[1] Standard for determining circumstances where presumption of agreement on unfair collaborative acts under Article 19(5) of the former Monopoly Regulation and Fair Trade Act can be followed

[2] Whether the presumption of agreement on unfair collaborative acts under Article 19(5) of the former Monopoly Regulation and Fair Trade Act is reversed in a case where a selection company with a high market share under an over-point market structure has set its own price based on an independent decision and then the subsequent purchaser unilaterally imitates it (affirmative in principle)

[3] In a case where the Fair Trade Commission, while setting a penalty surcharge, calculates the sales by including a period other than a violation period, and takes it as the standard for imposing the penalty surcharge, whether the order to pay the penalty surcharge deviates from or abused the discretionary authority

[1] Article 19(5) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315 of Dec. 31, 2004) / [2] Article 19(5) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315 of Dec. 31, 2004) / [3] Article 55-3(1) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315 of Dec. 31, 2004)

[1] Supreme Court Decision 2001Du552 Decided December 12, 2003 (Gong2004Sang, 163) Supreme Court Decision 2004Du7160 Decided October 27, 2006, Supreme Court Decision 2006Du10443 Decided February 29, 2008 / [2] Supreme Court Decision 2000Du1386 Decided May 28, 2002 (Gong2002Ha, 1548) / [3] Supreme Court Decision 200Du6121 Decided May 28, 2002 (Gong202Ha, 1553) (Gong204Du71863 Decided September 22, 2006)

Han River Co., Ltd. (Law Firm Song, Kim & Lee, Attorneys Song Jin-hun et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Doll, Attorneys O Jae- Chang et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Nu14832 delivered on July 20, 2006

Of the judgment of the court below, the part of the corrective order, the part of the order for publication, and each penalty surcharge under the premise that the plaintiff committed an act unfairly restricting price competition in the market for the sales of steel products from March 1, 2002 to May 31, 202 shall be reversed, and the part of the case shall be remanded to the Seoul High Court. The remainder of the plaintiff's appeal shall be dismissed.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

In full view of the adopted evidence, the lower court acknowledged the fact that the domestic steel supply demand in 2002 was 12.3% higher than the previous year due to the increase in the housing zone and the building permit area in 2002, while the total domestic supply was 11,276,000 tons higher than the previous year, and that the total domestic supply was 11,276,000 tons higher than the previous year, and that in 2003, it was anticipated that the excessive supply would be converted into the excessive demand due to the increase in the construction demand due to the economic recovery.

In light of the records, the above fact-finding by the court below is just, and there is no violation of the rules of evidence or incomplete hearing.

2. Regarding ground of appeal No. 2

(1) The court below rejected the following facts: (a) although the part of Gap evidence Nos. 4 through 21 submitted by the plaintiff alone is not sufficient to recognize that each of the above prices of this case was done independently according to the business judgment without any actual agreement or mutual understanding, or that external factors commonly related to the other party's business have no choice but to act identical or similar to the other party's own decision at the same time, or that the leading company's price increase was simply copied at the same or similar time; and (b) there is no other evidence to acknowledge otherwise; (c) in light of the circumstances stated in its holding, even if the company of this case did not reach a specific and explicit agreement on each of the above prices increase, it appears that each of the above cases' price increase was made by using the method of direct opinion exchange through the working group or information gathering, etc., which is an indirect price collection at the market, and even if the plaintiff's employee had never participated in the other company's working-level meetings, etc., it is not a case where the leading company and the leading company did not unilaterally's own market price.

(2) According to Article 19(5) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 7315, Dec. 31, 2004; hereinafter “the Act”), when determining the circumstances in which enterprisers who are presumed to have agreed to engage in unfair collaborative acts may destroy the presumption of agreement on unfair collaborative acts, the determination shall be based on trade norms by comprehensively taking into account the characteristics and status of the market in the relevant product transaction area, the characteristics and mode of the product, the distribution structure, and various and external impacts affecting the market price, the status of each individual company's occupation in the same trade area, the impact of the demand or price change on the individual company's operating profit, market share, etc., in light of the individual business conditions of the enterpriser, the legitimacy of the business judgment, the degree of probability that the mutual agreement may be reached even without consultation, the history of violation of the Act, and the economic policy background at the time of the agreement (see, e.g., Supreme Court Decision 2002Du5676, Dec. 12, 2007).

However, in a case where a selection company with a high market share under an over-point market structure has unilaterally copied the price and then the latter company has unilaterally set the price in light of the market conditions such as previous practice, the presumption of agreement on collaborative acts under Article 19(5) of the Act shall be reversed unless there are special circumstances such as the latter company has predicted that the latter company has set the price and has set the price accordingly (see Supreme Court Decision 2000Du1386, May 28, 2002).

(3) We examine this part of the judgment of the court below in accordance with these legal principles.

