2018Du37700 Action for revocation, such as a corrective order

ELPus Co., Ltd.

Attorney Yang Sung-tae et al., Counsel for the defendant-appellant

Fair Trade Commission

Attorney Kim Shin-hoon, Counsel for the plaintiff-appellant

Artificial Bank Co., Ltd.

Law Firm LLC et al., Counsel for the defendant-appellant-appellant

Seoul High Court Decision 2015Nu38278 Decided January 31, 2018

on June 30, 2021

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

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

1. Case summary

According to the reasoning of the lower judgment, the following facts are revealed.

A. The Plaintiff is a key telecommunications business operator who obtained permission from the Minister of Science, ICT and Future Planning (the Minister for Information and Communications Technology (the Minister for Information and Communications Technology; hereinafter the same shall apply) pursuant to Article 6 of the Telecommunications Business Act, and is a business operator under Article 2 subparag. 1 of the Monopoly Regulation and Fair Trade Act (wholly amended by Act No. 17799, Dec. 29, 2020; hereinafter “Fair Trade Act”). The Plaintiff became the Plaintiff by combining this Telecom and ELS (the term “stock company” when the name of the company is called “the name of the company”) with which he/she has engaged in the wire communications business on January 1, 2010.

B. Corporate domain service is a service of transmitting text messages to users’ cell phone terminals via a mobile network of mobile communications business operators in a company’s computer. This is used in various fields, such as financial institutions such as banks, card companies, and securities companies, public institutions, shopping malls, hospitals, etc., and credit card approval, bank entry and exit, securities transaction, and shopping order delivery notice service is an example.

In accordance with Article 2 of the Telecommunications Business Act, corporate metrative services constitute value-added telecommunications services, other than common telecommunications services, and shall report to the Minister of Science and Technology for future creation pursuant to Article 22 of the same Act: Provided, That where a common telecommunications business operator intends to operate value-added telecommunications services, he/she shall be deemed to have reported value-added telecommunications services, and the common telecommunications business operator may engage in this business without any separate report. Among three common telecommunications business operators providing mobile telecommunications services (hereinafter, the same shall apply), the Plaintiff and the case produces and sells the corporate metrative services with the exception of est telecom, among them.

다. 기업메시징서비스 시장은 2000년대 초반 피고보조참가인(이하 '보조참가인'이라 한다)이 은행, 카드사 등 금융기업을 통해 이용고객의 카드승인내역, 은행계좌 입출금 내역 등 각종 금융알림 문자서비스를 제공하기 시작하면서 형성되었다. 시장 형성 당시에는 기업메시징서비스에 대한 시장의 인식이 낮은 편이어서 금융사고 예방과 마케팅 등 일부 영역에서만 한정적으로 사용되었다. 이후 금융정보, 개인정보, 마케팅 문자를 중심으로 수요가 급증하면서 시장이 빠르게 성장하였다. 이 과정에서 원고의 합병 전 법인인 엘지데이콤, 케이티, 스탠다드네트웍스, 다우기술, 삼성네트웍스(현 삼성 에스디에스), 에스케이텔링크 등이 시장에 진입하였다.

The corporate domain service market may be divided into trade 'transaction' between a mobile communications business operator and a corporate domain business operator (hereinafter referred to as "transmission service') and 'transaction 'corporate domain service' between a business operator and a customer. A mobile communications business operator shall enter into a contract for the transmission service with a business operator and shall provide the transmission service that sends text messages to a customer who has joined the mobile communications network through the wireless communications network. The relevant mobile communications business operator may only send text messages to the user who has joined the mobile communications service. As the relevant mobile communications business operator may send text messages to the user who has joined the specific mobile communications network, if the customer of the business does not send text messages only to the customer who has joined the specific mobile communications network, the business operator shall enter into a contract for the transmission service with all domestic mobile communications business operators.

(d) A corporate domain service provider is largely divided into a service provider holding a wireless communications network and a service provider not holding a wireless communications network. Among the service providers related to corporate domain services, there are resale service providers who purchase and sell products produced by a corporate domain service provider, and there is also a service provider who directly produces and sells corporate domain services with a mobile network operator upon entering into a service contract with a mobile network operator and at the same time purchases and resells products of another corporate domain service provider at the same time.

