[1] In a case where enterprisers agreed to determine, maintain, or change prices for the purpose of restricting competition and agreed on the basic principles, and meet several times and continue to reach an agreement for the purpose of determining specific prices, the method of determining “the day on which the act of violating the provisions of the former Monopoly Regulation and Fair Trade Act is terminated” under Article 49(4) of the former Monopoly Regulation and Fair Trade Act

[2] In a case where nine petroleum companies, including Gap corporation, jointly and severally agreed on the price determination, maintenance, and change for the purpose of restricting competition in the polypropy market on April 28, 1994, and agreed on the basic principles and continued individual agreements for the price determination, etc. on several occasions until March 2005, the case affirming the judgment below that the series of agreements jointly and severally with other companies since April 28, 1994 should be deemed as one unfair collaborative act, and that five years have not passed since the unfair collaborative act was continued until April 30, 2005, and as the unfair collaborative act was ordered to pay a penalty surcharge, it was decided that five years have not passed since June 5, 2007.

[3] In a case where the Fair Trade Commission orders Gap company to pay penalty surcharges in addition to Gap company's corrective order on the ground that nine petroleum chemical companies, including Gap company, were in collusion with the standard sales price of polypropye, and the sales of Gap company's differential products and products according to the Formula 2, which are the premise for the calculation of penalty surcharges, calculated as well as the sales of Gap company's differential products, the case holding that the judgment below erred in the misapprehension of legal principle which included the sales of the above products

[4] Whether the period of extinctive prescription of a disposition under Article 49(4) of the former Monopoly Regulation and Fair Trade Act is limited to five years for an offense subject to a penalty surcharge (negative)

[5] The legal nature of the imposition of a penalty surcharge against a violator of the Monopoly Regulation and Fair Trade Act (=the discretionary act) and the limitation on the exercise of its discretionary power

[6] In a case where the Fair Trade Commission orders the payment of a penalty surcharge to four companies among the four companies involved in collusion on the ground that nine companies, including Gap corporation, etc., were in collusion with the selling standard price of polypropy, etc., the case affirming the judgment below holding that the application of the imposition standard rate of a penalty surcharge to Gap company does not violate the principle of equity, etc.

[1] Article 49 (4) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7386 of Jan. 27, 2005) / [2] Article 49 (4) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7386 of Jan. 27, 2005) / [3] Article 2 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7386 of Jan. 27, 2005), Articles 9 (1) and 61 (1) [Attachment 2] Article 47 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 18768 of Mar. 31, 2005), Article 20 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7386 of Jan. 27, 2005), Article 20 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Act No. 27365-2 of the former Act) / [4] Article 762 of the former Monopoly Regulation and Fair Trade Act

[1] Supreme Court Decision 2004Du11275 Decided March 24, 2006 (Gong2006Sang, 728) / [5] Supreme Court Decision 2000Du1713 Decided September 24, 2002, Supreme Court Decision 2006Du4226 Decided February 15, 2008, Supreme Court Decision 2008Du15176 Decided March 11, 201 (Gong2010Sang, 754)

EK Energy Co., Ltd. (Bae, Kim & Kim LLC, Attorneys Ko Hyun-chul et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Byung-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2008Nu1759 decided June 11, 2009

The part of the lower judgment regarding the penalty surcharge payment order is reversed, and that part of the case is remanded to the Seoul High Court. The remaining appeals are dismissed.

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

1. Part of the claim for revocation of the corrective order

The Plaintiff filed an appeal against the part of the lower judgment regarding the claim for revocation of the corrective order, but does not contain any grounds of appeal in the petition of appeal and the appellate brief. Therefore, the Plaintiff’s appeal on this part is without

2. Part on a request for cancellation of the penalty surcharge payment order;

A. As to the first ground for appeal

Article 49(4) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315 of Dec. 31, 2004 and enforced April 1, 2005; hereinafter “Fair Trade Act”) provides that “The Fair Trade Commission shall not issue an order to take corrective measures or impose a penalty surcharge, etc. against a violation of this Act where five years have elapsed from the date on which the act of violating this Act was terminated.” The Fair Trade Commission shall jointly decide to jointly determine, maintain, or change prices for the purpose of restricting competition, and shall establish a specific standard for the decision subject, method of determination, etc., and continuously hold meetings to implement the above agreement in the future. Where there was a change in the specific contents or number of members of the agreement, the Fair Trade Commission shall not issue an order to take corrective measures or impose a penalty surcharge, etc. against the violation of this Act.” In addition, it shall be deemed that the enterpriser’s act of violating the Fair Trade Commission’s agreement was 20 days after the date on which the agreement was terminated as a whole, and it shall be 20 days after its conclusion.

