Hyundai Elevator Co., Ltd. (Attorney Park Jong-sung et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Spring, Attorneys Yang Jong-young et al., Counsel for the defendant-appellant)

June 18, 2009

1. The Defendant’s order of payment of each penalty surcharge in attached Form 1, which was issued by the Decision No. 2008-268 on September 25, 2008 against the Plaintiff, and each disposition in attached Form 2, which was issued by the Decision No. 2008-269 on September 24, 2008, shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. Status of the plaintiff, etc.

원고와 오티스엘리베이터 유한회사, 티센크루프엘리베이터 코리아 주식회사, 주식회사 디와이홀딩스, 한국미쓰비시엘리베이터 주식회사, 주식회사 쉰들러엘리베이터, 후지테크코리아 주식회사(이하 법인을 표시하는 명칭과 상호 중 엘리베이터는 생략한다)는 엘리베이터의 제작, 설치, 판매, 관리를 업으로 하는 사업자들로서 독점규제 및 공정거래에 관한 법률(이하 공정거래법이라 한다) 제2조 제1호 의 규정에 의한 사업자에 해당된다.

B. Collaborative acts by plaintiffs et al.

(1) Collaborative acts on the contract for purchase of elevators ordered by five private and government demand agencies such as the plaintiff, etc. (hereinafter referred to as "private and public sectors").

The plaintiff, Ors, Esck Holdings, Dyp, and Korea Unmpier City (hereinafter "five companies, including the plaintiff, etc.") agreed from April 1996 to November 24, 2005 to distribute the quantity of domestic elevator construction works ordered by large public-private partnership sectors, such as each company's conference room, elevator association, etc. at a certain ratio, and decided specifically in the above elevator construction tender in advance by the method of submitting an estimated price higher than the successful bid price to the company. The defendant determined that it constitutes an unfair collaborative act under Article 19 (1) of the Fair Trade Act (hereinafter "the first collaborative act in this case").

(2) Collaborative acts on contracts for purchase of elevators ordered by seven Korea National Housing Corporation, including the plaintiff, etc. (hereinafter referred to as the "main industrial sector").

원고, 오티스, 티센크루프, 디와이홀딩스, 한국미쓰비시, 쉰들러, 후지테크코리아(이하 원고 등 7개사라 한다)는 2001년부터 2005. 11. 24.까지 각 사 회의실, 음식점 등에서 모임을 갖고 주공부문에서의 엘리베이터 공사물량을 순번제 방식으로 배분하기로 합의한 다음 입찰이 실시되면 낙찰예정회사가 다른 회사들에게 응찰가격을 통보해 주고 다른 회사들은 그 가격에 따라 입찰에 참가하는 방법으로 서로 협조함으로써 그 합의를 실행하였는바, 피고는 위 행위 역시 공정거래법 제19조 제1항 의 부당한 공동행위에 해당한다고 판단하였다(이하 이 사건 제2공동행위라 한다).

C. Disposition of imposition of the defendant on the first collaborative act of this case

On September 25, 2008, the defendant made a decision as to the first collaborative act of this case by five companies including the plaintiff (if it is clearly divided into the parties to the second collaborative act of this case, the plaintiff et al.) in attached Form 1 as to the first collaborative act of this case by 2008-268. The defendant imposed a penalty surcharge of 13,507 million won (hereinafter the imposition of penalty surcharge of this case as to the plaintiff et al.) calculated through the following process.

(1) Determination of whether to impose a penalty surcharge

Since the violation of the law by the plaintiff et al., which forms the share of at least 80% in the domestic elevator purchase contract market, is recognized to be considerable in the degree of competition-restricting effect and ripple effect on the market, the penalty shall be imposed by applying the provisions of Articles 22 and 55-3 of the former Fair Trade Act (amended by Act No. 7315 of Dec. 31, 2004), Article 4 of the Addenda of the Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 18768 of Mar. 31, 2005), Articles 9 and 61 of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 18768 of Apr. 1, 2005), Article 205-3 of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 18768 of Apr. 1, 200), and Article 4 of the former Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 2005-31).