결과적으로 기업메시징 사업자는 ① 원고, 케이티와 같이 무선통신망을 보유하여 전송서비스도 제공하면서 기업메시징서비스업을 영위하는 사업자, ② 다우기술, 스탠다드네트웍스, 에스케이네트웍스서비스와 같이 위 3개 이동통신사업자와 전송서비스 이용계약을 체결하여 기업메시징서비스를 생산·판매하는 사업자, ③ 보조참가인, 슈어엠, 삼성에스디에스, 에스케이텔링크와 같이 기업메시징 서비스를 생산 · 판매하면서 다른 기업메시징사업자의 상품을 재판매하기도 하는 사업자로 구분된다(씨제이시스템즈, 롯데정보통신, 씨제이헬로비전 등 재판매사업만 영위하는 사업자는 기업메시징서비스를 직접 생산·판매하지 않으므로 기업메시징사업자가 아니다).

E. Three mobile communications business operators, including the Plaintiff, are key telecommunications business operators, and report to the Minister of Science, ICT and Future Planning by setting terms and conditions for service charges pursuant to the Telecommunications Business Act. According to the above terms and conditions, all three mobile communications business operators have a flight-type price system at which the unit price for each transaction is low. The unit price for each section is different depending on each business operator, but the minimum unit price, excluding all three basic fees, is more than 30 million won per case, 9 won per case, if the unit price exceeds 30 million won per case, and 10 won per case, if the case exceeds 20 million won, and 10 million won per case. The Plaintiff sells the transmission service using his/her radio communications network to another business operator, and purchases the transmission service using his/her own radio communications network from 10-20 won per case to 9-20 won per case.

F. From June 2010 to December 2013, 2013, the Plaintiff sold a number of business customers at a price lower than the average service charges [mark] on the average service charges for each case of transmission services (hereinafter referred to as “instant act”). In other words, the Plaintiff sold corporate mail services at a price lower than the service charges it purchases from Ecomcomcom or K, and the Plaintiff sells from 8 won to the level lower than the minimum service charges for transmission services it provides to other business operators.

The following table is the average of the minimum service charges per unit of each transmission service (hereinafter referred to as the "minimum service minimum service sales unit price") of each transmission period, with regard to the fact that the company-based business operator should use the radio communication network of three mobile communications business operators at the same time in order for them to provide services to business customers, the average of the minimum service charges by each mobile communications business operator (5: 3:2) of each mobile communications business operator is an aggravated average of each subscriber's share (5: 3:2).

A person shall be appointed.

G. On February 23, 2015, the Defendant issued a corrective order and penalty surcharge as stated in the attached Form of the lower judgment to the Plaintiff (hereinafter “instant disposition”). For that reason, the Plaintiff’s act constitutes an abuse of market dominant position under Article 3-2(1)5 of the Fair Trade Act and Article 5(5)1 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act (hereinafter “Enforcement Decree of the Fair Trade Act”), where the Plaintiff, who is a market dominant enterpriser in the corporate domain service market through the domestic radio communication network (hereinafter “corporate domain service market”), might unfairly supply goods or services at a price lower than ordinary transaction prices, thereby excluding competitors.”

2. The lower judgment and the key issue

A. On the grounds delineated below, the lower court revoked the instant disposition on the grounds that it was unlawful.

The ordinary transaction price under Article 5(5)1 of the Enforcement Decree of the Fair Trade Act is the realistic price formed in the market when the efficiently competitor selects the transaction in light of the economic and management situation at the time of the transaction, the structure of the market in question, and the uncertainty of future forecasts. It is reasonable to view that the Defendant calculated the ordinary transaction price based on the minimum sale price of transmission service, and it is difficult to view it as the method of calculating the ordinary transaction price of "corporate mail services" even though it can be seen as the method of calculating the ordinary transaction price of "transmission service." Even if such calculation method is recognized, the ordinary transaction price calculated by the Defendant is not only reasonable because it is based on the principle of formation of the market price, the Plaintiff's cost structure, but also on the basis of the approximate presumption without necessary research and analysis.

