2014Do2076 Violation of Monopoly Regulation and Fair Trade Act

A Cooperatives

Defendant

Attorney AG, B, and AH

Seoul Central District Court Decision 2013No3953 Decided January 24, 2014

February 12, 2015

All the judgment of the court below and the judgment of the first instance are reversed. Defendant is acquitted.

The grounds of appeal are examined.

1. Summary of the facts charged

The Defendant is a nonprofit incorporated association established for the purpose of promoting the sound development of the electric wire industry and enhancement of common interests among the members, and is an enterprisers' organization under Article 2 subparagraph 4 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Fair Trade Act"). The enterprisers' organization may not agree with other enterprisers to engage in any act of unfairly restricting competition by jointly determining the price or by determining the quantity of production.

The Defendant, along with the employees of 34 electric wire business operators (hereinafter referred to as "electric wire business operators") with respect to the Defendant's work, agreed on the price, volume, and allocation in the annual unit price contract of electric power line ordered by the Korea Electric Power Corporation (hereinafter referred to as the "Korea Electric Power Corporation") from September 27, 2000 to September 12, 2007. From January 11, 2005 to August 30, 2007, the Defendant concluded an annual unit price contract with the Korea Electric Power Line (hereinafter referred to as the "the instant collaborative act") by failing to comply with the said agreement in the annual unit price contract of the Korea Electric Power Line from September 11, 2005 to August 30, 2007.

2. The judgment of the court below

The lower court upheld the first instance judgment convicting the Defendant of the instant facts charged, following the fact that the Defendant ordered the quantities allocated to electric cable enterprisers by the method of ordering consignment production until September 11, 2008, since the agreement was implemented on the price and quantity distribution with electric cable enterprisers, the statute of limitations has run since the termination of September 11, 2008. Since the instant collaborative act was committed on July 10, 2013, which was the five-year statute of limitations under the Criminal Procedure Act, prior to the expiration of the five-year statute of limitations under the said Act, the instant public prosecution was duly instituted.

3. Judgment of the Supreme Court

However, we cannot agree with the above decision of the court below for the following reasons.

A. In the event that there was an act of implementation based on the determination of prices and the agreement on restriction on trading under Article 19(1)1 and 3 of the Fair Trade Act, the date on which the unfair collaborative act ends is not the date on which the agreement was reached, but the date on which the act of implementation based on the agreement is terminated. Therefore, in the event that there was an act of implementation based on the determination of prices and the agreement on restriction on trading under Article 19(1)1 and 3 of the Fair Trade Act, the statute of limitations on the violation of Article 66(1)10 of the Fair Trade Act runs from the date on which the act of enforcement ends (see, e.g., Supreme Court Decision 2010Do160

B. The record reveals the following facts.

(1) The Defendant agreed with electric cable enterprisers on the ratio of the distribution of the quantity between large enterprises and small-medium enterprises with respect to the purchase of various electric power lines each year from 2000 to 2006, the ratio of the distribution between large enterprises and small-medium enterprises, the ratio of the distribution of the quantity allocated between large enterprises and small-medium enterprises, the selection of the successful bidder, the bid price and the bid price according to the bidding scenario, and the bid price and the bid price according to the bidding scenario. The Defendant participated in the above bidding and implemented the bid, and the bid price and the bid price are re-distribution

(2) On October 19, 2006, the Defendant’s C head of the division agreed on the tender of 2006 with the officers and employees of electric cable enterprisers. The specific contents are as follows: ① the basic allocation ratio of large enterprises to total bidding quantity: 60%: 40%; ② the distribution ratio of large enterprises to small and medium enterprise is 5%: 45% for underground power lines; 59.3% for electric poles for electric poles for power generation and for power generation for power generation; 40.7% for steel poles; 10% for public power lines: 0%; 0% for low voltage lines; and 0% for low voltage lines; ③ the scheduled allocation ratio for small and medium enterprises is unified to the Defendant; the Defendant distributes the successful tender volume to the small and medium enterprises to which the Defendant belongs; and ② the order for demotion of small and medium enterprises in a way equivalent to 100 billion won for small and medium enterprises to compensate for the decrease in the sales of some small and medium enterprises.