(2) the calculation of relevant sales and basic charges;

(A) Relevant sales

The sales amount of the elevator, escalator, and ice workshop in the private-public sector during the period of the violation of the law by the plaintiff, etc. shall be calculated as the relevant sales amount.

(B) Period of the violation

On April 196, 1996, Ors shall be deemed to be the time of the violation: Provided, That Ors shall be deemed to be the time of 202, which was agreed with Ors on December 29, 1999, when there was a contract for the transfer of business with ELSA Co., Ltd., and the time of 202, when it was agreed with SK's pro rata.

Meanwhile, at the time of the Defendant’s investigation into elevators on November 24, 2005, the first collaborative act of this case was practically terminated on the ground that the Plaintiff et al. applied for reduction and exemption.

However, in the case of Daehan Holdings, after transferring the elevator business division on October 1, 2003 in accordance with a contract with E.C. (former Heavy Industries) and the acquisition of assets, the elevator business division was no longer engaged in the elevator business. Therefore, the termination date of October 1, 2003 shall be deemed as the termination date.

(C) Calculation of basic penalty surcharges

Considering the fact that the plaintiff et al. was aware of the illegality of the collaborative act No. 1 in this case, the act continues for a long time in the status of recognizing such illegality, the market dominance power of the plaintiff et al., and the overall impact of the national economy is not considerable, the collaborative act of this case by the plaintiff et al. constitutes a very serious violation. Accordingly, the level of imposition standard rate of 3.5% and 5.0% shall be applied to the plaintiff et al. according to the provisions of subparagraph 1 (c) of the former Public Notice IV, but the standard rate of imposition shall be 3.5% in consideration of the fact that most of the violation was enforced before the former Public Notice IV, but the basic penalty surcharge calculated accordingly is as follows.

Table 1> Basic penalty surcharge, including the Plaintiff

(unit:,000 won)

In the name of the voting company listed in the main sentence of this section, Orsclub Holdings ( Note 3) The imposition rate of 3.5% 3.5% per 3.5% per 3.5% per 3.5% per 3.5% per 3.5% per 3.5% per 3.5% per 3.5% per annum 26,832, 7532, 7538, 396, 396, 0431, 2631, 46, 261, 261, 78, 700

Note 3) Dalone Holdings

Note 4) 36,048,585

(3) Determination of penalty surcharges

The basic penalty surcharge shall be reduced by 10% as the Plaintiff, Eths, Eths, Ethmp, and Korea-U.S.A. has discontinued and voluntarily corrected the violation, and the basic penalty surcharge shall be reduced by 50%, and Ethspher shall be reduced by 20% in consideration of the fact that the net income for the last two years has been continuously distributed for the net income for the last two years. Divers shall be reduced by 50% in the calculation of the penalty surcharge, taking into account the fact that the remaining corporation that transferred the elevator business division on October 1, 2003 as it was difficult to directly make an application for reduction due to its failure to conduct

(4) Reduction by self-declaration, etc.

(A) In the event that the Defendant did not secure sufficient evidence for the first collaborative act of this case, e.g., the e., the Defendant first provided evidence necessary to prove it, and cooperate until the investigation is completed. Since the first collaborative act of this case is not led or forced to other enterprisers, it constitutes an investigative partner under Article 22-2(1)2 of the former Enforcement Decree of the Fair Trade Act, it is exempted from penalty surcharges pursuant to Article 35(2)2 of the former Enforcement Decree of the Fair Trade Act.

(B) After the Defendant’s initiation of an investigation, it provided evidence necessary to prove the facts of the first collaborative act of this case to the second, and cooperate until the investigation is completed. Since the first collaborative act of this case is not led or forced to other enterprisers, it constitutes an investigative partner under Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act, the penalty surcharge shall be mitigated pursuant to Article 35(2)3 of the former Enforcement Decree of the Fair Trade Act, but it shall be mitigated by 65% of the penalty surcharge, considering the first provision of evidence of the unfair collaborative act arising in the product market other than the first collaborative act of this case before the investigation is commenced.