Furthermore, the evidence submitted by the Defendant alone does not constitute an act that could objectively exclude competitors objectively. It is difficult to view that the Plaintiff’s intent or purpose is to maintain and strengthen monopoly points at the time of the instant act, and it is difficult to view that the Plaintiff’s act was “an unreasonable concern over excluding competitors by providing the Plaintiff’s act at a price lower than the ordinary transaction price.”

B. The key issue is (1) whether the Plaintiff’s act of selling corporate domain services at a price lower than the minimum selling price of transmission services constitutes “act of providing for a price lower than the ordinary market price” and (2) whether it is recognized that it is improper as an abuse of market dominant position by a market dominant enterprise as a means of profit-tension squeeze.

3. Supreme Court Decision

A. When a market dominant enterprise produces and sells goods or services (hereinafter referred to as "wholly used materials, etc.") based on raw materials, etc. in the upstream market (hereinafter referred to as "standard materials, etc.") as a type of abuse of market dominant position, which is a business operator engaged in both different manufacturing stages according to the chain of supply chain, and directly integrated business operator who is engaged in both different manufacturing stages, depending on the chain of supply chain, at the same time, supplies the goods or services (hereinafter referred to as "wholly used materials, etc.") that are essential for a business operator's production activity in the upstream market (hereinafter referred to as "standard market"), it may be problematic as a type of abuse of market dominant position.

Profit pressure refers to the act of a market-dominating enterpriser in the vertically integrated upstream market to exclude competitors from the competition because it is difficult for competitors to effectively compete in the downstream market by reducing the difference between the selling price of raw materials, etc. in the upstream market (hereinafter referred to as "market price") and the selling price of finished goods, etc. in the downstream market.

Where a vertical integrated supplier holding a market dominant position as a supplier of raw materials, etc. operates a finished product business in a lower-class market, the supplier of raw materials, etc. can generally satisfy the terms and conditions favorable to competitors in the lower-class market. On the other hand, a competitor in a lower-class market shall be supplied with raw materials, etc. necessary for the manufacture of finished products by a market dominant enterpriser. Therefore, the structural dependence relationship in which his production costs may directly vary depending on the establishment of wholesale price for raw materials, etc. by

In the structure of such a related market, a market dominant enterpriser may reduce the difference between the wholesale price and the retail price by raising the wholesale price of raw materials, etc., or lowering or lowering the retail price of finished products, or by implementing both methods. In this case, if the wholesale price set by a market dominant enterpriser is higher than the retail price, and the difference between the retail price and the retail price is too small to the extent that the market dominant enterpriser cannot cover the costs of his/her subordinate market, a competitor in the subordinate market that is required to be supplied with raw materials, etc. by the above market dominant enterpriser is unable to effectively compete after appropriating the costs necessary for production of the subordinate market, and if such pressure continues for a certain period, it is likely to be excluded in the market.

The Fair Trade Act was established for the purpose of protecting free competition as well as fair competition (see Article 1 of the Fair Trade Act). In particular, in a market where a market dominant enterprise exists, the original function of competition can be operated properly only when free competition of other market participants is guaranteed.

If the market dominant enterpriser's profit-tension is regulated by considering it as a type of abuse of the market dominant position independently, it is likely to reduce investment inducement or innovation motivation with respect to raw materials, etc. of the upstream market.However, if it is difficult to maintain the basis of fair competition because the market dominant enterpriser's abuse of the market dominant position is likely to unfairly exclude competitors in the downstream market by unfairly lowering profits, it is difficult to view it as a legitimate competition method such as "the so-called" and "the competition based on the result of fair competition."

Therefore, if the act of market dominant enterpriser's profit pressure, which takes place in the form of lowering the retail price of finished products in the downstream market, can be evaluated as a "transaction which might unfairly supply goods or services at a price lower than the normal transaction price and exclude competitors, it is necessary to regulate it by deeming it as an abuse of market dominant position prohibited by Article 3-2 (1)5 of the Fair Trade Act and Article 5 (5) 1 of the Enforcement Decree of the Fair Trade Act.

