[1] Requirements to deem that part and all of the enterprisers participating in an agreement on price determination, etc. under Article 19(1)1 of the Monopoly Regulation and Fair Trade Act has terminated unfair collaborative acts

[2] Whether an implied agreement is included in the “agreement on an act of unfairly restricting competition” prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act (affirmative)

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

[1] Supreme Court Decision 2015Du37433 Decided November 23, 2017 / [2] Supreme Court Decision 2001Du1239 Decided February 28, 2003 (Gong2003Sang, 928), Supreme Court Decision 2012Du17421 Decided November 28, 2013, Supreme Court Decision 2016Du31098 Decided December 29, 2016

Hansung (Law Firm LLC, Attorneys Shin Young-chul et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Kang, Attorneys Adjust-chul et al., Counsel for defendant)

Seoul High Court Decision 2015Nu39240 decided June 23, 2016

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

The grounds of appeal are examined.

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

A. In the event that an agreement, such as price determination, etc., as stipulated under Article 19(1)1 of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) and an implementation thereof was conducted, the date on which the unfair collaborative act is terminated” is the date on which the act of implementation based on the agreement is terminated. Therefore, in order to terminate an unfair collaborative act, an enterpriser who participated in the agreement must express or implied declaration of intent to withdraw from the agreement with another enterpriser and reduce the price level that would have existed without the collusion according to his/her independent judgment. In addition, in order to deem that an unfair collaborative act was terminated with respect to all the enterprisers who participated in the agreement, there should be circumstances to deem that each enterpriser who participated in the agreement to have committed an act contrary to the agreement, such as reducing the price level that would have existed without the collusion, or that each enterpriser who participated in the agreement has de facto terminated the collusion through the repetitive price competition, etc. between the enterprisers (see, e.g., Supreme Court Decision 2017Du34375, Nov. 23, 2017).

B. Review of the reasoning of the lower judgment and the evidence duly admitted reveals the following circumstances.

(1) The Sheet Korea Limited Company (hereinafter referred to as "limited company" or "stock company" is both omitted in its name) is the subsidiary of the Shepherler group, which is a research of bending in Germany, and the Korea Escen case is the subsidiary of the Japanese Government Corporation, which is a research of bending in Japan. They are importing the bending for the trial from each head office in Korea and directly producing and supplying it to the demand source. The plaintiff, the manufacturer of bending in Japan, is importing the bending in the trial from the UN, and selling it to the demand source. The plaintiff, the Shepler Korea, the Korea Escen Korea (hereinafter referred to as "three companies such as the plaintiff, etc."), and the Korea Escen Korea case (hereinafter referred to as "three companies") are three high market share in the domestic bending market in the domestic bending market, and the increase in the increase in the domestic market price in Japan from 1, 2, and 3, the plaintiff's domestic increase in the increase in the market price in Japan and Japan.

(2) Since around 1999, three companies, including the Plaintiff, have made an express or implied agreement on the joint maintenance or increase of the price of the pro rataing product for the marketing through the contact of information exchange, etc. and communication among their executives and employees (hereinafter “instant collaborative act”). Specifically, if Korea Es case and Sheet Korea newly prepares GPL for de-marketing around 2002 and raise the price in the manner of revising it in 204 and 2005, the price reduction was jointly made in accordance with the agreement of the Plaintiff.

(3) All three companies, including the Plaintiff, etc., are more imported in a foreign country than manufacturing beering in the Republic of Korea, and Shepherus Korea imports beering on the basis of US US US US US dollars as German companies. On the other hand, the Plaintiff and NANK import and sell beering in Japan in Japan, and thus are likely to affect the foreign currency fluctuation in Japan. In preparation for US dollars and Japan, the exchange rate in 2006 and 2007 drops relatively much.

(4) In preparation for won currency, the Plaintiff reduced the market share by January 5, 2006, April 5, 2006, June 6, 2006, and June 16, 2006.

(5) Meanwhile, around June 2006, Vienna, Japan, the manufacturer of bending products for the sale of the market, retired from the collaborative act on price collusion with three Japanese companies, and reduced the cost of the product by 6%.

(6) On November 2006, SPK reduced the 15% price of the so-called PE item of consultation, which refers to the standard product for bending for marketing at the market.

(7) After that, the Plaintiff further reduced the price of the de-marketing product on the basis of 5% in December 2006, 2007, 3% in June 2007, 3% in total, and 11% in total. Ultimately, the Plaintiff continuously reduced the price of the de-marketing product on the basis of 27% in total from January 2006 to November 2007, and maintained the reduced price situation until April 15.7% in 2008. Meanwhile, with respect to the Plaintiff’s de-marketing price reduction measure, Nonparty 1, the vice-president in Korea, requested the Plaintiff’s non-party 2 team leader to refrain from loweringing the price of the de-marketing product on the basis of the Plaintiff’s price reduction. However, the Plaintiff continued to decrease the price.

