Examining the contents of the relevant laws and regulations regarding Article 3-2(1)3 of the Fair Trade Act, the above Article 3-2(1)3 of the Fair Trade Act provides that a market-dominating enterpriser shall not “an act unreasonably interfering with the business activities of other enterprisers”, and Article 3-2(2) of the Fair Trade Act delegates the type or standard thereof to the effect that it can be determined by Presidential Decree. Article 5(3)3 of the Enforcement Decree of the Fair Trade Act provides that “an act that makes it difficult for other enterprisers to engage in business activities by any improper means other than those under subparagraphs 1 and 2, and is publicly notified by the Fair Trade Commission”. Article 5(3)3 of the Enforcement Decree of the Fair Trade Act provides that “the criteria for the examination of abuse of market-dominating position publicly notified by the Fair Trade Commission (Article 200-6 of the Fair Trade Commission notification of September 8, 200).” (c) of March 1, 2

In general, if a supplier refuses a transaction with a customer, the supplier's sales volume is reduced and the market dominant power is reduced, thereby causing economic loss. If an economic entity pursuing a profit refuses a transaction even when the supplier suffers economic loss, it shall be deemed that there is a corresponding purpose. However, in the case of a general business entity which has no market dominant power, consumers are engaged in a transaction with another supplier despite its refusal of transaction, so it does not have any particular impact on the competitiveness or market share due to the change of the customer. However, if a market dominant business entity refuses a transaction, the number of products which consumers can choose a supplier or be supplied with the market dominant business entity may be considerably reduced and its competitiveness is restricted. Furthermore, the increase in the competitiveness of other consumers selected by a market dominant business entity may cause a big change in the market structure to which the market dominant business entity belongs. Furthermore, the market dominant business entity's market dominant business entity's market dominant business entity's market dominant business entity's market dominant business entity's market dominant business entity's market dominant business entity's market dominant business entity's market influence or influence through a market dominant business entity's market dominant business.

Moreover, the refusal of a transaction to an enterpriser in competition in the market for a product produced by using the product supplied at the same time as in the instant case does not constitute a single competitive means by abusing the market dominant position beyond the scope of the freedom of conclusion of the contract, which is merely the choice of the other party.

In full view of the above circumstances, in interpreting Article 3-2 (1) 3 of the Fair Trade Act, in cases where a market-dominating enterpriser refuses a transaction to another enterpriser and thereby makes it difficult for the enterpriser to conduct business activities, it is reasonable to interpret that the act is presumed to have committed an "unfair act" that is likely to abuse his/her market-dominating position and impede fair and free competition in the market. Therefore, in order for a market-dominating enterpriser to escape from the above presumption, it shall be argued and presented that the refusal is not an "unfair act" that actually obstructs other enterpriser's business activities, or that there is a justifiable reason to refuse the transaction, even if it falls under such an act.

(4) In order for a market dominant enterprise to be deemed to be an abuse of status, the Majority Opinion construed that the Defendant’s intent and purpose should be proved to have proved that the act is likely to have the effect of restricting competition, such as price increase of goods in the market, reduction of output, innovation impairment, decrease of the number of significant competitors, decrease of diversity, etc.

However, the Majority Opinion is not a matter that can be easily proven, but rather requires considerable time and cost to prove that the price increase, calculated volume of goods, the innovation, the decrease in the number of significant competitors, and the decrease in diversity in the number of competitive enterprisers in the market cited as examples by the Majority Opinion. As such, if the Defendant requires the proof of such matters, the scope of transaction refusal by a market dominant enterprise to be recognized as unfair would considerably narrow, and the timely response would not be possible. Although Article 3-2 (1) 3 of the Fair Trade Act is actually narrow, it may result in a concern that the application of Article 23 (1) 1 of the Fair Trade Act to the act that makes it difficult for a market dominant enterprise to engage in business activities by refusing to trade with another business entity, which is contrary to the legislative purpose of the Fair Trade Act to regulate the market dominant business entity differently from the general business entity.