(C) The Plaintiff contributed to enhancing the admissibility of evidence by supporting evidence and statements submitted by 2 companies that filed an application for reduction or exemption prior to the completion of the investigation. Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act provides that the Plaintiff constitutes an investigative partner under Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act because it did not lead the first collaborative act in this case or force other companies. Considering that materials proving unfair collaborative acts other than the first collaborative act in this case were provided, 35% of the penalty surcharges imposed under Article 35(2)

(5) Final Imposition Penalties

Pursuant to Article 22 of the former Fair Trade Act and Article 9 of the former Enforcement Decree of the Fair Trade Act, the final penalty surcharge shall be the amount not exceeding the amount (legal limit) multiplied by 5/100 of the average sales for the three business years immediately preceding the end of the violation of the Act.

The final penalty surcharge imposed on the plaintiff et al, taking into account all these points, is as follows (the penalty surcharge imposed on the plaintiff is the statutory limit).

Remark 2> Final Imposition Penalties

(unit: 00,000 won)

A penalty surcharge imposed in the name of the voting company Oral Holdings D, Inc., the Plaintiff of the voting company contained in the main sentence, 15,413 9,228 18,507 1,35

D. Disposition of imposition of penalty surcharge by the defendant on the second collaborative act of this case

On September 24, 2008, the defendant made a decision as to the second collaborative act of this case by 2008-269 against the plaintiff et al., 7 companies including the plaintiff et al. (hereinafter referred to as the "first collaborative act of this case"). On September 24, 2008, the defendant issued a disposition of imposition of penalty surcharge of KRW 179 million (hereinafter referred to as the "disposition of imposition of penalty surcharge of this case") calculated through the following process.

(1) Determination of whether to levy penalty surcharges

Since the violation of the law in this case by the plaintiff et al. who accounts for not less than 90% of the market share in the main portion of the public sector is highly recognized to have the effect of restricting competition and the ripple effect on the relevant market, the penalty shall be imposed in accordance with Articles 22 and 55-3 of the former Fair Trade Act, Article 61 of the former Enforcement Decree of the Fair Trade Act, and Article 3.2.0 (1) of the former Notification

(2) the calculation of relevant sales and basic charges;

(A) Relevant sales

The amount of sales of elevators, escalators, and ice workshops in the main and public sector during the period of violation of the law by the plaintiff, etc. shall be calculated as related sales.

(B) Period of the violation

원고, 오티스, 티센크루프, 디와이홀딩스에 대하여는 2001. 1.을 법 위반행위의 시기로 보고, 쉰들러는 2002. 1.을, 한국미쓰비시와 후지테크는 2005. 8. 31.부터 합의에 참가하였으므로, 그 때를 위반행위의 시기로 본다.

At the time of investigating the elevator companies on November 24, 2005, the second collaborative act of this case was practically terminated on the ground that the plaintiff et al. applied for reduction and exemption.

However, DNA trading is deemed as the termination date of October 1, 2003, which is the date of the transfer of the above business division.

(C) Calculation of basic penalty surcharges

Considering the fact that the plaintiff et al. knew of the illegality of the second collaborative act of this case, the act continues for a long time in the status of recognizing such illegality, and the market power of the plaintiff et al., the act of this case constitutes a very serious violation.

따라서 원고, 오티스, 티센크루프, 쉰들러에 대해여는 구 고시 Ⅳ. 1. 다. (1) (가) 규정에 의하여 3.5%~5.%의 부과기준율 수준을 적용하기로 하되, 이 사건 법 위반행위의 대부분이 구 고시가 시행되기 이전에 이루어진 점 등을 고려하여 부과기준율은 3.5%를 적용한다. 이에 따라 산정한 기본과징금은 다음 표와 같다.

Table 3: Basic penalty surcharge for the Plaintiff, etc.

(unit:,000 won)

본문내 포함된 표 회사명 오티스 티센크루프 디와이홀딩스(주7) 원고 쉰들러 관련매출액 84,255,000 68,311,274 4,080,571 46,803,014 21,253,000 부과율 3.5% 3.5% 3% 3.5% 3.5% 기본과징금 2,948,925 2,390,894 122,417 1,638,105 743,855

Note 7) Dalone Holdings

(3) Determination of penalty surcharges

원고, 오티스, 티센크루프, 쉰들러는 경우 위반행위를 중단하고 자진 시정하였으므로 기본과징금의 10%를 각각 감경하고, 티센크루프의 경우 최근 2년간 당기 순이익이 연속적자인 점을 고려하여 20%를 추가로 감경한다.

