[1] The method to determine whether there exists an agreement on an act of unfairly restricting competition, which is prohibited under Article 19(1) of the Monopoly Regulation and Fair Trade Act, where a competitor exchanged information on major competitive factors, such as price, etc.

[2] In a case where Gap corporation, which is an enterpriser manufacturing and selling B, agreed to exchange price information with other manufacturers and sellers to determine the ex-factory price of the product at an identical or similar level by exchanging price information, the case holding that the act of exchanging information itself cannot be acknowledged as an agreement as to the act of immediately determining and maintaining the price

[1] Article 19(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 2013Du16951 Decided July 24, 2014 (Gong2014Ha, 1739)

Seoul High Court Decision 201Na14148 delivered on August 2, 201

Fair Trade Commission (Law Firm Subdivision, Attorneys Lee Jae-sik et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012Nu24223 decided November 8, 2013

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

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

1. Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) prohibits “agreement on an act of unfairly restricting competition,” and such agreement includes not only explicit agreement but also implied agreement. Here, the essence of the agreement lies in the communication between two or more enterprisers. As such, it cannot be deemed that there was an agreement as a matter of course on the ground that there exists an external form consistent with the act listed in each subparagraph of the above provision exists, but it can be deemed that there was an agreement if a circumstance to prove the reciprocity of communication among enterprisers exists (see, e.g., Supreme Court Decision 2012Du17421, Nov. 28, 2013).

In addition, in cases where competition enterprisers exchange information on major competitive factors, such as price, etc., the exchange of such information may serve as a means to facilitate or facilitate collusion by removing uncertainty on decision-making, such as price decision-making, and thus, it may serve as a valuable material to recognize the reciprocity of communication among the enterprisers. However, even so, it cannot be readily concluded that there exists an agreement on an act of unfairly restricting competition solely based on the fact of exchanging the information cannot be determined that there exists an agreement on an act of unfairly restricting competition. The determination of whether there exists such an agreement should be made by comprehensively taking into account all the circumstances, including the structure and characteristics of the relevant market, the nature and content of the exchanged information, the subject and timing of the exchange of the information, the purpose and intent of the exchange of the information, the degree of consistency or difference between the enterprisers such as price and output, etc. after the exchange of the information, the process and details of the relevant decision-making, and other impacts on the market (see Supreme Court Decision 2013Du16951, Jul.

2. (1) If the Plaintiff’s 2-year price increase was based on evidence, the lower court determined that the Plaintiff’s 2-year price increase was based on the same or similar 0-year price increase rate as the Plaintiff’s 2-year price increase by considering the following facts: (1) price increase by 0-year price increase by 2-year price increase by the Plaintiff’s 6-year price increase by 1-year price increase by 0-end price increase by 2-end price increase by 0-end price increase by 2-end price increase by 0-end price increase by 2-year price increase by 1-end price increase by 0-end price increase by 2-year price increase by 0-end price increase by 2-year price increase by 0-end price increase by 2-year price increase by 1-end price increase by 2-year price increase by 3-end price increase by 2-year price increase by 1-end price increase by 2-year price increase by 2-end price increase by 17%.

3. However, we cannot accept the judgment of the court below for the following reasons.

A. The reasoning of the lower judgment and the record reveal the following.

(1) A person who was directly present at the meeting of the representative is the deceased non-party 1 who was the regular director at the time, and the deceased non-party 1, who was discussed at the meeting of the representative directly from the deceased non-party 1, did not have any direct evidence other than the non-party 2 who was the president at the time and the non-party 3 who was the adviser at the business headquarters at the time, and there was no direct evidence containing

(2) The statement written by Nonparty 2 was written by Nonparty 1, who was present at the representative meeting on his behalf, stating that it was “I would not raise the price if I would do so.” The statement was written by Nonparty 2, and that it was written by Nonparty 1, who was present at the representative meeting, and that it was the atmosphere that I would like to raise the price first by raising the price.

(3) In addition, Nonparty 1’s statement stated that, “The representative meeting had no special talks and had a price for 2 to 3 years, the deaf court first raised her fluences.”

(4) If the price increase was made after the so-called “IMF relief finance” in early 1998, the price increase was not made even if the cost increase was made, but the price increase was not made more than three years until the representative meeting. Thus, it seems that the price increase was a pending issue in the industry at the time of the price increase.

(5) Meanwhile, it is the only statement made by Nonparty 4, the third party 4, who attended the meeting directly as direct evidence of the contents discussed at the council. At that time, the minutes of the council include the signatures of other persons, not the signatures of Nonparty 4, and the delegation of Nonparty 4, who delegates all voting rights at the general meeting of the council to Nonparty 5. On the other hand, Nonparty 4 stated in the court of the court below that the proxy may be attached to it. On the other hand, Nonparty 4 stated that the statement made on April 1, 2010 by Nonparty 4, which was written by Nonparty 4, would not memory the contents discussed at the council.