(5) Therefore, if the defendant proves that the plaintiff, a market dominant business entity, refused to engage in transactions with the intervenor, who is another business entity, and thereby making it difficult for the plaintiff to conduct the business activities of the intervenor, the plaintiff should be presumed to have committed an "unfair act" which might abuse his market dominant position and impede fair and free competition in the market. However, the majority opinion's interpretation of Article 3-2 (1) 3 of the Fair Trade Act, which states that the defendant must prove the illegality as a concern that the effect of restricting competition in the market may occur in the market, is contrary to the legislative decision of the Korean Fair Trade Act with the aim of promoting fair and free competition by preventing abuse of the market dominant position and excessive concentration of economic power, while guaranteeing the right of private property, it is inconsistent with the legislative decision of the Korean Fair Trade Act with the aim of realizing the economic democracy through a balanced growth and stability of the national economy and the harmony between the justice society and the economic entity that maintain the distribution of proper income.

C. (1) Examining the reasoning and records of the lower judgment, in this case, the Plaintiff’s refusal to supply an automobile coolant to the Intervenor is in a dominant position in the heat smoke market. Thus, barring any special circumstance, the refusal of the instant transaction refusal against the Intervenor constitutes an abuse of market dominant position by unfairly refusing a transaction in violation of Article 3-2 of the Fair Trade Act. Therefore, the Plaintiff’s assertion and proof should be raised as to the fact that the Intervenor’s business activity was not substantially impeded due to the refusal of the instant transaction, that there was no intention or purpose, or that there was a justifiable reason for the Plaintiff to refuse the transaction.

(2) The refusal of the instant transaction was intended not to provide raw materials to the intervenors who intend to be a competitor in the market for the cooling steel plate supplied by the Plaintiff. As such, due to the Plaintiff’s refusal of transaction, the Intervenor had suffered considerable difficulties in business activities due to the disadvantage of the Intervenor, such as additional burden of expenses (fe.g., fares, customs duties, loading and unloading expenses) due to the import of the thermal cocoin for cooling smoke and the instability in the transaction (e.g., the lack of stable securing of the quantity, the decline in productivity due to mixed use of raw materials, the rapid adjustment of the market change due to excessive transport period, and the exchange risk, etc.).

Furthermore, in the process of the refusal to trade in this case, the Plaintiff claimed to the effect that the Plaintiff’s supply of the heat cocoin for the coolant to the intervenors would renounce the sale of the automobile coolant, which is the final product of high value, and fall into the Intervenor’s supply company of the raw material for the manufacture of automobile coolant. This cannot be said to be the intent of the Intervenor to prevent the change in the market share or market structure by appearing as a competitor in the cooling steel market.

In light of the above, as pointed out in the majority opinion, the plaintiff refused a new transaction, rather than suspending the previous transaction. Despite the plaintiff's refusal of the transaction in this case, the plaintiff's intervenor imported heat from Japan to produce and sell air conditioners in line with his own demand and continued to raise the net profit since 2001 after the commencement of the normal operation of the air conditioners, and other reasons alleged in the plaintiff's grounds for appeal, it cannot be deemed that there was sufficient proof as to the fact that the plaintiff did not make the intervenor's business activities difficult in the market for the air conditioners, or that there was no intention or purpose for the plaintiff.

Ultimately, the refusal of the plaintiff's refusal against the plaintiff's intervenor constitutes an act of unfairly refusing a transaction with another enterpriser and obstructing the business activities of the enterpriser. Although the court below did not comply with the above legal principles as to the burden of proof, it is just in this part of the judgment below, and there is no violation of the rules of evidence or misapprehension of legal principles as to the criteria for determining the illegality of the refusal of transaction refusal as otherwise alleged in the ground of appeal.

(3) Next, the issue of whether a transaction refusal by a market dominant enterprise is justifiable, such as a reasonable and inevitable business refusal, shall be determined by comprehensively taking into account the purpose and background of the refusal of a transaction, trade status and management status of the parties, business necessity, characteristics of the refusal of transaction, market situation, and the result of the refusal of transaction.

