Ebrodrown Broadcasting Co., Ltd. and 4 (Attorney Oin-hun et al., Counsel for defendant-appellant)

Fair Trade Commission (Law Firm Dcaro temperature, Attorneys Park Ho-ho et al., Counsel for defendant-appellant)

November 13, 2008

1. All of the plaintiffs' claims are dismissed.

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

Each corrective order and penalty surcharge payment order listed in attached Form 1, which the defendant issued against the plaintiffs on October 8, 2007, shall be revoked.

I. Details of the disposition; and

1. Eligibility and general status of the plaintiffs;

The plaintiffs and 1) 7 companies are business operators who operate multi-channel pay broadcasting services, etc. with a license from the Minister of Information and Communication in a business area after obtaining a license from the Minister of Information and Communication pursuant to Article 9(3) of the Broadcasting Act, and Article 2(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”).

The 7 business entities, including the Plaintiff, are affiliated companies of the Thai Industries Enterprise Group, a composite cable broadcasting business entity (mO: 5) who belongs to the composite cable broadcasting business entity (SO: Symator), a week, and the status of the composite cable broadcasting business entity (Symator):

Table 1> General Status of Table 1>

(as of the end of 2006, unit: 00 million won

Non-party 1 " non-party 1" 3,00 on June 13, 1995, 134 13,000 Doz. 134, 4,093 Doz. 4,093 5,700 Doz. 23, 250 Doz. 1,053 Doz. 1,158 on February 18, 1994, and 3,00 4,093 Doz. 4,093 8, 23, 250 58, 250 Doz. 97, 197, 30 Doz. 294, 194 Doz. 97, 197, 30 Doz. 94, 193, 293, 7, 194 Doz. 13, 294, 195.

2. Market structure and current status of industries;

(a) General status of multi-channels paid markets;

(1) Outline of multi-channel pay broadcasting market

A business entity that provides multi-channel pay broadcasting services has ① CATV broadcasting station facilities in order to provide multichannel broadcasting services, ② CATV broadcasting business entity that supplies broadcasting services through satellites, ③ CATV broadcasting business entity that supplies broadcasting services through satellites, and ③ CATV relay broadcasting business entity that retransmittings terrestrial broadcasting services in order to solve difficulties in the past, but is not a business entity under the Broadcasting Act.

A satellite broadcasting business entity is the Korea Digital Satellite Broadcasting Corporation (hereinafter referred to as Scarp) and satellite mobile multimedia broadcasting business entity. Scarp starts with broadcasting from March 1, 2002, to provide multi-channels services, to local areas in distress, and to conduct active marketing, etc. In the case of satellite DMB, it is difficult to view it as a business entity engaged in activities in a fixed multi-channels TV broadcasting market due to the characteristics of mobile media, such as restricting the number of transmission channels, restricting the size of screen, restricting the size of device, etc.

A CATV relay broadcasting business operator has lost the function as a competitor of a CATV relay broadcasting business operator due to a sudden decline in the influence in the multichannel pay broadcasting market due to a conversion policy of a CATV relay broadcasting business operator.

(2) Major characteristics and regulation of multi-channel pay markets;

The Korea Broadcasting Commission permits a CATV broadcasting business operator to make a local monopoly by 77 broadcasting zones, and a satellite broadcasting business operator in need of a large-scale investment allows Scar proto do so throughout the country. This is due to the judgment that competition among multiple business operators in the same area causes inefficiency, such as duplicate investments in transmission networks.

In order to prevent consumer damage caused by these exclusive permission, the Broadcasting Act provides that pay broadcast service providers shall determine the terms and conditions of service charges and other conditions and report them to the Korea Broadcasting Commission, obtain approval from the Korea Broadcasting Commission, and also obtain approval from the Korea Broadcasting Commission for the reported terms and conditions or modification of the reported terms and conditions or the approved usage fees.The approval system of these usage fees acts as the maximum price system for CATV broadcasting business operators and as the regulation of the fee rate for Scar F (the upper limit system) for Scar F (the upper limit system) so far, the method of regulating service fees for both media is applied.

B. Situation of the regional market to which seven business entities, including the Plaintiff, etc. belong (based on December 2005)

(a) Trodral crodal crodal crodal dydi broadcasting;

Most of the paid subscribers (97.1%) within the broadcast area of the above companies are subscribers of the above companies, and Skyp subscribers are merely 2.9% of the total amount. The above companies were the exclusive suppliers of cable broadcasting services within the relevant broadcast area after the Ekyp TV broadcasting was incorporated into ScsO on September 2004.

