The meaning of "a sales of the relevant goods during the period of the violation," which is the basis for imposing penalty surcharges on unfair collaborative acts in the goods financed by used cars.

[1] Articles 19 and 22 of the Monopoly Regulation and Fair Trade Act, Articles 9 and 61(1) [Attachment 6] of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act

Samsung Card Co., Ltd., a lawsuit taking over the merged Samsung Capital Co., Ltd. and two others (Law Firm Rate, Attorneys Kim Tae-hwan et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Lee Jong-soo, Counsel for the defendant-appellant)

Seoul High Court Decision 2001Nu2579 delivered on June 27, 2002

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

1. Regarding ground of appeal No. 1

Article 19(5) of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Act") provides that where two or more enterprisers are committing an act falling under any of the subparagraphs of paragraph (1) practically restricting competition in a particular business area, such an agreement shall be presumed to have been reached even if there is no express agreement between them to engage in such act, and it is not a penal provision, and there is no provision that criminal punishment shall be imposed on the part of violating Article 19(5) of the Act, and therefore, the provision of Article 19(5) of the Act does not contravene the principle of no punishment or the presumption of innocence.

In addition, in order to prove the establishment of an unfair collaborative act as provided in Article 19(1) of the Act, the Fair Trade Commission must prove that the act was done under the explicit or implied agreement of the enterpriser. In order to ensure the effectiveness of the regulation of the unfair collaborative act, considering the nature of the unfair collaborative act closely conducted, there is a presumption provision under Article 19(5) of the Act (see Supreme Court Decision 99Du6514, 6521, Mar. 15, 2002). The enterpriser who is presumed to have agreed under Article 19(5) of the Act is opposed to the "existence of the agreement". In other words, the agreement is not based on the agreement, but on the basis that it proves the fact that the act was the result of independent business judgment or that the above act was not a collaborative act under the agreement, and it can not be presumed that the above provision violates the enterpriser's freedom to pay penalty surcharge (see Supreme Court Decision 201Du1239, Feb. 28, 2003).

The ground of appeal on this part is without merit.

2. Regarding ground of appeal No. 2

The relevant market, which is defined as the premise of the determination of the unfair collaborative act prescribed by the Act, shall be determined by comprehensively considering the similarity of functions and utility of the goods subject to the transaction, recognition of the substitutability of buyers, and the form of management decision related thereto.

The court below rejected Plaintiff Samsung Capital Co., Ltd. (hereinafter “Plaintiff Samsung Capital”) about 30.9%, Plaintiff Hyundai Card Co., Ltd. (hereinafter “Plaintiff Samsung Capital”) about 43.1%, Plaintiff Hyundai Capital Co., Ltd. (hereinafter “Plaintiff Hyundai Capital”) about 10.8%, and Plaintiff Hyundai Capital Co., Ltd. (hereinafter “Plaintiff Hyundai Capital”)’s market share in the used cars market was 84.8%. The court below rejected Plaintiff Samsung Capital Co., Ltd.’s share in the used cars market was partly different from the Plaintiff’s used cars, but it can be viewed that Plaintiff Samsung Capital Co., Ltd. (hereinafter “Plaintiff Samsung Capital”)’s share in the used cars market was 9% more than the average interest rate of 19%, including the Plaintiff’s non-guaranteed loan limit or financial services. The court below rejected Plaintiff Samsung Capital Co., Ltd.’s share in the used cars market was 98% less than the average interest rate of 19%, which was 9% less than the average interest rate of 198%.

Examining the relevant evidence in light of the records in accordance with the above legal principles, the above fact-finding and determination by the court below is just and acceptable, and there is no violation of the rules of evidence, omission of judgment, or incomplete hearing on competition restriction in the relevant market, as alleged in the grounds of appeal.

3. As to the third ground for appeal

According to Article 19(5) of the Act, in determining circumstances in which enterprisers who are presumed to have agreed to engage in unfair collaborative acts may reverse presumptions of agreement on unfair collaborative acts, a reasonable determination shall be made in accordance with the trade norms by comprehensively taking into account the characteristics and status of the market in the field of trade of the goods in question, the characteristics and patterns of the goods, the distribution structure, the structure of pricing, the structure of prices, and all internal and external impacts on the market price, the status of each individual company's occupation in the same field of trade, the impact of price changes on the business profits, market share, etc. of the individual company, the legitimacy of the business judgment in light of the individual business conditions of the enterpriser, the actual state of direct exchange of opinions, such as meeting between the enterprisers, etc., the degree of probability that the agreement may be reached even without consultation, the experience of price reduction and the history of violation of the law, and the background of economic and policy at the time (see Supreme Court Decision 2001Du552, Dec. 12,

The court below rejected the plaintiffs' assertion as to the extinguishment of presumption of agreement of unfair collaborative act on the ground that the evidence as shown above is difficult to believe or otherwise there is no other evidence to acknowledge it, or that there is no other circumstance to reverse presumption of agreement of unfair collaborative act on the ground that the act of price reduction, which is the same externally revealed price reduction as that of the plaintiffs' assertion, was conducted independently according to their respective business judgment without any agreement or mutual needs.

Examining the relevant evidence in light of the records, we affirm the fact-finding and judgment of the court below as just, and there is no violation of the rules of evidence as to the destruction of the presumption of unfair collaborative act and any error of mistake of facts due to insufficient deliberation, as alleged in the grounds of appeal.

4. As to the fourth ground for appeal

Article 22 (1) and Article 61 (1) [Attachment 2] 6 of the Enforcement Decree of the Act provides that where an enterpriser has jointly conducted so-called unfair collaborative acts with other enterprisers, the Fair Trade Commission may impose upon such enterpriser a penalty surcharge calculated on the basis of their turnover during the period of such violation. In calculating the turnover which serves as the basis for the calculation of a penalty surcharge, the scope of the goods or services related to such unfair collaborative acts shall be determined individually and specifically by taking into account the type and nature of the goods or services included in the agreement between the enterpriser who has jointly conducted such unfair collaborative acts and their trading stages, etc. (see Supreme Court Decision 2001Du10387, Jan. 10, 2003). Under the Act, the penalty surcharge is not imposed on the goods or services in violation of Article 9 (1) and Article 61 (1) [Attachment 2] of the Enforcement Decree of the Act, which are the basis for calculating the turnover of the goods or services in violation of the Act, and it shall not be imposed on the goods or services in violation of the Act.

In accordance with the above legal principles, the court below is just to consider the interest accrued during the plaintiffs' violation period as the sales amount which serves as the basis for imposing the penalty, and there is no error in the misapprehension of legal principles as to the calculation of sales amount, which serves as the basis for imposing the penalty surcharge, nor in the misapprehension of legal principles as to deviation

5. Conclusion

Therefore, all appeals are 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 Shin Shin-chul (Presiding Justice)