The court below determined as follows, based on its adopted evidence, that although an efficient system for production and management of the air conditioners for automobiles should be established, its technology development and facility investment possible, it cannot be viewed as having global competitiveness and producing safe air conditioners. In light of the principle of fair trade and the intervenor's production capacity, such as prohibition of unfair support, even if the plaintiff supplied the air conditioners to the intervenor, it cannot be deemed that the intervenor's vertical relation with the participant, and it cannot be seen as appropriating most of the demand for air conditioners for air conditioners for automobiles in modern and international countries where the intervenor offered 80% or more of the demand for air conditioners for automobiles in Korea. Thus, the court below held that the intervenor's demand for air conditioners in light of the plaintiff's facility operation rate, economic situation, and supply and quantity at the time when the intervenor requested the plaintiff to supply air conditioners to the plaintiff, as long as the plaintiff refused to supply it in whole or in part, it cannot be deemed that the plaintiff's business refusal was a justifiable reason for business refusal against the intervenor.

In light of the above legal principles, the above judgment of the court below is just and acceptable, and there is no violation of the rules of evidence or misapprehension of legal principles as to the legitimate grounds for refusal of transaction as otherwise alleged in the ground of appeal

D. Therefore, it is reasonable to dismiss the appeal, and the majority opinion differs from this opinion, and I express my opinion as above as the dissenting opinion.

5. Dissenting Opinion by Justice Park Si-hwan as to determining the illegality of the refusal refusal in this case

A. The majority opinion assumes that a transaction refusal as an abuse of a market dominant position by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act and a transaction refusal as an unfair trade under Article 23 (1) 1 of the Fair Trade Act differs in the regulatory purpose and scope. Thus, the meaning of the illegality of a transaction refusal by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act should be independently evaluated and interpreted apart from the illegality of a transaction refusal as an unfair trade under Article 23 (1) 1 of the Fair Trade Act. In light of the legislative purpose and purport of Article 3-2 of the Fair Trade Act to prevent the abuse of a market dominant position by a market dominant enterpriser in terms of the "promotion of competition in a market dominant position", in the case of a transaction refusal by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act, it is insufficient to say that a specific enterpriser suffers a disadvantage due to a market dominant enterpriser's refusal of a transaction, and it can be objectively recognized that such a transaction refusal has an effect.

We cannot agree with the majority opinion that grasps the meaning of "unfairness" of a transaction refusal by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act in terms of restricting competition as above. The reasons are as follows.

B. (1) As the majority opinion, if the meaning of "unfairness" of the transaction refusal by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act is understood only as an act with a subjective and objective perspective, it goes against the spirit of our Constitution and the legislative purpose of the Fair Trade Act to regulate monopoly by regulating cases where the market dominant enterpriser abuse its market dominant power.

As pointed out in the Dissenting Opinion by Justice Lee Hong-hoon and Justice Ahn Dai-hee, a market dominant enterprise is likely to coordinate and control the market economy order which is the basis of competition, and the existence of a market dominant enterprise in the market economy order can considerably escape from the fair and free competition already pursued by the Fair Trade Act. In light of the meaning of the market dominant enterprise in the market economy order, in a case where a market dominant enterprise conducts a transaction refusal, even though the transaction refusal is not likely to restrict competition, there is a need to regulate it in the aspect of the Monopoly Regulation and Fair Trade Act in a case where the transaction refusal is made by the market dominant enterprise. In other words, the Majority Opinion recognizes the meaning of the "Mono Regulation" pursued by the Constitution and the Fair Trade Act only in the aspect of protecting competition, and limits the meaning of the "unfairness" of the refusal of transaction as an abuse of the market dominant position, but in a case where the refusal of transaction by the market dominant enterprise is made by the abuse of the market dominant position, it should

(2) In light of the regulatory structure and content of the Fair Trade Act, it is inappropriate to interpret the meaning of “unfairness” of a transaction refusal as an abuse of market dominant position by a market dominant enterpriser under Article 3-2(1)3 of the Fair Trade Act as a threat of restricting competition.