(ii) Troddr South Korea Broadcasting, EbrodrK Broadcasting;

Most of the paid subscribers (89.2%) in the broadcast area of the above companies are subscribers of the above companies, and Skyp subscribers are merely 10.8% of the total amount. The above companies became a business entity that exclusively supplies cable broadcasting services within the relevant broadcast area through the combination of the light, south Broadcasting and Gyeonggi Cable Network Co., Ltd. in the same area on July 2004.

(c) Trobropitic broadcast;

Most of the paid subscribers (95.7%) in the broadcast area of the above company are the subscribers of the above company and the North Foreign Broadcasting Co., Ltd., and the scarp subscribers are merely 4.3% of the total amount of 4.3% of the subscribers. Tbropic broadcast is limited to the entire area and part of Gangseo-gu in Busan, but it seems that there is a formal competition among the subscribers only within the entire area and part of Gangseo-gu in Busan, and the North Northern Broadcasting Co., Ltd. seems to exist in the form of competition. However, both companies do not enter into the main business area of each other on the grounds of the lack of investment ability, lack of equity ownership (Tbropic Broadcasting Co., Ltd. owns 41.6% of the stocks of the North Busan Broadcasting Co., Ltd.).

(d) Tybro-dong Broadcasting

Most of the paid subscribers (94.7%) in the broadcast area of the above company are subscribers to the above company, and the ScarF subscribers are merely 5.3% of the entire company.

(v) Ebrod new CD-ROM broadcasting;

Most of the paid subscribers (88.5%) in the broadcast area of the above company are subscribers of the above company, and Scarp subscribers are merely 1.5% of the entire company. The above company became an exclusive supplier of cable broadcasting services within the relevant broadcast area through the acquisition by competitive enterprisers, etc. on August 2004.

3. An act of 7 enterprisers, including the plaintiff, etc.

On November 2005, 7 business entities, including the Plaintiff, etc., discontinued the supply of group contract products in order by refusing to renew the contract at the time of expiration of the contract, according to the planning, such as the “TKSO PPT broadcast promotion policy” and the “e-brod collective housing organization termination plan,” which was prepared by TNO Co., Ltd. (mO).

On the other hand, seven business entities, including the Plaintiff, etc., strengthened sales promotion activities for goods exceeding “economic type” from January 2006 to induce individual subscription to group contract subscribers, etc. For this purpose, the said companies paid subscription fees per case to sales stores attracting more economic type subscribers, and exempted new subscribers from installation costs and for three-month receiving fees.

Accordingly, a large number of existing group contract subscribers were converted into 7 business operators including the plaintiff(2) and 7 individual contracts(see Table 2 â…………§, Table 3 â……§), and most of the remaining subscribers who are not converted into individual contracts are presumed to have viewed only terrestrial broadcasting through public office facilities, and they are presumed to have converted only some of the subscribers into Scar professional subscription.

Table 2

After termination of an existing group contract with the name of company 30, 253, 263, 963, 25, 264, 365, 263, 365, 47, 365, 256, 47, 253, 963, 296, 253, 47, 963, 294, 259, 253, 259, 246, 259, 259, 259, 253, 259, 253, 259, 264, 365, 296, 364, 257, 47, 474, 265, 294, 365, 296, 365, 294, 367, 47, 47, 47, 467

Remark 3> Increase in the burden of receiving fees due to the individual conversion (from November 2005 to December 2006)

After entering into an organization contract with the name of a company in the main sentence, 50,800 2,363.25 2,363,364,365 2,47,475 2,365 2,47,475 29,365 2,365 2,47,475 298 2,47,365 2,475 2,463,47,365 29,47,475 2,365 2,463,47,365 2,45 2,462,47,97,365 2,463,47,465 2,497,47,497,497,57,497,47,57,47,492,47,57,39632,47,497,24,52,397,4,2,397

10)The rate of increase in the receiving fees

4. The defendant's disposition

A. On October 8, 2007, the Defendant deemed that the instant act constituted “an act that is likely to substantially undermine the interests of consumers” under Article 3-2(1)5 of the Fair Trade Act, and ordered each corrective order and payment of penalty surcharge as stated in the attached Table 1 list (hereinafter “instant disposition”).

(b) The process of calculating the penalty surcharge;

(1) Calculation of basic penalty surcharges

Since it is difficult to calculate the relevant sales because specific accounting data that can calculate the relevant sales are not preserved due to lack of accounting-related computer system, etc., it is difficult to calculate the relevant sales, the basic penalty surcharge shall be calculated as KRW 50,000,000.

