Whether a participant of a collaborative act who provided evidence can become a person eligible for reduction or exemption, such as penalty surcharges, or a person who has provided such evidence after the Fair Trade Commission sufficiently secured necessary evidence by informing outside the collaborative act (negative)

In full view of the language, structure, and purport of Article 22-2(1)2 and (3) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 1234, Jan. 24, 2014; hereinafter “Fair Trade Act”) and Article 35(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 25503, Jul. 21, 2014; hereinafter “Enforcement Decree”), the Fair Trade Commission may not be a person participating in the collaborative act who provided evidence after sufficiently securing necessary evidence upon external information, as well as a person participating in the collaborative act who provided evidence may not be a person participating in the first-class investigation and cooperation. The reasons are as follows.

① The purport and purpose of the Decree of the Fair Trade Act is to establish a system for reduction or exemption of researchers and cooperation. The purpose of this Ordinance is to encourage reduction or exemption of unfair collaborative acts by undermining trust among participating enterprisers by voluntarily cooperating with an investigation into unfair collaborative acts. At the same time, at the actual stage of enforcement, the Fair Trade Commission is to ensure the effectiveness of sanctions against unfair collaborative acts that are closely conducted by allowing more easy detection of unfair collaborative acts and collection of evidence. In light of the purpose and purpose of the reduction or exemption system, after the Fair Trade Commission has already obtained information on unfair collaborative acts and sufficiently secured evidence necessary for proving such information, it cannot be established. This also applies to first and second priority investigators. However, the Decree of the Fair Trade Act prescribes that “the first person who provided evidence” among investigatorss, and “the second person who provided evidence” is not only the first person who provided evidence among them, but also the first person who did not create an independent status different from the first one, and thus, is not the one who provided investigation.

② Under Article 35(1)3 of the Enforcement Decree, “the first evidence provider” under the premise that “the second person, who alone provides evidence necessary to prove an unfair collaborative act,” as the requirements for the second person, refers to “the first person,” who is a collaborative act participant. In such a case, setting the priority in the order of the provision of evidence in the system of the reduction and exemption of investigators for investigation purposes at the order of the provision of evidence, based on the premise that there are a large number of investigators for investigation. Therefore, in calculating the priority, the existence of a collaborative act participant who is not recognized as an external collaborative act or an investigator for investigation, is not considered.

(3) Meanwhile, Article 35(1)3 of the Enforcement Decree does not stipulate the requirement that “the Fair Trade Commission cooperates in an investigation in a state that it fails to obtain information on an unfair collaborative act or fails to obtain sufficient evidence necessary to prove an unfair collaborative act,” unlike the first investigator or investigator. However, in a case where the Fair Trade Commission sufficiently provides necessary evidence with “the provision of evidence by the first investigator or investigator or investigator or investigation,” it is intended to induce more rapid collusion and harm and facilitate securing additional evidence by allowing the first investigator or investigator to be established in addition to the establishment of the first investigator or investigation.

④ In short, where the Fair Trade Commission has already secured sufficient evidence necessary to prove an unfair collaborative act, an investigator may not be established regardless of the order thereof. Provided, That where the Fair Trade Commission sufficiently secured necessary evidence by providing evidence by the first-order investigators, the second-order investigators may also be established in addition to the formation of the first-order investigators. However, even if a partner of the collaborative act provides evidence after sufficiently secured necessary evidence by the outside information of the collaborative act, it cannot be subject to reduction or exemption pursuant to the statutory “investigations” system, and the discretionary reduction pursuant to the “Investigation Cooperation” as stipulated in the notification of detailed criteria for imposing penalty surcharges by the Fair Trade Commission upon delegation under Article 61(3) of the Enforcement Decree is only possible.

Article 22-2(1)2 and (3) (see current Article 22-2(4)) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 12334, Jan. 24, 2014); Article 35(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 25503, Jul. 21, 2014);

Supreme Court Decision 2017Du46912 Decided July 26, 2018

Switzerland Co., Ltd. (Law Firm Panan, Attorneys Hun-hee et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Hwang Young-hoon, Counsel for defendant-appellant)

Seoul High Court Decision 2017Nu31431 decided July 6, 2017

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. A. Article 22-2(1)2 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 1234, Jan. 24, 2014; hereinafter “Fair Trade Act”) provides that “a person who has cooperated in an investigation by means of the provision of evidence, etc.” may be mitigated or exempted from corrective measures pursuant to Article 21 (Corrective Measures) or penalty surcharges pursuant to Article 22 (Penalty Surcharges) and may be exempted from filing a complaint pursuant to Article 71 (Accusation).”

Article 35(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 25503, Jul. 21, 2014; hereinafter “Enforcement Decree”) which provides for the scope of persons who have been mitigated or exempted pursuant to delegation of Article 22-2(3) of the Fair Trade Act and the standards, degree, etc. for mitigation or exemption shall be classified into “the first investigative partner” (Article 25(2) and “the second investigative partner” (Article 3).

According to this, in order to be a first-class investigative partner, ① the first-class person who alone provides evidence necessary to substantiate an unfair collaborative act (the proviso is omitted), ② the Fair Trade Commission cooperates in an investigation in a state that it fails to obtain information on an unfair collaborative act or fails to obtain sufficient evidence necessary to substantiate an unfair collaborative act; ③ all of the facts related to an unfair collaborative act are stated; ③ the submission of relevant materials; and ④ the requirements that the investigation was conducted in good faith until the completion of the investigation. (2)

In order to be eligible for the second-class investigative partner, ① the second-class person who alone provides evidence necessary to substantiate an unfair collaborative act (the proviso is omitted), ② all facts related to an unfair collaborative act are stated, and submitted related materials are required to cooperate in good faith until an investigation is completed, ③ the requirement that the unfair collaborative act was suspended, but, unlike the first-class investigative partner, the requirement that “the Fair Trade Commission cooperates in an investigation without obtaining information on an unfair collaborative act or without obtaining sufficient evidence necessary to substantiate an unfair collaborative act” is not required.