B. Whether it constitutes an act supplied at a lower price than “ordinary market price” (Defendant’s ground of appeal Nos. 1 and 1 and 2)

(1) The meaning of ordinary transaction price

The first sentence of Article 3-2(1)5 of the Fair Trade Act stipulates that "an abuse of market dominant position by a market dominant enterpriser, which unfairly excludes competitors," and Article 5(5)1 of the Enforcement Decree of the Fair Trade Act provides that "an abuse of market dominant position by a market dominant enterpriser, where the goods or services are supplied at lower prices than ordinary transaction prices or the goods or services are purchased at higher prices than ordinary transaction prices, thereby excluding competitors."

In the past, Article 5(5)1 of the Enforcement Decree of the Fair Trade Act deemed a provision to regulate the "establishment of a malicious price" which refers to an act that may exclude competitors by selling goods or services at a price lower than their own costs. However, since the ordinary transaction price is a kind of "price that is distinguished from the cost," it is obviously contrary to the legal text if it is changed into "cost." This is more clear compared with the act that is clearly contrary to the legal text in the supply of goods or services by a 'unfair salt', which is one type of unfair trade practices under Article 23(1)2 of the Fair Trade Act and Article 36(1) [Attachment Table 1-2] 3(a) of the Enforcement Decree of the Fair Trade Act.

Article 5(5)1 of the Enforcement Decree of the Fair Trade Act specifies “an act of trading in order to unfairly exclude competitors” under the former part of Article 3-2(1)5 of the Monopoly Regulation and Fair Trade Act, which is the mother law provision, and the ordinary transaction price is a tool to determine the act of abuse of exclusion related to the price of a market-dominating enterpriser, which may arise in various types, such as not only the “establishment of a malicious price” but also the “profit pressure”. Therefore, the meaning should be interpreted in line with the meaning, contents, and legislative purpose of the mother law provision.

In the case of ordinary transactions in a market where free and fair competition takes place, the ordinary transaction price means the price generally formed, and more specifically, the price which is generally formed in a normal transaction where there is no abuse of market dominant position by a market dominant enterpriser to unfairly exclude competitors.

The ordinary transaction price can sufficiently understand the meaning and contents of the act subject to regulation through systematic and teleological interpretation of the provisions of the mother law to the extent possible of the language and text as seen above. In addition, since the beneficiary is a market-dominating business entity, it is highly predictability for the act subject to regulation. Even if a market-dominating business entity’s transaction constitutes an act of supply at a level lower than the ordinary transaction price under Article 5(5)1 of the Enforcement Decree of the Fair Trade Act, the illegality of the act can be recognized, but the act of abuse of market dominant position can be established. Therefore, even if considering the fact that the “ordinary transaction price” under Article 5(5)1 of the Enforcement Decree of the Fair Trade Act directly regulates the market-dominating business entity’s price creation, the meaning of the ordinary transaction price can be a form of an administrative disposition, which is a punitive administrative disposition or a penalty

Inasmuch as the Fair Trade Commission bears the burden of proving the legality of the disposition, such as a corrective order, it should prove that the price for specific supply or purchase set by a market dominant enterpriser is lower or higher than the ordinary transaction price prescribed by Article 5(5)1 of the Enforcement Decree of the Fair Trade Act by reasonable means, comprehensively taking into account the type and specific characteristics of the act of abuse of market dominant position, structure of the relevant market, method of price determination, trends in change, quantity and period of supply or purchase, characteristics of the relevant goods or services, etc.

(2) Determination on the instant case

Examining the above legal principles regarding ordinary transaction prices, the Plaintiff’s act in this case constitutes “the act of supplying goods or services at lower prices than ordinary transaction prices.” The reasons are as follows.

The price in the market is not determined solely on the cost. A business-related business entity, which is a competitor in the business-related market where transmission services are to be supplied by the Plaintiff, is the basic method of economic activity of an enterprise to supply corporate-related services at the price calculated by adding labor cost, sales cost, and other cost and adequate profit to service charges corresponding to the purchase cost of essential raw materials.