Article 2 subparag. 8-2 of the Fair Trade Act defines the meaning of restricting competition, and Article 7(1) prohibits the combination of enterprises that restrict competition, and Article 19(1) of the Fair Trade Act explicitly prohibits unfair collaborative acts that restrict competition. The purpose of the Fair Trade Act is to regulate competition in the context of restricting competition. However, in examining the text of Article 3-2 of the Fair Trade Act that prohibits abuse of market dominant position, there is no expression that restricts the scope of application by restricting competition. This is because Article 3-2 of the Fair Trade Act does not merely regulate the abuse of market dominant position, but also regulate the harm that may be caused by abuse of market dominant position by the market dominant enterpriser regardless of the concern of restricting competition.

Article 3-2 of the Fair Trade Act provides that the legislative purpose of the Fair Trade Act is not simply to regulate the abuse of market dominant position in terms of restricting competition. In other words, the abuse of market dominant position under Article 3-2 of the Fair Trade Act is more clear from the perspective of the types of abuse of position under Article 3-2 of the Fair Trade Act. In other words, the abuse of market dominant position under Article 3-2 of the Fair Trade Act is the act of unfairly determining, maintaining, or changing the price of goods or services (Article 1), the act of unfairly regulating the sale of goods or the provision of services (Article 2), the act of unreasonably impeding the business activities of other enterprisers (Article 3), the act of unreasonably impeding the participation of new competitors (Article 4), the act of unfairly excluding competitive enterprisers, or the act of remarkably impeding the interests of consumers (Article 5). In other cases, the illegality of other enterprisers is derived from the act of unfairly excluding competitive enterprisers or the act of causing disadvantage to other enterprisers, not from the risk of restricting competition.

In this case, according to the relevant laws and regulations of Article 3-2(1)3 of the Fair Trade Act, in the case of a transaction refusal as an abuse of a market dominant position by a market dominant enterpriser, it is interpreted that "an act that makes it difficult for the market dominant enterpriser to engage in its business activities by unfairly refusing a transaction with a specific enterpriser." Even according to the interpretation of such interpretation, a transaction refusal as an abuse of a market dominant position is sufficient if the transaction refusal in question is an act that makes it difficult for another enterpriser to engage in an "unfair business activities" as the other party to the transaction refusal, and thereby, there is no possibility that competition will be restricted in the market. Thus, the restriction of competition in the market is not required.

(3) However, it is difficult to evaluate and interpret the “unfairness” of a refusal of market dominant position as an abuse of position by a market dominant enterprise as referred to in the Majority Opinion, and if a market dominant enterprise’s refusal of transaction is an act that makes it difficult to “unfairly” the business activities of another enterprise, it is a matter of whether it can be evaluated as an abuse of market dominant position by making it difficult for other enterprises to “unfairly” the business activities of the market dominant enterprise in any case.

In order to examine this issue, it is necessary to examine Article 23 of the Fair Trade Act which regulates unfair trade practices. As seen earlier, the majority opinion interprets a transaction refusal as an abuse of a market dominant position as “an act that makes it difficult for a business entity, which is the other party to a transaction,” and thus, it should be able to cause disadvantages to other business entities due to a transaction refusal. However, the disadvantage that may be inflicted on the other party due to a transaction or a transaction refusal is an important factor for assessing the illegality of unfair trade practices under Article 23 of the Fair Trade Act as pointed out by the majority opinion, and therefore, in the case of an abuse of a market dominant position against another business entity, at least the other business entity, the disadvantage to the other party should be considered.