(8) An agency dealing with the Plaintiff et al. is not an agency exclusively dealing with the Plaintiff et al., but a non-exclusive agency that sells the marketing of the Plaintiff et al., and the Plaintiff et al. notified the agency and the Vietnaming Federation in writing of the fact of price fluctuation. As such, business entities could have relatively easily known the situation of price fluctuation.

(9) It is difficult to find out the following circumstances: (a) three companies, including the Plaintiff, have taken specific measures for the continuous maintenance and implementation of the agreement; or (b) have discussed and implemented sanctions against the companies that failed to comply with the agreement.

C. Examining these circumstances in light of the legal principles as seen earlier, the following determination is possible.

While three companies including the Plaintiff, etc. engaged in the collaborative act, the Plaintiff began to continuously reduce the price from January 2006, and the Korea E.S. also reduced a considerable amount of price for the PEL products held in consultation after November 2006, and the Plaintiff continuously reduced the price on or after December 2006. As such, the Plaintiff’s price has continuously been reduced for a relatively long period of time. Since the price difference between three companies including the Plaintiff, etc. and the three companies has continued to engage in the price competition, it is reasonable to deem that the 1 collaborative act of this case by three companies including the Plaintiff, etc. was de facto reversed through repeated price competition between the three companies including the Plaintiff, etc. before June 22, 2007. Furthermore, since the amended Fair Trade Act as of June 22, 2012, which was enforced by Act No. 11406, Mar. 21, 2012, it had already been applied as of June 22, 2012.

D. Therefore, although the lower court did not deem that the collaborative act in this case was terminated on or around January 2006 or around November 2007, it was inappropriate for the lower court to have determined that the collaborative act in this case was terminated on or before June 22, 2007, and thus, it was justifiable to have concluded that the five-year extinctive prescription period under Article 49(4) of the former Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012) has expired. In so doing, the lower court did not err by misapprehending the legal doctrine on the termination, etc. of the unfair collaborative act, or by exceeding the bounds of the principle of free evaluation of evidence, contrary to logical and empirical rules.

2. Regarding ground of appeal No. 2

A. “Unfair collaborative act” prohibited under Article 19(1) of the Fair Trade Act includes not only explicit agreement but also implied agreement (see, e.g., Supreme Court Decision 2001Du1239, Feb. 28, 2003). However, it cannot be deemed that there was an agreement as a matter of course on the ground that there was an external appearance consistent with the “unfair collaborative act” listed in each subparagraph of the above provision, and there is proof of the circumstances to recognize the reciprocity of the agreement among the enterprisers. The burden of proof on such agreement is against the Defendant who ordered corrective measures on the ground of such agreement (see, e.g., Supreme Court Decision 201Du17421, Nov. 28, 2013).

B. Review of the reasoning of the lower judgment and the evidence duly admitted reveals the following circumstances.

(1) The three business entities, including the Plaintiff, collected and shared information on the business of other business entities, such as import price, sales price, discount price, sales performance, etc., using opportunities to visit an agency that sells business operators’ marketing marketing, including the Plaintiff.

(2) Three companies, including Shepler Korea and Korea Es. and other marketing chain in the market, were frequently exchanged information on sales performance, including marketing marketing, from August 21, 2005 to August 3, 2011.

(3) In 2008 and 2009, US US dollars and Japan UNCITRA had increased rapidly in comparison with Korean won, and in 2010 and 201, US US US US US US US US US US US US dollars had increased, while Japanese UNCITRA had increased in comparison with Korean won, 15.7% on April 15, 2008, 21% on October 21 of the same year, 15% on December 15 of the same year, 2008, and 16% on December 16th of the same year, 208, and 10% on May 16, 2008, 29% on November 29 of the same year, and 10 or 13% on January 13, 2009 on June 28, 2009. Meanwhile, the Plaintiff raised the price from 19% on May 16, 2008 to 198.

(4) In comparison with the Korean won in 2010, the Plaintiff and the Korean United Nations case and the Plaintiff have the need to increase the price due to the increase in the foreign currency exchange rate in Japan in comparison with the Korean won in 2010. If the price of the Korean United Nations case and the Plaintiff increases the price of the bending for the market, the Shepher Korea would also increase the price in the same manner as that of the Shephering Korea. However, the Shepherherher Korea would not increase the price of the bending for the market and the price of the bending for the market, which was raised by the Plaintiff, were reduced again in 201.

(5) Around July 2011, there is a need to increase the price of the bending in Korea due to the continuous increase in the value of Japan's globalization, and the Plaintiff raised the price of 18% on October 201 and the 16% to 17% on November 201, 201. Meanwhile, a bending Korea raised the price of the bending for the display at a level of 10% on March 201.