As seen above, when considering the special trade structure of the instant market where a business operator engaged in corporate domains notifies only a customer who has subscribed to a specific mobile network and does not intend to send messages, the ordinary transaction price of corporate domain services in this case is likely to at least to reflect the purchase cost of transmission services, which is the essential raw material of the Plaintiff's business business business operator, in the corporate domain service market.

According to the reasoning of the lower judgment, the Defendant appears to have determined that the minimum selling price of transmission service computed by assuming the cost, other than the service charges, and adequate profits, at the time of the instant disposition, constituted the ordinary transaction price at the minimum level which can be objectively assumed in the company domain service market.

Meanwhile, according to the reasoning of the lower judgment and the record, three mobile communications business operators, including the Plaintiff, are in excess of the supply of long-term transmission services in the instant transmission service market without any special change. Therefore, it cannot be concluded that the Defendant calculated the minimum transaction price at which each mobile communications business operator is objectively assumed in a way that averages user fees of each mobile communications business operator based on the market share of the mobile communications business operator, not the actual market share or the volume of text messages sent during the period during which the instant act was committed, and that the sales price of the corporate domain service supplied by the Plaintiff is lower than the ordinary

Ultimately, the Plaintiff’s act of this case constitutes “the act of supplying goods at lower prices than the ordinary market price” under Article 5(5)1 of the Enforcement Decree of the Fair Trade Act.

Nevertheless, the court below erred in calculating the ordinary transaction price in the instant disposition on the ground that the meaning of the ordinary transaction price was interpreted differently from the aforementioned legal principles, and on the premise that the Defendant did not examine and consider the actual transaction price, etc. formed in the market, and determined that the instant disposition was unlawful

The lower court erred by exceeding the bounds of the principle of free evaluation of evidence or failing to exhaust all necessary deliberations by misapprehending the legal doctrine on the interpretation and application of “ordinary market price” under Article 5(5)1 of the Enforcement Decree of the Fair Trade Act

C. Whether illegality is recognized (Defendant’s ground of appeal Nos. 2 and 3, and Intervenor’s ground of appeal No. 2-4)

(1) Criteria for determining the illegality of profit-tensioning act

The instant disposition grounds are as follows: (a) the Plaintiff’s act may be supplied at lower prices than unfairly ordinary transaction prices so that competitors may be excluded; (b) the Plaintiff’s act is in violation of Article 3-2(1)5 of the Fair Trade Act and Article 5(5)1 of the Enforcement Decree of the Fair Trade Act; and (c) “the act of supplying goods at lower prices than the ordinary transaction price” may include not only the act of creating a negative price but also the act of lowering profits.

Even though a market dominant enterprise engaged in "the act of supplying goods at a lower price than the ordinary market price", such fact alone does not mean that the relevant transaction does not constitute an abuse of market dominant position, and "the act of supplying goods at a lower price than the ordinary market price" is "the act of supplying goods at a lower price," i.e., concerns to exclude the

When comprehensively taking into account the contents written in the instant disposition, relevant statutes, and the overall process up to the instant disposition, the Defendant rendered the instant disposition on the ground that the instant act satisfies the requirements for illegality on the basis of factual basis that the instant act had a tangible feature as an act of profit pressureing the retail price of corporate domain services lower than the wholesale price of the Plaintiff’s transmission service.

The illegality of “act of trading” under the former part of Article 3-2(1)5 of the Fair Trade Act ought to be interpreted in line with the legislative purpose of promoting competition in a monopoly or monopoly market. Therefore, the illegality may be recognized when a market-dominating enterpriser has an intent or purpose to artificially restrict competition in the market by restricting free competition in the market, i.e., the intent or purpose to artificially affect the market order, and objectively perform an act that is likely to cause the effect of such competition. To do so, it should be proven that the act is likely to cause the effect of restricting competition, such as price increase, output reduction, innovation, or significant decrease of competitive enterprisers, and that there was an intention or purpose to engage in such act. If it has been proved that the above act has been effective, it is likely to cause competition at the time of the act, and its intention or purpose is in fact presumed to have been expressed. Therefore, in light of the process and motive of the act, quantity and characteristics of the act, similarity of the relevant market, and whether the act is likely to cause innovation or abuse in the market (see, 2016).