In the past, with respect to the illegality of the so-called individual transaction refusal, such as the refusal of transaction under Article 23 (1) 1 of the Fair Trade Act, which is conducted by an individual enterpriser against the transaction partner, the Supreme Court has held that such refusal constitutes a refusal of transaction as an unfair trade under Article 23 of the Fair Trade Act, which is likely to impede business activities by excluding a specific enterpriser's transaction opportunity, or which is conducted as an abuse of status by a tangible enterpriser who has the intention to make it difficult to conduct business activities, or which is committed as a means to secure the effectiveness of the purpose of compulsory trade as prohibited by the Act (see Supreme Court Decision 2004Du8514, Mar. 30, 2007, etc.).

However, in a case where the above-mentioned type of transaction refusal, which is presented in the previous Supreme Court precedents, is a market dominating enterprise, the transaction refusal can be evaluated as an act that has abused the market dominating position and makes it difficult for other enterprises to conduct business activities unfairly. Ultimately, the standard for determining the illegality of the transaction refusal as an unfair trade act under Article 23 (1) 1 of the Fair Trade Act can be based on the standard for determining the "unfairness" of the transaction refusal as an abuse of the market dominating position under Article 3-2 (1) 3 of the Fair Trade Act.

Therefore, the illegality of a refusal of transaction refusal as an abuse of a market dominant position by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act and the illegality of a refusal of transaction refusal as an unfair trade act under Article 23 (1) 1 of the Fair Trade Act is basically the same meaning.

(4) On the other hand, the Fair Trade Act places more emphasis on imposing sanctions, such as penalty surcharges on the abuse of market dominant position by a market dominant enterprise, while interpreting the meaning of the illegality of a market dominant position as the abuse of market dominant position by the majority opinion under Article 3-2 (1) 3 of the Fair Trade Act, the act of abuse of market dominant position, which is regulated by Article 3-2 of the Fair Trade Act, causes a result of a decrease in the possibility of establishing the act of abuse of market dominant position, which is ultimately contrary to Article 23 (1) 1 of the Fair Trade Act, which aims to regulate the abuse of market dominant position by all the enterprises as a principal offender, and thereby, it brings about a result contrary to the legislative intent of Article 3-2 of the Fair Trade Act in order to reduce the harm caused by the market dominant enterprise by placing more emphasis on the possibility of abuse of market dominant position by a market dominant enterprise as a principal

In this respect, the majority opinion is not appropriate to limit the illegality of a refusal of transaction as an abuse of a market dominant position by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act, which is a unfair trade act under Article 23 (1) 1 of the Fair Trade Act, only where there is a concern of restricting competition by grasping it as an entirely different concept from

C. Examining the circumstances cited by the court below as the ground for recognition of illegality in accordance with the legal principle that the illegality of a transaction refusal as an abuse of a market dominant position by a market dominant enterpriser under Article 3-2 (1) 3 of the Fair Trade Act should be evaluated and interpreted as the same meaning as the illegality of a transaction refusal as an unfair trade under Article 23 (1) 1 of the Fair Trade Act, the refusal of the plaintiff's transaction refusal against the plaintiff's participant is conducted under the intention of denying the transaction of the heat-free market which is essential for the production of the cooling frigerum market to the participant who newly entered the new market, which is the frigerum market, by abusing the market dominant position in the cooling frigerum market, thereby making it difficult for the competitor's competitor's business activities in the cooling frigerum market and continuously maintaining and strengthening his/her market dominant position.

Therefore, although the reasoning of the court below is somewhat inappropriate, it is just in its conclusion that the court below affirmed the illegality of the transaction refusal in this case. The court below did not err in the misapprehension of the rules of evidence or in the misapprehension of the legal principles as to the criteria for determining the illegality of the transaction refusal, as

In addition, the dissenting opinion by Justice Lee Hong-hoon and Justice Ahn Dai-hee that the refusal of transaction against the intervenor cannot be deemed to be based on a justifiable managerial reason is justified, and thus, this shall be invoked.

D. Therefore, it is reasonable to dismiss the appeal, and the majority opinion is different from the majority opinion.

Chief Justice Lee Yong-chul (Presiding Justice)