(2) Determination of the mandatory adjustment penalty surcharge

The amount equivalent to 10% of the basic penalty surcharge shall be added because the violation period is more than one year but not more than two years. Trodr South Broadcasting, Trodrcencenc Broadcasting, Erodrencencenz Broadcasting, and Erodrid CDs Broadcasting have three violations of law for the last three years. Therefore, the amount equivalent to 10% of the basic penalty surcharge shall be added.

(3) Determination of voluntary adjustment penalty surcharges

In order to actively cooperate in the investigation by the Fair Trade Commission in the submission of explanatory materials, etc. during the investigation period, the amount equivalent to 20% of the basic penalty surcharge shall be reduced. Trodar Broadcasting shall be reduced by adding an amount equivalent to 10% of the basic penalty surcharge as it has continuously shown the deficit of net income for the last two years or more, and Erodar Broadcasting, Erodar Crodar Broadcasting, Erodrcen Crodic Crodar Broadcasting, Erodar Broadcasting, Erodar Crodar Broadcasting, Trodar Broadcasting, Troddroid CD-ROM Broadcasting, and Erodrids Broadcasting for the same reasons.

(4) Determination of penalty surcharges

With respect to Trodial Broadcasting and Trodrid SDR Broadcasting, an amount equivalent to 70% of the voluntary adjustment penalty surcharge shall be reduced by taking into account the fact that the ripple effect of the violation is limited to a part of the area, the actual payment ability, and the fact that the self-denunciation of the group contract by the act of this case is less than 40,000 persons. For the remaining five companies, an amount equivalent to 50% of the voluntary adjustment penalty surcharge shall be reduced by taking into account the fact that the ripple effect of the violation is limited to a part of the area and the actual payment ability

Table 4. Table 4. Calculation of Penalty Surcharge

(unit: 00,000 won, per cent)

The penalty surcharge imposed on E.S. reduction rate of voluntary reduction rate of the basic adjusted penalty surcharge in the name of the voting company included in the main text shall be 50 10 50 50 50 50 38.5 70 11 T. 50 20 50 50 40 370 9 T. 50 60 20 48 50 20 20 20 20 20 20 20 20 20 36 36 50 18 T. 50 20 20 20 20 20 36 50 18 T. 50 540 3530 250 50 16 50 16 30 50 250 250 250 630 6360 50 630 60 50 250 20 364

[Ground of recognition] Unsatisfy, Gap evidence 1 to 7

Ⅱ Whether the disposition is lawful

1. The plaintiffs' assertion

A. The assertion that the illegality is not unfair

The 7 business entities, including the Plaintiff, etc., are inevitably discontinued in order to reduce losses beyond the 2,000 won of group contract products, and they cannot be deemed unfair acts.

B. The assertion that there is no ground provision

Article 3-2(1) of the Fair Trade Act prohibits the abuse of market-dominating position by a market-dominating enterpriser, and both subparagraphs 1 through 5 provide for the types of abuse acts, and Article 3-2(2) provides for the types of or criteria for such abuse acts. Accordingly, Article 5(1) through (5) of the Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 20360, Nov. 2, 2007; hereinafter the same shall apply) provides for the types of or criteria for five abuse acts under Article 3-2(1)1 through 5 of the Fair Trade Act. However, the latter part of Article 3-2(1)5 of the Fair Trade Act does not provide for specific types of or criteria for the acts under the latter part of the Fair Trade Act (any act that is likely to seriously undermine the interests of consumers). As such, insofar as there is no provision on the specific types of or criteria for “an act that is likely to seriously undermine the interests of consumers,” the latter part of Article 3-2(1)5 of the Fair Trade Act cannot be subject to sanction.

C. Claim to exclude the application of the Fair Trade Act

Since the Broadcasting Act is related to the special law and the general law in relation to the relationship with the Fair Trade Act, the Broadcasting Act, a special law, should be applied to the determination of user fee, such as the instant act, and the application of the Fair Trade Act should be excluded.

(d) The assertion that it is a legitimate act under statutes;

The Broadcasting Act permits a CATV broadcasting business operator's exclusive status through the permission system for CATV broadcasting business, but imposes a high level of public regulation from the perspective of the public interest and the public interest of broadcasting. Since the act in this case is in accordance with the procedures prescribed by the Broadcasting Act, it is so excluded from the application of the Fair Trade Act as the "justifiable act in accordance with the Act and subordinate statutes"

2. Related statutes;

Attached Table 2 shall be as listed in the attached Table 2.