In light of the concept of profit pressure and the tangible characteristics as an abuse of market dominant position, the following shall be comprehensively taken into account in determining illegality in light of the above standard of determining illegality: “The abuse of position by the means of profit pressure”, like the Plaintiff’s act, supplied goods or services at a price lower than the ordinary transaction price, and thereby excluding competitors” (the former part of Article 3-2(1)5 of the Fair Trade Act and Article 5(5)1 of the Enforcement Decree of the Fair Trade Act).

First of all, it is necessary to consider whether an actor is a market dominant position in the upper reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches a market dominant position, the degree of market dominant power in each market, characteristics of raw materials, etc. of the upper reaches reaches an extent necessary for the production, supply, and sale of finished products that are sold in the lower reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches reaches an extent of such factors, the possibility of comparison with the functional relationship of raw materials, etc. with the finished products, the possibility of substitution, the existence and degree of a legal, institutional, or economic barriers to new or re-entry into the two market, the market share

Then, in principle, the difference between wholesale prices and retail prices set by a market dominant business entity and the costs of a market dominant business entity shall be based on the costs of the competitor in exceptional cases. Furthermore, considering the continuous period of conduct, characteristics of finished products subject to the transaction in question, the scale of transaction in question or the ratio of sales amount, specific market situation at the time of transaction, etc., if a market dominant business entity trades at the price concerned at the price, it is necessary to examine whether there is a concern that the market dominant business entity might be excluded from the competition due to the increase in costs of the competitor, etc., whether there is a concern that the market dominant business entity might have obstructed or obstructed access to or expansion of the market by the market dominant business entity because it is difficult for the market-dominating business entity to normally conduct business at the price, and whether there is a risk that the market-dominating business entity might cause harm to the

The price is the most basic means of competition in the market economy system and free competition in the market should be generally protected (see Supreme Court Decision 2013Du14726, Jan. 31, 2019). If a market-dominating enterprise, which is vertically integrated, lowers the retail price of finished products in the lower market, it is not easy to distinguish whether it constitutes a legitimate means of competition or to exclude competitors through profit pressure.

If profit-saving is performed in a way that lowers the retail price of finished products in the lower market, it is possible to reduce the final consumer price by reducing the cost of the transaction partner. Therefore, it is also necessary to consider the effect of increasing consumer welfare that may arise in the short term when determining the illegality.

The possibility of excluding competitors by the abuse of market dominant position is derived from the structural characteristics of the relevant market connected with the upper and lower market as above, and the difference between the market price and the retail price based on the market dominant position. Therefore, the illegality need not be determined on the premise that it may arise in the upper and lower market, respectively.

(2) Determination on the instant case

(A) According to the reasoning of the lower judgment, the following circumstances are revealed.

The Plaintiff’s first business operator in the corporate domain service market and the aggregate of the market share of the third business operators, including the Plaintiff, in the corporate domain service market in 2013 reaches about 79%. The Plaintiff’s market share in the transmission service market that has the nature of the essential raw materials of corporate domain services is about 20%, and the aggregate of the share of three mobile network operators, including the Plaintiff and the case, exceeds 10%.

c. The ratio of expenses related to the use of transmission services, which are raw materials, to the sales price of corporate domain services, is reasonable.

The plaintiff and the case are superior to the supply conditions of raw materials in the relevant market, which are related markets, and there are existing existing competitors who have already been engaged in the company domain services market for a considerable period of time and have related technology and human resources. The plaintiff has considerable advantages in terms of financial power, economic scale, market share, supply ratio of raw materials, etc. compared to major competitors of the company domain services market except for the case.

During the period of the instant act, the market share of the Plaintiff with the radio communication network and the Kti companies-type service market has increased, while despite the expansion of the company-based service market, the market share of the companies-based business operators, including supplementary intervenors, who did not hold the radio communication network, tend to decrease.

(B) Examining the facts as seen in the above 1.1 and the circumstances as seen in the above 3.c. (2)(a) in light of the legal principles as seen in the above 3.C. (1), there is room to view the instant act as an act of profit pressure, which can be seen as an act of offering goods at lower prices than the ordinary transaction price, and thus, is likely to exclude competitors. The reasons are as follows.