(A) The primary price increase

According to evidence duly adopted by the court below, the plaintiff takes a relatively small size of 0.7% as 0 per production capacity of 0.202 and 5.3% as 20 per each of the above domestic steel manufacturing companies with a total of 10.3% as 0 per annum, and the price of 20.0 per annum as 20 per each of the above domestic steel manufacturing companies with a lower-level of 10.20 per annum as 20 per annum and 20 per annum as 20 per annum, and the price of 20 per annum as 20 per each of the above domestic steel manufacturing companies with a lower-level of 0.20 per annum as 20 per annum and 20 per annum as 20 per annum, and the price of 16-6-6 companies with a lower-level of 20 per annum 20 per annum, 20 per annum 26 companies with an exchange rate of 10-6 companies with a lower-level of 20-day domestic steel industries.

Based on the above facts of recognition, the following circumstances, namely, in the first price figures, there is no or very insufficient circumstance that the Plaintiff had exchanged directly with other companies about price figures, such as meetings with other companies in advance, and in the documents stating the suspected prior collusion, the Plaintiff could have known in advance other companies’ price figures through newspapers, etc., and the Plaintiff could have been aware of the fact that the Plaintiff exchanged information related to the steel industry with other companies, but it was treated as not participating in price collusion even though the Plaintiff exchanged information related to the steel industry, as the Plaintiff exchanged information related to the steel industry, it can be deemed that the Plaintiff collected information on the price figures through newspapers, etc., and unilaterally copied it after witnessing the market share of about 87% of the total price figures of other six companies with the market share. Thus, the Plaintiff’s first price discount act is merely an act of merely imitateing the price figures of the selected companies, and thus, it is deemed that the Plaintiff’s act constitutes an unfair collaborative act under this part of the presumption of price existence and existence of the market structure.

Therefore, the court below erred by misapprehending the rules of evidence or by misapprehending the legal principles on the presumption of an unfair collaborative act, thereby adversely affecting the conclusion of the judgment, and the ground of appeal pointing this out has merit.

(B) Parts of the second or fifth price increase

According to the evidence duly admitted by the court below, it is difficult to find out the two separate prices of the plaintiff as of May 27, 2002, and as at the time of the second price increase, the 2nd class instructors, such as the plaintiff, the Han Steel, and the Han River, stated that "the second class instructors, such as the plaintiff, the Han River, and the Han River, apply the accurate unit price of the 27th unit price of the ASEAN," but in fact, the 3rd unit price of the above 2nd class of the 2nd class of the 5th unit price was increased by 0th unit price of the 5th unit price of the 1st unit price and the 3th unit price of the 2nd class of the 2nd class of the 5th unit price, unlike the time of the first class price increase, the 3th unit price of the 2nd class of the 3th unit price of the 2nd unit price of the 3th unit price of the 3th unit price of the 2nd unit price of the 3th unit price.

Therefore, the court below's rejection of the plaintiff's assertion that the presumption of agreement on unfair collaborative acts was destroyed as to the price increase in the second and fifth prices is justifiable, and there is no violation of the rules of evidence, incomplete deliberation, or misapprehension of legal principles as to the destruction of presumption of agreement on unfair collaborative acts, as alleged in the grounds of appeal. Therefore, this part of the grounds

3. As to the third ground for appeal

The plaintiff asserts that the defendant did not regard the time of the plaintiff's violation as March 1, 2002 and deemed the time of the plaintiff's violation as February 18, 2002. However, according to the records, the defendant is aware of the fact that the defendant calculated the plaintiff's related sales and penalty based on the time of the violation as March 1, 2002. Thus, the plaintiff's ground of appeal cannot be accepted.

4. As to the fourth ground for appeal

Article 55-3 (1) of the Act provides that when the Fair Trade Commission intends to impose a penalty surcharge, it shall take into account the details and degree of the violation, the period and frequency of the violation, and the size of profits acquired from the violation. The Fair Trade Commission determines the unfair collaborative act with regard to the period of the violation and the size of profits during the violation, including the period of time during which the violation is committed, and calculates the sales by including the period of time during which the violation is committed, and it is erroneous in recognizing facts which form the basis of the exercise of discretion to impose the penalty surcharge. Thus, the order to pay the penalty surcharge is illegal as it deviatess from and abused discretion (see Supreme Court Decisions 200Du6121, May 28, 2002; 2004Du7184, Sept. 22, 2006, etc.).

As seen above, the presumption of the agreement on unfair collaborative acts with respect to the portion of the Plaintiff’s primary price discount is reversed. As such, each of the instant penalty surcharges order is erroneous in fact-finding, which is the basis of the exercise of discretion to impose penalty surcharges, and thus, constitutes an abuse of discretionary power, and thus, each of the instant penalty surcharges order should be revoked.

5. Conclusion

Therefore, among the judgment below from March 1, 2002 to May 31, 2002, the part of the corrective order, the part of the public announcement order, and each penalty surcharge payment order under the premise that the Plaintiff committed an act unfairly restricting price competition in the sales market of steel products by jointly raising the prices of steel products in the same or similar manner as the prices of the steel products in collaboration with the ASEAN, ASEAN, the East International steel, the Korean Steel, the Han Steel Steel, the Han Steel, and the Cho Young Steel Industries, are reversed, and the part of the case is remanded to the Seoul High Court, and the remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-ran (Presiding Justice)