B. Comprehensively taking account of the language, structure, purport, etc. of such statutes, the following reasons are as follows: (a) after the Fair Trade Commission sufficiently secured necessary evidence by information from the outside person of the collaborative act, the participants of the collaborative act who provided the evidence can not be deemed not only the first investigating co-ordinator but also the second investigating co-

(1) The purport and purpose of the Fair Trade Act is to establish a system for reduction or exemption of researchers and subcontractors. The purpose of this Act is to strengthen trust among participating enterprisers by granting benefits to voluntarily cooperate in investigation into unfair collaborative acts, thereby preventing unfair collaborative acts. At the same time, at the actual stage of enforcement, the Fair Trade Commission seeks to ensure the effectiveness of sanctions against unfair collaborative acts that are closely conducted by allowing more easy detection of unfair collaborative acts and collection of evidence (see, e.g., Supreme Court Decision 2017Du46912, Jul. 26, 2018). In light of the purpose and purpose of the aforementioned reduction or exemption system, after the Fair Trade Commission has already obtained information on unfair collaborative acts and sufficiently secured evidence necessary to prove such information, the “investigation Cooperation” may not be established. This is equally applicable to cases of first and second priority, as well as second priority. However, the Fair Trade Act prescribes that one person who provided evidence, among investigators, is not only a person who first provides evidence, but also a person who is not a second one who intends to provide independent evidence.

(2) Article 35(1)3 of the Enforcement Decree provides that “the first evidence provider” under the premise that “the second person is the one who alone provides evidence necessary to prove an unfair collaborative act” as the requirements of the first investigator for investigation” refers to “the first person who is a collaborative partner for investigation.” As such, setting the order in the order of the provision of evidence under the system of the reduction and exemption of investigation co-offenders is for the sake of the difference between reduction and exemption and the degree of difference between them on the premise that there are a large number of investigators for investigation. Therefore, in calculating the order of priority, the existence of a collaborative participant who is not recognized as an outside person or an investigator for investigation, who cannot be an outside person of the first investigation co-offender for investigation or cooperation.

(3) Meanwhile, Article 35(1)3 of the Enforcement Decree does not stipulate the requirement that “the Fair Trade Commission cooperates in an investigation without obtaining information on an unfair collaborative act or without obtaining sufficient evidence necessary to prove an unfair collaborative act,” unlike the first investigator. However, in a case where the Fair Trade Commission sufficiently provides necessary evidence with “the provision of evidence by the first investigator”, it is intended to induce more rapid collusion and harm and facilitate securing additional evidence by allowing the second investigator in the investigation, in addition to the establishment of the first investigator in the investigation, in addition to the establishment of the first investigator in the investigation.”

(4) In short, in cases where the Fair Trade Commission has already secured sufficient evidence necessary to prove an unfair collaborative act, the investigator of the investigation may not be established, regardless of the order thereof. However, in cases where the Fair Trade Commission sufficiently secured necessary evidence by providing evidence by the first investigator of the investigation, the first investigator of the investigation may also be established in addition to the formation of the first investigator of the investigation. However, even if the co-offender provided evidence after having sufficiently secured necessary evidence by the external information of the co-offender, even if the co-offender provided evidence, it cannot be subject to reduction or exemption pursuant to the statutory “co-offender of the investigation” and can be subject to reduction or exemption pursuant to the “investigation” under Article 61(3) of the Enforcement Decree of the Act.

2. On May 13, 2014, the lower court: (a) acknowledged that the Plaintiff first applied for reduction or exemption from among the participants in the collaborative act; (b) the Defendant denied the Plaintiff’s status of an investigator in the first-class investigation on the grounds that the Defendant has already secured sufficient evidence based on information and submission of data; and (c) dismissed the Plaintiff’s application for reduction or exemption without further review as to whether the Plaintiff falls under the first-class investigator in the investigation and cooperation; and (d) determined that

A. The first person who independently provided evidence necessary to prove an unfair collaborative act does not necessarily mean that “the second person who independently provided evidence necessary to prove an unfair collaborative act” is limited to the applicant for reduction or exemption.

B. Unlike the first investigator, the second investigator does not require that “the Fair Trade Commission cooperates in the investigation under the condition that it fails to obtain information on the unfair collaborative act or fails to obtain sufficient evidence necessary to substantiate the unfair collaborative act.”

C. Therefore, although the Plaintiff alone provided evidence necessary to prove an unfair collaborative act, it is not that the Fair Trade Commission did not obtain information on the unfair collaborative act or obtain sufficient evidence necessary to prove the unfair collaborative act, so even if the Plaintiff cannot become the first investigative partner, the Defendant should have determined that the Plaintiff is a second investigative partner by examining the remaining requirements for reduction and exemption.

3. However, in light of the above legal principles, if the defendant had already secured sufficient evidence by information from the outside of the collaborative act before the plaintiff's provision of evidence, the defendant denied the plaintiff's status as the investigative partner and dismissed the application for reduction without examining whether the defendant constitutes the second investigative partner separately, and there is no error of law.

4. Nevertheless, the lower court determined that the Defendant’s rejection disposition was unlawful on a different premise. In so doing, the lower court erred by misapprehending the legal doctrine on the investigative partner’s reduction and exemption system, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds

5. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min You-sook (Presiding Justice)