In a case where the Fair Trade Commission ordered Gap company to pay penalty surcharges on the ground that Gap company et al. conducted an unfair collaborative act under Article 19 (1) 1 of the Monopoly Regulation and Fair Trade Act by jointly preparing a base price list and reaching an agreement on the price discount rate, the case affirming the judgment below holding that Gap company's unfair collaborative act terminated on February 2, 2007, which applied the "public notice on the detailed criteria, etc. for imposition of penalty surcharges" as of July 13, 2005, was unlawful.

Articles 19(1)1, and 22 of the Monopoly Regulation and Fair Trade Act

Han Cable Co., Ltd. (Law Firm Sejong, Attorneys Yil-il et al., Counsel for the defendant-appellant)

Fair Trade Commission

Seoul High Court Decision 2011Nu29009 decided February 15, 2012

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. In full view of the provisions of Articles 6, 17, 22, 24-2, 31-2, and 34-2 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”), the imposition of a penalty surcharge against a violator of the law by the Fair Trade Commission shall be deemed to constitute an act of discretion. However, if there are grounds, such as misunderstanding of the facts constituting the basis for the imposition of a penalty surcharge or violating the principle of proportionality and equality, etc. in exercising such discretion, it is illegal as a deviation or abuse of discretionary power (see, e.g., Supreme Court Decisions 200Du6121, May 28, 2002; 2006Du675, Nov. 13, 2008).

2. A. Based on the evidence adopted, the lower court acknowledged that the Defendant issued an order to pay a penalty surcharge against the Plaintiff on the ground that the Plaintiff jointly prepared price discount table with LSS Co., Ltd., Gaon Cable Co., Ltd., Gaon Cable Co., Ltd., members cable Co., Ltd, KONS Korea Co., Ltd, and KONS Korea Co., Ltd., and agreed on price discount rate, and that the Defendant did not comply with the previous public notice of the Fair Trade Commission’s order to pay a penalty surcharge for the Plaintiff’s unfair collaborative act of this case terminated on December 2, 2007, and the Defendant issued an order to pay a penalty surcharge for the Plaintiff’s unfair collaborative act of this case as of December 31, 2007 (hereinafter “public notice of the penalty surcharge in 2007”) without complying with the previous public notice of the Fair Trade Commission’s imposition of a penalty surcharge in 200-15% of the total sales amount (hereinafter “public notice of the penalty surcharge in 2005%”).

Based on the facts acknowledged as above, the lower court determined that, in full view of the circumstances as indicated in its reasoning, the Defendant’s ex officio applied a penalty surcharge notice under Article 61 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, which was based on ① the Defendant’s preparing a penalty surcharge under Article 61 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, and calculated and imposed a penalty surcharge for an individual case accordingly; ② the application of a penalty surcharge notice similar to this case was at the time of the termination of an unfair collaborative act as of December 5, 2007; ③ the Defendant’s ex post facto provision of a penalty surcharge under 2004, which was below the heart’s 208-79 decision on March 5, 2008; ③ the Defendant’s ex post facto provision of the Fair Trade Act which raised the upper limit of the penalty surcharge to the extent of 10% of the sales related to the relevant sales, there were no reasonable grounds for the enforcement Decree of the Fair Trade Act’s discretionary order under the existing principle and the Enforcement Decree of the Fair Trade Act.

B. Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the above determination by the court below is just and acceptable. In so doing, it did not err by misapprehending the legal principles on the legality of the order to pay penalty surcharges, the legality of administration, the principle of legal superiority, and the principle of equality.

3. Therefore, the appeal is dismissed, 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 on the bench.

Justices Park Poe-young (Presiding Justice)