3. Determination

A. As to the assertion that there is no illegality

In light of the above, the following: (a) business entities’ freedom of business guaranteed exclusive rights in a certain area including a CATV broadcasting business entity; (b) there is no more reliable evidence to support the fact that the profit of the collective contract was actually recorded in the insured; and (c) seven business entities, including the Plaintiff, do not seem to have any degree of appropriate price for the collective contract products based on such analysis (i.e., the maximum amount of profit derived from the collective contract products, including No. 1, 2, and 4, should be determined on the basis of an increase in the expected revenue of the collective contract products; and (d) it is difficult to find out that there is no other way to increase the amount of profit derived from the collective contract products, such as an increase in the amount of revenue derived from the collective contract, based on the fact that most of the collective contract products, including the Plaintiff, etc., were not subject to more than half of the total amount of revenue derived from the collective contract products, and that there is no other way to increase the amount of revenue generated from the collective contract products.

B. As to the assertion that there is no ground provision

The plaintiffs asserted to the effect that the latter part of Article 3-2 (1) 5 of the Fair Trade Act is a supplementary provision to the effect that the acts that are not provided for in subparagraph 1 (price abuse) and subparagraph 2 (explosion) of the same paragraph are also included in the regulation, and therefore the type and standard of specific acts should be established under the Enforcement Decree of the Fair Trade Act. Based on such reasoning, the plaintiffs refer to the Supreme Court Decision 2005Du1879 Decided February 14, 2008.

The above Supreme Court decision is related to the interpretation of Article 23 (1) 8 of the Fair Trade Act as to unfair trade practices. Unlike the above subparagraph 8 of the same paragraph, the relationship with the basic type of acts or the standard setting for measuring it is not presented at all. Thus, it is difficult to predict whether certain acts performed in the course of ordinary trade from the person who is the principal of the business falls under the "act that is likely to impede fair trade" as provided in subparagraph 8 of the same Article. Thus, unless the above subparagraph 8 of the Enforcement Decree of the Fair Trade Act provides for the types or standards of unfair trade practices related to the above subparagraph 8, the act in question shall be deemed as an act that is likely to impede fair trade, and thus, it shall not be subject to sanctions by applying it to the unfair trade practices as provided in Article 23 (1) 8 of the Fair Trade Act.

On the contrary, the latter part of Article 3-2 (1) 5 of the Fair Trade Act explicitly specifies the basic types of acts, such as market-dominating positions, ② prejudice to consumer interests, ③ illegality, and ④ an obvious nature, etc., or the alternative criteria to measure them. Thus, this cannot be deemed as merely a supplementary general provision in relation to the relationship between subparagraphs 1 and 2 of the same paragraph. Therefore, even though there is no provision on the specific types and criteria under the Enforcement Decree of the Fair Trade Act with regard to the act under the latter part of subparagraph 5 of the same Article, the latter part of subparagraph 5 of the same Article may be applied directly to the act in question. Accordingly

C. Regarding the assertion of exclusion from the application of the Fair Trade Act

The purpose of the Fair Trade Act is to promote fair and free competition by regulating the abuse of market-dominating positions by enterprisers, thereby encouraging creative business activities, protecting consumers, and promoting balanced development of the national economy (Article 1 of the Fair Trade Act); while the Broadcasting Act aims at protecting the rights and interests of viewers, promoting democratic formation of public opinion and enhancing national culture, and contributing to the development of broadcasting and the promotion of public welfare (Article 1 of the Broadcasting Act) by guaranteeing the freedom and independence of broadcasting and raising the public responsibility of broadcasting (Article 1 of the Broadcasting Act). Considering the different legislative purposes of the Broadcasting Act, the Broadcasting Act and the Fair Trade Act cannot be deemed as having a relationship between a special law and a general law, so the above plaintiffs’ assertion

D. As to the assertion that the act is a legitimate act under statutes

Article 58 of the Fair Trade Act provides that "this Act shall not apply to lawful acts conducted by an enterpriser or an enterprisers' organization in accordance with other Acts or orders issued under such Acts." The above provision provides that "The Act guarantees an enterpriser's exclusive status by a business or authorized system which is deemed reasonable to restrict competition due to the special nature of the pertinent business, while the Act provides that an enterpriser's exclusive status is guaranteed by a business or an enterpriser's exclusive status, it refers to a necessary minimum act to be conducted within the scope of an order issued under other Acts or the relevant Acts, which specifically recognizes an exception to free competition in a business which requires high level of public regulation from the perspective of public nature (see Supreme Court Decision 2003Du925

