2017Du36212 Revocation of an order to pay penalty surcharges

Tyang Industries Co., Ltd.

[Defendant-Appellant] Hong-il et al., Counsel for defendant-appellant

Fair Trade Commission

Government Legal Service Corporation (Law Firm LLC)

Park Jong-si et al., Counsel for the defendant-appellant

Seoul High Court Decision 2016Nu53069 Decided January 12, 2017

November 12, 2020

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Legal grounds for the increase of penalty surcharges on the ground of obstruction of investigation (ground of appeal No. 2)

A. Article 55-3(1) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 14813, Apr. 18, 2017) provides that “where a penalty surcharge is imposed, the details and degree of the violation (No. 1), duration and frequency of the violation (No. 2), and “the size, etc. of profits acquired from the violation (No. 3)” shall be considered, and the criteria for imposing a penalty surcharge under paragraph (5) shall be prescribed by Presidential Decree.

Article 61 (1) [Attachment 2] 2 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 27034, Mar. 8, 2016) provides that "A penalty surcharge shall be calculated in consideration of the grounds for and effects of the subparagraphs of Article 55-3 (1) of the Act, on the basis of the standards for calculation of penalty surcharges; however, "a penalty surcharge shall be calculated after adjustment according to the period, frequency, etc. of the violation; and adjustment according to the intention, negligence, etc. of the violator; and a penalty surcharge shall be determined and announced by the Fair Trade Commission in accordance with the standards determined and announced by the Fair Trade Commission within 50/100 of the adjusted calculation standards, in addition to the matters prescribed in subparagraph 3 of the Enforcement Decree."

According to the language, content, and structure of such statutes, the Fair Trade Act provides for the grounds necessary for calculating penalty surcharges on a comprehensive and exemplary basis and delegates specific considerations and detailed standards to the public notice by the Fair Trade Commission. It is based on the provision and delegation of the aforementioned statutes that the Fair Trade Commission determines that the reason for the second adjustment from the former Public notice on the detailed standards, etc. for imposing penalty surcharges (amended by Act No. 2013-2 of Jun. 5, 2013) IV. 2.(b)(4) of the former Public Notice on the Imposition of Penalty Surcharges (amended by the Public Notice No. 2013-2 of the Fair Trade Commission Notice No. 2013 of Jun. 5, 2013 (hereinafter referred to as the “instant

Meanwhile, the Fair Trade Commission has the discretion to determine whether to impose penalty surcharges and the amount of penalty surcharges within the scope of the maximum penalty surcharge under the Fair Trade Act. The instant notification provision is a discretionary rule, i.e., administrative agency’s internal rules established based on the exercise of discretionary authority with respect to the calculation of penalty surcharges. Such discretionary rules ought to be respected as much as possible, insofar as it is not recognized that the standards are inconsistent with the Constitution or laws or that the standards are not objectively reasonable, and that discretionary power is abused (see Supreme Court Decision 2016Du35199, Jan. 12, 2017).

B. The lower court determined as follows. The Fair Trade Act provides that the Fair Trade Commission may consider additional factors necessary to achieve the purpose and purpose of the penalty surcharge system by comprehensively prescribing the grounds to be considered when calculating penalty surcharges without limiting the grounds to be considered. In determining penalty surcharges within the statutory upper limit, the Defendant set the standards to consider the act of investigating and obstructing investigation as a mitigated element, as an aggravated element. Even if the Defendant determined that the act of investigating and obstructing investigation by the violating enterpriser was invalid as a regulation without any legal basis. Such circumstances cannot be deemed null and void even if the instant notice provision was deleted thereafter.

In light of the aforementioned legal principles, the lower court did not err by misapprehending the legal doctrine on the legal basis of the increase of penalty surcharges on the grounds of just investigation obstruction.

2. Whether the Plaintiff’s obstruction of investigation constitutes an aggravated violation (Ground of appeal No. 1)

(a) Recognition of interference with investigation;

The lower court determined that the Defendant did not err in recognizing the Plaintiff’s interference with the investigation on the following grounds. The instant notification provision only provides that “In the event an offender or an executive officer or employee thereof refuses, interferes with, or evades the investigation of an offense,” and does not require the result of interference with the investigation. In addition to the act of obstructing the investigation in recognizing interference with the investigation under the said provision, it does not require any actual interference with the investigation. Examining the relevant legal principles and records, the lower court determined that the circumstances to determine interference with the investigation were premised on the premise that the circumstances in order to determine whether the aforementioned interference with the investigation were not the grounds for disposition related to the establishment of the offense subject to penalty surcharge, but the discretionary consideration for calculating the specific amount of penalty surcharge, rather than the grounds for disposition related to the establishment of the offense subject

(b) Aggravation and increase ratio of penalty surcharges;

The lower court determined as follows. In comparison with the seriousness of the case, the Defendant’s application of 10% increase rate for the obstruction of investigation by Han Cement Co., Ltd. among the instant enterprisers, and the application of 20% increase rate for the obstruction of investigation by the Plaintiff is not unlawful. The Plaintiff’s act of obstruction of investigation, which is more illegality than the Plaintiff’s act, is imposed only on the Plaintiff’s act of obstruction of investigation, and the application of aggravated regulations for obstruction of investigation is different from the instant case’s specific facts. It is difficult to recognize that there was an administrative practice binding on the Defendant as to the failure to apply aggravated regulations for obstruction of investigation solely on the grounds that there were some decisions different from the previous decisions made by the Defendant. It is insufficient to recognize that the Defendant arbitrarily treated the Plaintiff and the business owner who committed the same or similar acts identical with or similar to the instant joint conduct without any reasonable reason, and in light of the relevant legal principles and records, there was no error

3. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit, 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.

The presiding Justice shall mobilization by the presiding Justice

Justices Kim Jae-sik in charge

Justices Min Min-young

Justices Noh Tae-ok