According to the reasoning of the judgment below, the court below, after compiling the adopted evidence, found facts as stated in its reasoning, and found nine companies, including the plaintiff, etc., to continue to determine, maintain, or change prices in the future for the purpose of restricting competition in the polypropy market on April 28, 1994, and agreed on the basic principles, such as setting a certain standard for the method of price determination, implementation timing, etc., and holding a continuous meeting to determine prices in the future, and accordingly, held meetings several times until March 2005 in the process of implementing the above agreement, and continued individual agreements to determine specific prices. Thus, even if there was no working-level meeting between September 200 and January 2001, the court below determined that the plaintiff continued to conduct the unfair collaborative act in this case from September 28, 200 to April 205, 205, since the series of agreements jointly with other companies were not interrupted as a whole, and thus, the defendant continued to conduct the unfair collaborative act in this case from April 28, 1994.

Examining the records in light of the above legal principles, we affirm the judgment of the court below as just, and there is no error in the misapprehension of legal principles as to Article 49 (4) of the Fair Trade Act as otherwise alleged in the ground of appeal.

B. Regarding ground of appeal No. 2

1) According to Article 22 of the Fair Trade Act and Articles 9(1) and 61(1) [Attachment 2] of the Enforcement Decree of the same Act (amended by Presidential Decree No. 18768, Mar. 31, 2005; hereinafter “Enforcement Decree of the Fair Trade Act”), where an enterpriser jointly engages in an unfair collaborative act with another enterpriser, the Fair Trade Commission may impose upon the enterpriser a penalty surcharge calculated on the basis of the enterpriser’s sales during the pertinent violating period. The scope of the goods or services related to the unfair collaborative act, which serves as the basis for the calculation of the penalty surcharge, should 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 jointly engaged in the unfair collaborative act, the purpose and feasibility of substitution, transaction area, transaction counterpart, transaction stage, etc. (see, e.g., Supreme Court Decisions 2001Du10387, Jan. 10, 2003; 2008Du1785, Jun. 25, 2009).

2) Examining the evidence adopted by the court below in light of the records, a large number of the differential products of this case may be seen as products that the plaintiff jointly or independently developed and exclusively produced and supplied the products at the request of the supplier. In light of the above legal principles, the court below should have determined whether the differential products of this case were included in the related products which are the basis for calculating penalty surcharges, by examining whether the plaintiff jointly or independently developed and exclusively produced and supplied the differential products of this case at the request of the supplier, whether the plaintiff made individual price negotiations on the differential products of this case in trading with the consumer, whether the price collusion of this case obstruct other competitors from entering the market of the differential products of this case due to price collusion, or whether it was impeded in the production and sale of alternative products.

Nevertheless, the court below did not proceed to a review as to this, but did not include all of the differential products of this case in the related goods, which are the premise of calculating the penalty surcharge. Thus, the court below erred by misapprehending the legal principles as to the scope of sales, which is the premise of calculating the penalty surcharge.

3) 원심이 채택한 증거들을 기록에 비추어 살펴보면, 원고가 수요처와 거래에서 사용한 포뮬라 방식은 합성수지제품에 대한 국제적 시장조사기관인 ICIS 또는 Platts가 자체적으로 조사하여 발표하는 극동아시아 지역의 가격을 참고가격으로 하여 수요처와 개별 협상을 통해 ‘±α’의 형태로 폴리프로필렌 제품의 가격이 책정되는 방식으로서, 위 포뮬라 방식에 따를 경우 참고가격만이 가격결정에 영향을 줄 수 있는 변수일 뿐 폴리프로필렌의 범용제품의 가격에 관하여 한 이 사건 담합이 포뮬라 방식에 의한 가격결정에 영향을 줄 수 있는 변수가 될 수 없으므로, 앞서 본 법리에 비추어 보면 원심으로서는 원고가 수요처와 거래에서 포뮬라 방식에 따라 가격을 결정한 제품으로는 어떤 것들이 있었는지, 원고가 수요처와 거래를 함에 있어 포뮬라 방식 외에 가격결정에 영향을 미칠 수 있는 추가적인 변수가 있었는지, 이 사건 가격담합으로 인하여 이 사건 포뮬라 방식에 따른 제품들 시장에 다른 경쟁자들이 진입하는 데 장애를 겪었다거나 그 대체재를 생산·판매하는 데 지장을 받았는지 여부 등에 대하여 심리를 한 다음 이를 바탕으로 이 사건 포뮬라 방식에 따른 제품들이 과징금 산정의 기준이 되는 관련 상품에 포함되는지 여부를 판단하였어야 할 것이다.

Nevertheless, the court below did not proceed to the deliberation on this, but did not include all of the products according to the Formula 1 in the related products, and did not include the sales of the products according to the Formula 1 in the sales amount, which is the premise for calculating the penalty surcharge. Therefore, the court below erred by misapprehending the legal principles as to the scope of sales amount, which is the premise for calculating the penalty surcharge.

