Public notice of detailed guidelines, etc. for the imposition of penalty surcharges, which provides for the increase of penalty surcharges in cases where a violation business operator or an executive officer or employee thereof refuses, interferes with, or evades an investigation into a violation, shall be imposed. b. (4) The legal basis and legal nature of (i.e., discretionary rules) / Whether the above public notice provision should be respected as much as possible (affirmative)

According to the language, content, and system of Article 5-3(1) and (5) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 14813, Apr. 18, 2017); Article 61(1) [Attachment 2] subparag. 2(c) and subparag. 3 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 27034, Mar. 8, 2016); and Article 61(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 27034, Mar. 8, 2016); the Monopoly Regulation and Fair Trade Act provides for the grounds necessary for calculating penalty surcharges on a comprehensive and exceptional basis; and the specific consideration and detailed criteria are delegated to the notification of the Fair Trade Commission. It is also understood that the Fair Trade Commission’s announcement of the detailed criteria for imposing penalty surcharges (Amended by Act No. 2013-2, Jun. 5, 2013).

Meanwhile, the Fair Trade Commission has the discretion to determine whether to impose penalty surcharges and the amount of penalty surcharges within the scope of the maximum penalty surcharge under the Monopoly Regulation and Fair Trade Act. The foregoing notification provision is an internal administrative agency’s discretionary rule, i.e., discretionary rule, which is formulated based on the exercise of discretionary power with respect to the calculation of penalty surcharges. Such discretionary rule should be respected as much as possible, insofar as it is not recognized that the standard does not conform with the Constitution or laws or that it

Article 55-3(1) and (5) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 14813, Apr. 18, 2017); Article 61(1) [Attachment Table 2] subparag. 2(c) and 3 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (Amended by Presidential Decree No. 27034, Mar. 8, 2016)

Supreme Court Decision 2016Du35199 Decided January 12, 2017 (Gong2017Sang, 385)

Tyang Industries Co., Ltd. (Attorney Hong-soo et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Government Law Firm Corporation, Attorneys Park Si-hwan et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2016Nu53069 decided January 12, 2017

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Legal grounds for the increase of penalty surcharges on the ground of obstruction of investigation (ground of appeal No. 2)

A. Article 55-3(1) of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 14813, Apr. 18, 2017) provides that when imposing a penalty surcharge, “the details and degree of the violation (Article 1), the period and frequency of the violation (Article 2(1)), and the size, etc. of profits acquired from the violation (Article 55-3(1) shall be taken into account.” Paragraph (5) provides that the criteria for imposing a penalty surcharge under paragraph (1) shall be prescribed by Presidential Decree.

Article 61 (1) [Attachment 2] 2 of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 27034, Mar. 8, 2016) provides that "A penalty surcharge shall be calculated in consideration of the grounds for and effects of the subparagraphs of Article 55-3 (1) of the Act, on the basis of the calculation standards of penalty surcharges, on the basis of the calculation standards based on the type of violation, after adjustment according to the period, frequency, etc. of the violation, and on the basis of the intention or negligence, etc. of the violator, the calculation standards of penalty surcharges shall be calculated after adjustment according to the calculation standards based on the type of violation," and (c) provides that "the second adjustment (hereinafter referred to as "second adjustment") following the intention or negligence, etc. of the violator enterpriser affecting the matters falling under each subparagraph of Article 55-3 (1) of the Act shall be adjusted in accordance with the standards determined and announced by the Fair Trade Commission within 50/100 of the adjusted calculation standards, in consideration of the nature and circumstances of the violation."

According to the language and text, contents, and structure of such statutes, the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) provides for the grounds necessary for calculating penalty surcharges comprehensively and specifically, and the specific considerations and detailed standards are delegated to the public notice by the Fair Trade Commission. The provision that the Fair Trade Commission provides for the aggravated grounds for secondary adjustment in the former Public Notice on the Detailed Standards, etc. for Imposition of Penalty Surcharges (Amended by Act No. 2013-2, Jun. 5, 2013) (hereinafter “instant Public Notice Provisions”) provides for the provision that “if an offender or an executive officer or employee thereof refuses, interferes with, or evades an investigation into a violation,” is based on the provision and delegation of the aforementioned statutes.

Meanwhile, the Fair Trade Commission has the discretion to determine whether to impose penalty surcharges and the amount of penalty surcharges within the scope of the maximum penalty surcharge under the Fair Trade Act. The instant notification provision is a discretionary rule, i.e., the administrative agency’s internal administrative rules established based on the exercise of discretionary authority regarding the calculation of penalty surcharges. Such discretionary rules should be respected as much as possible, insofar as it is not deemed that the standards are inconsistent with the Constitution or laws or that such standards are not objectively reasonable and thus are abused discretion (see Supreme Court Decision 2016Du35199, Jan. 12, 2017).

B. The lower court determined as follows. The Fair Trade Act provides that the Fair Trade Commission may consider additional factors necessary to achieve the purpose and purpose of the penalty surcharge system by comprehensively prescribing the grounds to be considered when calculating a penalty surcharge without limiting the grounds to be considered in light of the foregoing. The Defendant, in calculating a penalty surcharge within the statutory maximum scope, determined the standards to consider the act of interference with investigation as a mitigated element, cannot be deemed null and void as a regulation without legal basis, even if the provision of the instant notice was deleted thereafter.

In light of the aforementioned legal principles, the lower court did not err by misapprehending the legal doctrine on the legal basis of the increase of penalty surcharges on the grounds of just investigation obstruction.

2. Whether the Plaintiff’s obstruction of investigation constitutes an aggravated violation (Ground of appeal No. 1)

(a) Recognition of interference with investigation;

For the following reasons, the lower court determined that the Defendant did not err in recognizing the Plaintiff’s interference with the investigation. The instant notification provision only provides that “In cases where a violator business entity or its executives or employees refuse, interfere with, or evade the investigation of a violation,” and does not require the result of interference with the investigation. In addition to the acts of obstructing the investigation in recognizing interference with the investigation under the said provision, the actual results of interference with the investigation need not be generated.

In light of the relevant legal principles and records, the lower court determined that the circumstance to determine whether the investigation interfered with the investigation is not a ground for disposition related to the establishment of an offense subject to penalty surcharges, but a discretionary consideration for calculating the specific amount of penalty surcharges. In so doing, the lower court did not err by misapprehending the legal doctrine regarding the elements for establishing the obstruction of investigation as the ground for disposition and the

(b) Aggravation and increase ratio of penalty surcharges;

The lower court determined as follows. In comparison with the seriousness of the case, the Defendant’s application of 10% increase rate for the obstruction of investigation by Han Cement Co., Ltd. among the instant enterprisers, and the application of 20% increase rate for the obstruction of investigation by the Plaintiff is not unlawful. The Plaintiff’s act of obstruction of investigation, which is more illegality than the Plaintiff’s act, is imposed only on the Plaintiff’s act of obstruction of investigation, and is not subject to the aggravated provision for obstruction of investigation, is different from the case’s specific facts. It is difficult to recognize that the administrative practice binding on the Defendant as to the failure to apply aggravated provision for obstruction of investigation solely on the ground that there are some cases of partial decisions different from the judgment by the Defendant, has been established. It is insufficient to recognize that the Defendant arbitrarily treated

Examining the relevant legal principles and records, the lower court did not err by exceeding the discretionary authority regarding whether to increase penalty surcharges on the ground of interference with investigation and the application of the aggravated rate.

3. Conclusion

The Plaintiff’s appeal is dismissed as it is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Dong-won (Presiding Justice)