In the case of DNA crowdfunding, 50% of the penalty surcharge shall be reduced when calculating the penalty surcharge, taking into account the fact that it was difficult to directly apply for reduction and exemption because it was no longer a corporation that transfers elevator business as of October 1, 2003 as a remaining corporation that did not operate the elevator business.

(4) Reduction by self-declaration, etc.

(A) After the Defendant’s investigation on the second collaborative act of this case commenced, e.g., submitting and cooperating with the investigation, e., the Defendant provided evidence necessary to prove it, and cooperate until the investigation is completed. Since e.g., the Plaintiff’s leading of the second collaborative act of this case or forced other enterprisers to engage in the second collaborative act of this case, it constitutes an investigator for investigation under Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act, a penalty surcharge should be mitigated pursuant to Article 35(2)3 of the former Enforcement Decree of the Fair Trade Act; however, e.g., the Defendant’s first provision of evidentiary materials to prove the second collaborative act of this case, the amount of sales related to the second collaborative act of this case exceeds that of the pertinent collaborative act of this case, e.g.

(B) After the Defendant’s initiation of the investigation, Lao provided evidence necessary to prove the facts of the 2nd collaborative act of this case to the third party until the investigation is completed. Since it constitutes an investigation partner under Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act because it led the 2nd collaborative act of this case or forced another enterpriser to engage in the 2nd collaborative act of this case, the penalty surcharge shall be mitigated pursuant to Article 35(2)3 of the former Enforcement Decree of the Fair Trade Act, but it shall be mitigated by 45% of the penalty surcharge imposed, considering that it first provided evidence proving the 2nd collaborative act of this case other than

(C) The Plaintiff, a person who, after the Defendant’s commencement of the investigation, submitted the fourth application for reduction or exemption and cooperates with the investigation, provided evidence necessary to prove the collaborative act of this case No. 2, and cooperates until the investigation is completed. Since the Plaintiff’s leading of the collaborative act of this case or forced other enterprisers to engage in the collaborative act of this case, it constitutes an investigative partner under Article 22-2(1)2 of the former Fair Trade Act, 20% of the penalty surcharge imposed under Article 35(2)3 of the former Enforcement Decree

(5) Final Imposition Penalties

The final penalty surcharge imposed on the plaintiff et al. in consideration of these points shall be as follows:

E.M. 4. Final Imposition Charges

(unit: million won)

본문내 포함된 표 회사명 오티스 디와이홀딩스 원고 쉰들러 최종 부과과징금 1,459 61 1,179 669

[Judgment of the court below] The ground for recognition is without merit, Gap evidence 1-1 and 2, and the purport of the whole pleadings

2. The plaintiff's assertion

The plaintiff asserts that each of the penalty surcharges of this case is unlawful for the following reasons.

A. An error in the order of exemption from voluntary report as to the penalty surcharge No. 1 of this case

In calculating the penalty surcharge of this case against the plaintiff, the defendant should reduce or exempt the penalty surcharge calculated within the scope not exceeding the statutory limit under Article 22 of the former Fair Trade Act, but in violation of this provision, the defendant first made the reduction or exemption for the reporter, etc. under Article 22-2 (1) 1 of the former Fair Trade Act, and made the amount to exceed the statutory limit, and thus, limited it to the statutory limit.