4) After compiling the adopted evidence, the court below acknowledged the facts as stated in its reasoning, and determined that the defective goods are sold at a lower price than the authentic goods if they can be used as substitute goods for the goods with a higher quality demand level or are sold to the processing company manufacturing low-class plastic containers, and that some defective goods can be produced for the purpose unrelated to the plastic processing business. Thus, since defective goods can be computed at any time at the manufacturing process of petrochemicals with the same raw materials and can be produced at any time, it is not at all, but at any time, at a lower price than the normal goods, and thus, it is general to determine the transaction price according to the market supply and demand rules. Accordingly, the collusion in this case also affects the price competition of defective goods.

In light of relevant statutes and records, the above determination by the court below is just, and there is no error in the misapprehension of legal principles as to the scope of sales, which is the premise for calculating the penalty surcharge, as alleged in the grounds of appeal.

C. Regarding ground of appeal No. 3

According to Article 22 of the Fair Trade Act, Articles 9(1) and 61(1) [Attachment 2] of the Enforcement Decree of the same Act, sales, which are the premise for calculating penalty surcharges, shall be determined by referring to business operators’ accounting data, etc., but each scope of waste charges shall be individually and specifically determined by type of act. Thus, waste charges are imposed on manufacturers and importers of synthetic resin, etc. that generated wastes in order to restrain the generation of wastes and prevent waste of resources. Thus, the nature of the burden borne by the burden is [the whole amendment by Act No. 6653 of Feb. 4, 2002] Article 19(1) and (2) of the former Act on the Promotion of Saving and Recycling of Resources (wholly amended by Presidential Decree No. 17808 of Dec. 18, 202), Articles 17 and 18 [Attachment 2] of the Enforcement Decree of the same Act (wholly amended by Presidential Decree No. 17808 of Dec. 18, 2002].

Therefore, the judgment of the court below to the above purport is just, and there is no error in the misapprehension of legal principles as to the scope of sales, which is the premise for the calculation of penalty surcharge, as alleged in the

D. Regarding ground of appeal No. 4

In full view of the purport and function of the penalty surcharge under Article 22 of the Fair Trade Act and the subject and procedure of imposition, etc. of the penalty surcharge, in order to realize the administrative sanctions against the violation, it has the characteristic of recovering unjust enrichment in the nature of administrative sanctions that impose sanctions against the violation, and the "five years" under Article 49(4) of the Fair Trade Act is a period for which the Fair Trade Commission can exercise the authority to issue a corrective order or to impose a penalty surcharge and is a period for exclusion. In light of the fact that the statute of limitations under Article 49(4) of the Fair Trade Act is a period for which the Fair Trade Commission can exercise the authority to issue a corrective order or to impose a penalty surcharge, etc., it cannot be interpreted that the statute of limitations under Article 49(4)

In light of the above legal principles, the judgment of the court below to the same purport is just, and there is no error in the misapprehension of legal principles as to the nature of penalty surcharge as alleged in the ground of appeal

E. Ground of appeal No. 5

In full view of the provisions of Articles 6, 17, 22, 24-2, 28, 31-2, and 34-2 of the Fair Trade Act, the Fair Trade Commission has discretion to determine whether to impose penalty surcharges on violations of the Fair Trade Act and, if imposing penalty surcharges, the amount of penalty surcharges within a specific scope prescribed by the Enforcement Decree of the Fair Trade Act and the Fair Trade Act. Thus, the Fair Trade Commission’s imposition of penalty surcharges on violators of the Fair Trade Act is a discretionary act. However, if there are grounds such as misconceptions of the facts that form the basis for imposing penalty surcharges in exercising such discretion, or contrary to the principle of proportionality and equality, it is illegal as a deviation or abuse of discretionary power (see, e.g., Supreme Court Decisions 200Du1713, Sept. 24, 200; 2006Du4226, Feb. 15, 2008).

According to the reasoning of the judgment below, after compiling the adopted evidence, the court below found the facts as stated in its reasoning. Among the companies involved in the collusion of this case, the court below determined that since four flexibles applied 3% of the base rate by the "Rules on Imposition of Penalty Surcharges on Prohibited Acts by Unfair Collaborative Acts and Trade Organizations" which were enforced at the time of the enforcement of the former Notice on the Specific Criteria for Imposition of Penalty Surcharges (wholly amended by the Fair Trade Commission Notice No. 2004-7 of April 1, 2004; hereinafter "the Notice on Imposition of Penalty Surcharges") as of April 1, 2004, all of the companies involved in the collusion of this case had terminated the agreement and implementation of the collusion of this case, while the plaintiff applied 3% of the base rate by the "Rules on Imposition of Penalty Surcharges on Prohibited Acts of Unfair Collaborative Acts and Trade Organizations" which were enforced by March 205, 205.

In light of the above legal principles and records, the above judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the principle of equity and the principle of proportionality as in the grounds of appeal.

3. Conclusion

Therefore, the part of the judgment of the court below regarding the penalty surcharge order shall be reversed, and the part concerning the penalty surcharge order shall be reversed as it falls under the case where there is no evidence that can calculate the penalty surcharge on the basis of a part of the unlawful grounds in the lawsuit, and it shall be remanded to the court below for a new trial and determination. The remaining appeal shall be dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)