Article 77 of the Broadcasting Act provides that a CATV broadcasting business operator shall determine the terms and conditions of the service fee and other terms and conditions and shall report them to the Korea Broadcasting Commission. The Korea Broadcasting Commission may order changes in the terms and conditions when it considers that the said terms and conditions significantly unfair and detrimental to the viewers’ interest. However, this is only a provision that imposes a CATV broadcasting business operator a duty to report the terms and conditions, and grants the Korea Broadcasting Commission the authority to review them and issue an order to modify the terms and conditions, and the Korea Broadcasting Commission does not allow the Korea Broadcasting Commission to individually and directly engage in the determination of the user fee of a CATV broadcasting business operator. Thus, the Broadcasting Act cannot be deemed as a specific Act that specifically recognizes the exception of free competition. In addition, the instant act

III. Conclusion

If so, all of the plaintiffs' claims are without merit, they are dismissed. It is so decided as per Disposition.

[Attachment 1]

Judges Lee Sung-sung (Presiding Judge)

1) At the time when the Defendant rendered the instant disposition, the Gangseo-gu Seoul Metropolitan area was designated as the broadcasting permission area, and Trod SDR Broadcasting Co., Ltd., but on October 31, 2007, Trod SDR broadcast Co., Ltd. merged Trodrout broadcast with Trodrouter, Inc., and changed its trade name into Trodrouter Broadcasting Co., Ltd. (this company is the Plaintiff Trodrouter Broadcasting Co., Ltd.).

Note 2) On October 31, 2007, the Plaintiff 2 was merged with the Trodon Broadcasting Co., Ltd.

Note 3) As of the time of the disposition of the instant case for convenience, the term “teropic broadcasts”, “teropic broadcasts”, “teveropic broadcasts”, “Everopic broadcasts”, “teveropic broadcasts”, “teveropic broadcasts”, “Everopic broadcasts”, and “ Tropic broadcasts”, respectively, and “seven business operators including the Plaintiff, etc.” when combining all of them.

(4) In accordance with Article 2 of the Addenda to the Act on the Establishment and Operation of Korea Communications Commission (Act No. 8867 of Feb. 29, 2008), the affairs were succeeded to the Korea Communications Commission from February 29, 2008; hereinafter “Korea Broadcasting Commission”.

5) Ebrod Co., Ltd. is a company established by Nonparty 4 of the enterprise group Taedong Industries’s investment of capital of KRW 200 million on January 1, 2006, and established for the purpose of overall control, direction, and control control of all the management activities, including management strategies, finance, accounting, marketing, personnel management, etc. of 19 SO and PP. It was established for the purpose of overall control, direction, and control. There is no mutual equity relationship between Ebrod and affiliated SO, and some SO provided Trod’s operating expenses through the “management agreement.”

Note 6) The instant act is referred to as “instant act”

7) The product corresponding to the “basic type” that was supplied to apartment units, including apartment houses. Specific monthly receiving fees were different from each company. In the case of TBro Broadcasting, 00 won and 3,300 won, 00 won in the case of Ebropic broadcasts, 00 won in the case of Ebropic Broadcasting, 1,700 won and 3,300 won in the case of Tropic Broadcasting, 1,000 won in the case of Tropic Broadcasting, 2,000 won in the case of Tropic Broadcasting, 3,000 won in the case of Tropic Broadcasting, and 2,000 won in the case of Tropicctic Broadcasting, 3,000 won in the case of Tropicctic Broadcasting, and 1,000 won in the case of Tropictic Broadcasting.

Note 8) The monthly receiving fee of KRW 8,000 refers to 8,000. Meanwhile, the “basic form” refers to 6,000 won ( Trodr South Broadcasting and Trodrcencencing 5,800 won) of monthly receiving fee of KRW 6,00 (Trodr South Broadcasting and Trodrcencen cencing 5,800; the “high pay” refers to 15,000 won of monthly receiving fee of KRW 15,00; and the compulsory form refers to goods of KRW 4,00 of monthly receiving fee

Note 9) This is because, compared to the end of year 2005, a change in ScarF’s subscribers in the relevant area was not reached in 2006.

Note 10) In the case of being admitted to “basic form” after termination of the group contract compared to the average unit price before termination of the group contract, the rate of monthly receiving fee increase.

Note 11) Unless otherwise specified a company in below, all seven business entities, including the Plaintiff, are common.