(b) deviation from and abuse of discretionary power in the calculation process of penalties;

(1) Although the Plaintiff voluntarily reported the unfair collaborative act in the elevator replacement market in relation to the investigation of each of the instant collaborative acts, unlike other enterprisers, the Plaintiff did not grant reduction or exemption of penalty surcharges pursuant to the system for reporting and reducing other collaborative acts. Although there were differences in the order of voluntary reporting in each of the instant collaborative acts, the Plaintiff’s active investigation and cooperation and the amount of dividends based on each of the instant collaborative acts, despite the difference in the amount of dividends based on each of the instant collaborative acts, 30% and the main portion of the instant collaborative acts were 25% and the main portion was 30% and the main portion of the instant collaborative acts were 25%. Although the Plaintiff’s voluntary reporting and reporting on unfair collaborative acts in the elevator replacement market was merely a subsequent owner of the elevator market, it was deviating from and abusing discretion by violating the principle of equity and proportionality.

(2) In light of the fact that the motive of each of the instant collaborative acts does not constitute a very serious violation to prevent blood competition rather than unjust enrichment, and that the Plaintiff’s market share increases after the completion of each of the instant collaborative acts, the Plaintiff may have suffered damage rather than that of each of the instant collaborative acts, the penalty surcharges of the instant case are excessively unreasonable.

3. Related statutes;

Attached Form 3 shall be as listed in attached Table 3.

4. Whether the disposition is lawful.

A. Whether the order of exemption from voluntary report as to the penalty surcharge No. 1 of this case is erroneous

In calculating the penalty surcharge 1 of this case against the plaintiff, the defendant first applied the reduction or exemption of the voluntary declaration, and as the penalty surcharge exceeds the statutory limit, the penalty surcharge was imposed in accordance with the statutory limit.

As to this, the defendant asserts that Article 22-2 of the former Monopoly Regulation and Fair Trade Act only provides the basis for voluntary declaration reduction and exemption, and that the order of application is not stipulated by the Fair Trade Act, and that the phrase "the penalty surcharge under the provisions of Article 22 (Penalty Surcharge)" in the interpretation of the above provision is merely an expression to specify "the penalty surcharge against the unfair collaborative act", and that the defendant's imposition of the first penalty surcharge in this case is legitimate as it

On the other hand, Article 22-2 (1) of the former Fair Trade Act provides that "the penalty surcharge under Article 22 (Penalty Surcharge) may be mitigated or exempted," and the interpretation of Article 22-2 (1) of the former Fair Trade Act provides that "the penalty surcharge under Article 22 (Penalty Surcharge) may be reduced or exempted again within the statutory limit under Article 22 (a) shall be interpreted. If the result of mitigation of the penalty surcharge for a reporter exceeds the statutory limit, the same penalty surcharge shall be imposed if the report was filed and the purpose of the system for the reporter's reduction and exemption is excluded if the report is not so, and it does not clearly provide for the following matters: (a) the public notice on the detailed criteria for the imposition of the penalty surcharge by the defendant does not provide for the reduction of the penalty surcharge under the statutory limit after voluntary reduction and exemption; and (b) the order of mitigation by prescribing that the voluntary reporter shall be applied after the revision of the previous public notice on December 31, 2007; (c) in light of the above, it is reasonable to apply the penalty surcharge imposed by the defendant on a different premise.

B. Whether the discretion in the calculation process of penalty surcharges is deviates or abused

(1) Whether other collaborative acts are reported or exempted

In calculating the first penalty surcharge of this case, the Defendant exempted the penalty surcharge in consideration of the fact that the Defendant is the first reporter, and reduced the penalty surcharge in consideration of the fact that the second reporter is the second reporter and the first reporter of the second reporter of the unfair collaborative act generated in the other product market. The Plaintiff reduced the penalty surcharge in consideration of the fact that the Plaintiff is the first reporter of the investigation partner and the first reporter of the other unfair collaborative act. In addition, in calculating the second penalty surcharge of this case, the Defendant exempted the penalty surcharge in consideration of the fact that the second reporter is the second reporter, the second reporter in the calculation of the second penalty surcharge of this case, and the fact that the relevant sales are the first reporter of the other unfair collaborative act in the other market. The penalty surcharge was reduced by 45% in consideration of the fact that the Plaintiff is the first reporter of the third report of the third report, and the first reporter of the other unfair collaborative act. The Plaintiff is the first reporter of the fourth report of this case.

