[1] The method to determine whether there exists an agreement on an act of unfairly restricting competition, which is prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act, where a competitor exchanged information on major competitive factors, such as price, etc.

[2] In a case where Gap life insurance company and 15 insurance companies, including Eul life insurance company, exchanged information on future scheduled interest rates and announced interest rates from 2001 to 2006, and thereby determined their respective interest rates, the Fair Trade Commission imposed corrective orders and imposition of penalty surcharges on Gap company, the case affirming the judgment below that the above disposition was unlawful on the ground that it cannot be readily concluded that the 16 life insurance companies, including Gap, engaged in unfair collaborative acts by price collusion

[1] Article 19(1) of the Monopoly Regulation and Fair Trade Act / [2] Article 19(1) of the Monopoly Regulation and Fair Trade Act

Alanz Life Insurance Co., Ltd. (Attorneys Son Ji-yol et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm two, Attorneys Kim Jae-gu, Counsel for defendant-appellant)

Seoul High Court Decision 2012Nu2216 decided January 23, 2014

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

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 through 3

A. “Unfair collaborative act” prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) is “agreement on an act of unfairly restricting competition.” In this context, “agreement” includes not only explicit agreement, but also implied agreement. However, the essence of such agreement is that two or more enterprisers communicate with each other. As such, it cannot be deemed that there exists an external form consistent with the existence of “unfair collaborative act” listed in each subparagraph of the above provision, and there should be proof of circumstances to acknowledge the reciprocality of communication between the enterprisers (see, e.g., Supreme Court Decision 2012Du13665, May 16, 2014).

In addition, in cases where competition enterprisers exchange information on major competitive factors, such as price, the exchange of such information may serve as a means to facilitate collusion or facilitate the execution of collusion by removing uncertainty on the decision-making of price, etc., and thus, the exchange of such information may serve as a significant symbol on the reciprocality of communication among the enterprisers. However, even so, it cannot be readily concluded that there exists an agreement on an act of unfairly restricting competition solely based on the fact of exchanging such information does not necessarily lead to the conclusion that there exists an agreement on an act of unfairly restricting competition. The determination of whether there exists an agreement should be made by comprehensively taking into account all the circumstances, such as the structure and characteristics of the relevant market, the nature and contents of the exchanged information, the subject and timing of the exchange of the information, the purpose and intent of the exchange of information, the degree of difference, the degree of price and output, etc. after the exchange of

B. In light of the circumstances stated in its reasoning, the lower court determined that the Defendant’s corrective order and imposition of the penalty surcharge (hereinafter “instant disposition”) on the premise that the Plaintiff engaged in an unfair collaborative act by price collusion with 15 life insurance companies, including Samsung Life Insurance Co., Ltd., in relation to the scheduled interest rate and new publication interest rate from 2001 to 2006, deeming that the evidence submitted by the Defendant cannot be readily concluded that the Plaintiff engaged in an unfair collaborative act by price collusion with other 15 life insurance companies.

In light of the above legal principles and records, the above judgment of the court below is just, and contrary to the grounds of appeal, the court below did not err by misapprehending the legal principles as to the requirements for establishment of unfair collaborative act, or by exceeding the bounds of the principle of free evaluation of evidence against logical

2. As to the fourth ground for appeal

The court below held that the first act is unlawful since the first act constitutes an unfair collaborative act due to the second act, even if the first act constitutes an unfair collaborative act due to the second act, since the first act is not constituted an unfair collaborative act due to the second act, since the defendant had already completed the second act in 2001, and since the defendant had made an agreement to specify the expected interest rate or to reduce it together several times from 1998 to 2000 (hereinafter “the first act”) and the first act to exchange information on the expected interest rate, etc. in the future from 201 to 2006, and the second act to determine the interest rate should be deemed to constitute a single collaborative act as a whole.

In light of the relevant legal principles and records, such determination by the court below is just, and there were no errors by misapprehending the legal principles on the number and termination of unfair collaborative acts, and the period of disposal prescription.

3. Conclusion

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.

Justices Kim Shin (Presiding Justice)