(hereinafter referred to as the "Agreement in 2006").

(3) In accordance with the agreement in 2006, the electric cable enterprisers participated in the bid for the purchase of electric power lines, such as underground power lines, electric poles, etc., conducted on December 2006, according to the response scenarios. The Defendant allocated the successful bid volume to the affiliated small and medium enterprises according to their partnership shares, etc. The D Co., Ltd., F, and H Co., Ltd., which belong to a large enterprise, re-distributions part of the successful bid volume from January 19, 2007 to December 4, 2007, to compensate for the decrease in external shape of the small and medium enterprises.

(4) According to the agreement in 2006, the Defendant entered into a contract for the supply of goods from July 12, 2007 to July 11, 2008, with the bid price being entered into force from March 15, 2007 to June 22, 2007 in order to increase the successful bid price, and entered into a contract for the supply of goods from July 11, 2007 to six successful bidders.

(5) In addition, according to the agreement in 2006, the Defendant entered into a contract for the supply of goods from September 12, 2007 to September 11, 2008 with the contract price awarded at 12 times to increase the successful bid price in a tender that took effect from July 2007 to September 5, 2006, and distributed the successful bid price to 13 companies until September 11, 2008.

(6) Meanwhile, on November 28, 2007, 12 small and medium enterprises, such as AI Co., Ltd. (hereinafter “12 small and medium enterprises”), among the electric cable operators, revealing that they will not comply with the previous agreement in the 2007 power line purchase tender scheduled to enter into force on the next day from the date of November 28, 2007, the Defendant’s former bid declared that the said tender is between competition, and notified the H Co., Ltd., a large enterprise, of its intention. In fact, the said bid was conducted between 12 small and medium enterprises and 5 large enterprises, etc.

Based on the above facts, this case’s collaborative act is examined as to the completion date of the collaborative act. ① Agreement between the parties on the restriction of successful bid price and trade volume in the sale of goods as in the instant collaborative act, as in the instant collaborative act, leads to the conclusion of a contract for the supply of goods through the bidding process, and the act of the parties who concluded a contract for the supply of goods as in the Defendant, to allocate the successful bid price to the affiliated small and medium enterprises, is merely an internal division of the outcome. ② The instant collaborative act is an agreement on the purchase of various power lines conducted each year from 200 to 2006, and each such agreement is to carry out the same purpose on the basis of a single intention, and it is reasonable to deem that there was an implicit agreement between the electric cable business operators to implement the bid collusion each year, and it is reasonable to deem that the entire agreement was concluded at 200 years after the conclusion of the bidding contract at 200-year 207, 2007.

D. The statutory penalty for the violation of Article 66(1)10 of the Fair Trade Act, which was instituted, is a imprisonment of not more than three years or a fine not exceeding 200 million won. The statute of limitations is three years pursuant to Article 3 of the Addenda of the Criminal Procedure Act (amended by Act No. 8730 of Dec. 21, 2007) and Article 249(1)5 of the former Criminal Procedure Act (amended by Act No. 8730 of Dec. 21, 2007).

According to the records, the day the instant indictment was instituted was completed on September 12, 2007 or July 10, 2013, after three years from November 28, 2007, which was the end date of the instant indictment. Thus, the statute of limitations had already been completed before the instant indictment was instituted.

Therefore, even though the defendant should have been sentenced to a judgment of acquittal pursuant to Article 326 subparagraph 3 of the Criminal Procedure Act, the court below and the first instance court examined the substance of the facts charged, and found the defendant guilty of the facts charged in this case. The court below erred by misapprehending the legal principles as to the termination period of unfair collaborative acts and the statute of limitations, which affected the conclusion of the judgment. The grounds of appeal

4. Conclusion

Therefore, the judgment of the court below is reversed, and this case is sufficient for the Supreme Court to render a judgment, and it is decided directly by Article 396 of the Criminal Procedure Act

The summary of the facts charged in this case is as indicated in Paragraph (1) above, and the judgment of the court of first instance which found the Defendant guilty is erroneous, so the judgment of the court of first instance is reversed and the Defendant is acquitted. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young

Justices Park Young-young

Justices Kim In-bok, Counsel for defendant

Justices Kim Jong-il