On the other hand, the defendant asserts that the other collaborative act reporting and exemption system was introduced first at the time of amendment of the Enforcement Decree of the Fair Trade Act on March 31, 2005, and that the other collaborative act reporting and exemption was not made in calculating the penalty surcharge of this case pursuant to Article 4 of the Addenda of the Enforcement Decree of the Fair Trade Act.

According to the above, in calculating each penalty surcharge of this case, the defendant should be deemed to have applied the reduction of or exemption from reporting other collaborative acts, and in each written resolution of this case, it is supported not only by the immediately applying the public notice of the operation of the reduction or exemption system but also by the fact that the defendant has reported other collaborative acts in calculating each penalty surcharge of this case at least in the calculation of each penalty surcharge of this case, by comprehensively considering the fact that the "certificate of status of the reporter, etc. of other collaborative acts" to verify the status of the investigator for investigation under Article 16 (2) of the Public Notice of Operation of the Reduction or Exemption System is issued

Therefore, even though the Plaintiff reported other unfair collaborative acts in the process of investigating each of the instant collaborative acts (no dispute is raised between the parties regarding the fact that the Plaintiff reported the unfair collaborative act in the elevator replacement market in the first order), it is against the principle of equity or proportionality to exempt the Plaintiff from reporting other collaborative acts in calculating the second penalty surcharge in the instant case.

(2) Whether the penalty surcharge is excessively excessive

Considering that the contents, degree, period, and ripple effect of each collaborative act of this case and the legal nature of the imposition of penalty surcharges are discretionary acts, considering the circumstances asserted by the Plaintiff, it is not deemed that the Defendant’s imposition of penalty surcharges of this case beyond the aforementioned illegal grounds does not deviate from and abuse of discretion. Accordingly, the Plaintiff’s assertion on this issue is rejected.

5. Conclusion

Therefore, the Plaintiff’s revocation of the imposition of each of the penalty surcharges of this case is decided as per Disposition.

[Attachment 1 and 2]

Judges Lee In-bok (Presiding Judge) Lee In-bok Kim

1) The former Public Notice is enforced from April 1, 2005 pursuant to Article 1 of the Addenda, but Article 2 of the Addenda of the former Public Notice is subject to the previous Public Notice in cases where a penalty surcharge is imposed on an act for which the state of violation continues before the enforcement of the former Public Notice or even after the enforcement of the former Public Notice.

2) Under the former Rules on Imposition of Penalty Surcharges, which are the previous provisions, the upper limit of the standard rate of penalty surcharges for unfair collaborative acts was 3%.

3) In the case of DNA crowdfunding, the base rate for imposing penalty surcharges shall be 3% on the basis of the former Rules on Imposition of Penalty Surcharges.

Note 4) As for the collusion cases made up by September 2003, the disposal period is limited to and excluded from the relevant sales.

5) The Defendant stated in the written resolution that the Defendant comprehensively considered the fact that it received from the Defendant the “written confirmation of the status of the reporter, etc. of other collaborative acts” to confirm that the agent is in the status of the investigator and partner under Article 16(2) of the Operational Notice of the Reduction and Exemption System (No. 2005-7 of the Fair Trade Commission Notice No. 205-7 of April 1, 2005; hereinafter referred to as the “Operation Notice of the Reduction and Exemption System”).

6) The average sales for the three-year average sales are the average sales for the three-year years immediately preceding the end of the commission of the act (from 2002 to 2004) (Provided, That DNA trading from 200 to 2002)

Note 7) In the case of crowdfunding, the base rate for imposing penalty surcharges shall be 3% on the basis of the former Rules on Imposition of Penalty Surcharges.

8) On December 29, 2005, the Defendant confirmed that Escurf is in the position of an investigator (second-order) under Article 22-2 of the former Fair Trade Act and Article 35(1)4 of the Enforcement Decree.

9) In full view of the fact that the Defendant received from the Defendant a certificate of status of the reporter, etc. of other collaborative acts, the Defendant stated the purport to exempt the penalty surcharge in the written resolution to the effect that the Defendant exempted the penalty surcharge, by comprehensively taking into account the fact that he/she received from the Defendant the “certificate of status of the reporter, etc. of other collaborative acts” confirming that he/she