(6) The domestic market share of Shepler Korea in the bending market has increased from 25% to 35% between 2009 and 2011, and the 35% to 40% between 2011 and 2012 have increased.

(7) In relation to the price collusion of the pro rata products on the market, the Korean employees made a voluntary report to the Defendant, and the Korean employees stated in the Defendant’s investigation to the effect that “In order to reflect in the price factors in the daily exchange rate, the Plaintiff requested price discount, and the Plaintiff and the Korea EsK made a price set together with the Plaintiff and the Korea EsK.” The Plaintiff’s employees Nonparty 2 also stated in the Defendant’s investigation to the effect that “the Plaintiff made a request for price discount in Korea EsK and promoted a fested price discount to participate in Korea’s price figure.” Meanwhile, even according to the employees and the Plaintiff’s employees’ statements, there was no statement to the effect that She made a request under the price discount in Korea, but there was no statement to the effect that Shep Korea expressed its intent to do so.”

C. Examining these facts in light of the legal principles as seen earlier, it seems insufficient to view that Shepherher Korea was involved in the agreement to jointly maintain or increase the price of the bending product for the marketing from 2008 to 2012 (hereinafter “the second collaborative act of this case”). However, even if it is unclear whether Shepherher Korea participated in the second collaborative act of this case, the grounds for the Defendant’s disposition include that the Plaintiff and the Shepherherher Republic of Korea constituted the second collaborative act of this case. In light of the following circumstances, it is highly likely that the Plaintiff and the Shepherher Republic of Korea were involved in the second collaborative act of this case.

(1) The employees of the NAE make a statement to the effect that “In order to reflect the factors at the rate of exchange rate of Japan, the Plaintiff requested price increase and the Plaintiff and the NANK agreed on the price, and the Plaintiff and the Shepherhers Korea were to be able to win the price,” and the Plaintiff’s employees also make a statement consistent with this. As can be seen, the employees of the NAE made a statement to the effect that “In order to reflect the factors at the rate of exchange rate of Japan, the price increase and the point of time, and the range of increase.”

(2) In fact, the Plaintiff from 2008 to 2012 and the Korea E.S. case’s price increase has continuously been consistent with the external shape of the price fluctuation, such as: (a) the Plaintiff’s price increase at the close time of the month from the time when the Plaintiff made the price increase; and (b) the price increase at the same rate as that of the Korea E.S. case.

(3) Even if there are exchange rate factors, it is difficult to reflect in the price increase in the cost, such as exchange rate fluctuation, in the event that there is a strong competition between the business operators. However, both the Plaintiff and the Korea E.S. case import and deal with the de-marketing from the research on the bending in Japan, and need to easily reflect the factors, etc. in the UN exchange rate compared to the Korean won at the time. Therefore, it can be deemed that there was a significant increase in the price collusion.

D. Nevertheless, the lower court determined that all three companies including the Plaintiff, etc. did not engage in the instant 2 collaborative act on the ground that there are significant differences in the timing, frequency, and increase in the price of bending for three companies including the Plaintiff, etc., and the Plaintiff and the Korea E.S. case’s price increase can be deemed as an act of determining independent sales price by means of the increase in the UN exchange rate compared to won, not due to the collaborative act. In so determining, the lower court erred by misapprehending the legal doctrine on the establishment of unfair collaborative act, thereby failing to exhaust all necessary deliberations.

3. As to the scope of reversal

A. Part of the instant corrective order

Even if the period of extinctive prescription regarding the instant collaborative act No. 1, there may be room for recognition of the instant collaborative act between the Plaintiff and the Korea Es., so the lower court’s conclusion that revoked the instant corrective order was erroneous by misapprehending the legal doctrine on the establishment of the unfair collaborative act, which affected the conclusion of the judgment, shall be reversed.

B. Part of the instant penalty surcharge payment order

As seen earlier, inasmuch as the statute of limitations on the disposition regarding the collaborative act No. 1 of this case is deemed to have lapsed, the defendant shall re-calculated the penalty surcharge in consideration of such circumstances. In this regard, the order to pay the penalty surcharge of this case may not be exempted from all revocation. However, depending on the recognition of the collaborative act No. 2 of this case, whether the penalty surcharge of this case is wholly illegal or partially illegal, or whether the penalty surcharge of this case may be re-taxed. However, on the premise that the entire order to pay the penalty surcharge of this case was illegal, the lower court revoked the entire disposition on the premise that the collaborative act of this case can be recognized, but, on the premise that the entire order to pay the penalty surcharge of this case was illegal, it clearly revealed whether the entire order to pay the penalty surcharge of this case is illegal or only part of the illegal act. Accordingly, since the scope of the binding force of the judgment upon

4. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Seon-soo (Presiding Justice)