Even if the reasoning of the judgment below is based on the reasons of the judgment of the court below, the Plaintiff is in a market dominant position in both the transmission service market and the company domain service market. The Plaintiff can be deemed to have a legal and institutional entry barriers in the transmission service market at the time of the instant disposition as a telecommunications business operator for a period under the Electric Communications Act, and a factual and economic entry barriers in the company domain service market.

② If a market-dominating enterpriser, as the Plaintiff’s act, sells corporate domain services below the minimum sales rate of transmission services, the price competition itself is difficult in the corporate domain service market because it is difficult for a competitor, who does not have an independent radio communication network, to properly supply corporate domain services without regard to losses, to assume that a competitor, who purchased such transmission services at the minimum sales rate of transmission services.

In addition, in case where a market-dominating enterpriser, which has vertical integration with the radio communication network in the upstream market like the Plaintiff, is higher than the retail price of finished products in the upstream market, and the retail price and wholesale price are negative (-) by establishing a market-dominating enterpriser higher than the retail price of finished products in the downstream market, competitive enterprisers in the ordinary company-based service market who do not own an independent radio communication network may be deemed to be highly likely to be excluded from competition by making it difficult for them to effectively compete in the above price terms and conditions in the company-based service market, unless there are special circumstances. To make this decision, the difference between wholesale price and retail price is not to be analyzed separately from the case of a transferee. Even if competitors in the company-level service market are equally or even more efficient than the Plaintiff, the results will not be changed.

If the difference between the retail price and the wholesale price is negative (-), the plaintiff, who is a business entity that has a dominant position in both the upper and the lower market, can sufficiently expect the possibility that the competitor will be excluded from the business M&C market due to the difference between the wholesale price and the retail price. Therefore, it can be presumed that the intention and purpose of restricting competition itself is to be the act itself.

③ The cost level that Plaintiff’s competitors face in the corporate domain services market is merely due to the structure and characteristics of the relevant market where there exist vertical integrated enterprises, such as the Plaintiff or case holding a mobile communications network. The original corporate domain services are the first technology developed by supplementary participants in the early 2000s and have started to be formed by the market. In light of these circumstances, the corporate domain services that did not hold a radio communications network cannot be deemed as “non-effective competitors in the supply of corporate domain services.” Thus, regulating Plaintiff’s act cannot be said to constitute “non-effective competitors in the supply of corporate domain services.”

Even if the price of corporate domain services has lowered and the market has grown during the period of the Plaintiff’s act in this case, it is difficult to conclude that the consumer welfare increase effect that may arise in the short-term act in this case can be offset to the anti-competitive effect of the act in this case’s case’s act in mid- and long-term manner by comparing the concerns of price decline or service quality decline, etc., which may occur by excluding the competitor in the company domain service market, with the excluding the valuable real or potential competitors in the market, the diversity of diversity has decreased due to the decrease of diversity and the concerns that the opportunity of the other party to

(C) Therefore, the lower court should further examine whether the illegality of the instant disposition is recognized as an act of profit pressureing by a market-dominating enterpriser, which set the retail price at a lower level than the wholesale price, of which the Plaintiff’s act was vertically integrated, in accordance with the legal doctrine as to the criteria for determining the illegality of the act of profit pressureing.

Nevertheless, the lower court determined that the instant act cannot be deemed as an act of supplying lower price than the ordinary transaction price on the premise of a different legal doctrine, and determined that the illegality of the instant act was not recognized.

The court below erred by misapprehending the legal principles on the illegality of the requirements for establishing a market dominant position abuse under the former part of Article 3-2(1)5 of the Fair Trade Act and Article 5(5)1 of the Enforcement Decree of the Fair Trade Act, and failing to exhaust all necessary deliberations. The ground of appeal assigning

4. Conclusion

The Defendant and the Intervenor’s appeal are with merit, and all of them are 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 Ansan-chul

Justices Kim Jae-hyung

Justices Noh Jeong-hee