(6) If two companies increase the price at the same time prior to 2001, including the 1980s, which had been leading to the growth of the industry, the remaining companies seem to have followed the price at a similar level. This seems to be closely related to the government's control over the price. The government has held a price-specific consultation with the Plaintiff, which is the first market share of the Plaintiff and the representative product, in a manner setting the upper limit of the price increase.

(7) If the average increase in price for each company at the time of two price increases, the average increase in price was 8.5% to 9.5%. At the time of five price increases, the average increase in price increases was 6.5% to 8.0%, and 11.9% to 13.5% at the time of six price increases. However, at each time of two or six price increases, the factory price of the Plaintiff’s “new,” “Wang,” “Wang,” “Wang,” “Wang,” “Wang,” and “Wang,” but in the case of the Plaintiff, Chin, Chang’s main source product was the main source product, on the other hand, “Wang” and “Wangk lid,” etc.

(8) A competitor as well as the Plaintiff has implemented the Gu’s support. In particular, at the time of the price increase of five prices, the Gu supports the Plaintiff on April 16, 2007 and the 3rd price increase up to May 12, 2007. However, at the time of increase of the price on March 1, 2007, the Gu’s support period was less than 10 days, even though the Plaintiff increased the price on March 1, 2007. In addition, the 3rd, 1st, 204 first, the 50% of the Gu supported the 50% of the Gu.

(9) According to the internal documents of the Republic of Korea, based on the industry and consumer trends in around 2007, it can be confirmed that the period of price increase by up to 2,3 months is delayed compared to the competitor, and that the price policy was reviewed in the direction of enhancing the share of the product and implementing discriminatory price policies for each product. According to the internal documents of the Macuart drawn up in around 2004 and 2005, the Macuart also has established a strategy such as delaying the price increase or supporting the distribution network in response to the competitor’s price strategy.

B. We examine the above circumstances in light of the legal principles as seen earlier. We examine whether the agreement in this case was concluded.

(1) The statement of Nonparty 2 and Nonparty 3, the evidence of the instant agreement, is not correct as the statement is a professional statement, and the contents discussed in the circumstances of the representative meeting are not accurate. As such, the possibility that there was only an atmosphere to see that the Plaintiff would have led the price increase in the situation where the price was not raised for a long time, and the possibility that the Plaintiff would have led the price increase in the first place. In addition, it is difficult to specify the content of the agreement in addition to the fact that there was a difference between the average price increase in the prices for each company and the price increase in 201.

(2) In addition, since Nonparty 4’s statement, the only direct evidence about the contents discussed at the Council, is likely not to have been directly experienced, it is difficult to fully grant credibility.

(3) Therefore, even if there was an agreement on one price basis, it is unclear, and it is difficult to view that there was a clear agreement that may affect competition in the long term, and thus, it does not constitute an explicit agreement that serves as the basis for the exchange of information in the future. Therefore, it cannot be immediately deemed that there was an agreement on the subsequent information exchange and each price discount, and it cannot be deemed that there was an extension of the agreement in the future, and it cannot be said that an implied agreement was reached solely on the mere information exchange. Therefore, the formation of the agreement in this case can be recognized where the mutuality of each communication with respect to the agreement in this case 2 through 6 can be proved.

(4) However, as seen below, it is possible to sufficiently explain the inducement, etc. of an agreement without premised on the agreement, and some circumstances seem to go against the act of a business entity that is difficult to be compatible with the agreement or the existence of the agreement. The average discount rate for each business entity’s price is somewhat different, and it is unclear whether “in the external form of agreement” can be recognized as being identical because the average discount rate for each business entity is somewhat different, and the upper limit of the price of each individual product is diverse. In this regard, it is insufficient to accept mutual communication of the Plaintiff, etc. on the two to six prices, considering the evidence on exchange of each information as well as other materials submitted by the Defendant as evidence of the agreement on the two to six prices.

① Since before 2001, there have been long-standing practices for competitors to increase their prices by drilling their prices. Since the price has been set as a whole in 2001, if the Plaintiff’s leading price was raised according to the previous practices, it would be sufficient for other enterprisers to raise their prices by referring to this. Thus, it is difficult to view that the Plaintiff, etc., at least 2 through 6 prices, had a separate incentive to enter into an agreement.

② While the Government’s price control was imposed upon the Plaintiff’s competitors, it would be reasonable choice for the Plaintiff to make a reasonable choice according to the price level that the Plaintiff has consulted with the Government, and the Plaintiff would have been sufficiently expected to do so. Since the other party to the Government’s price discount was the Plaintiff, it cannot be deemed that the Plaintiff was based on the agreement that the price was first raised. In addition, considering the long-term practice of the price trend, the Plaintiff, as the Plaintiff, whose market share reaches 70% after the success on the price index, has reached an agreement on drilling separately with the competitors after 2001. Therefore, it is difficult to deem that there was a need for the Plaintiff, etc. to use the means of “agreement” in order to form the price in the form of leading the Plaintiff and conjecting it by other entrepreneurs.

③ It is difficult to view that even if the Plaintiff was the first business owner of the market share and the Plaintiff had a prior experience in market share, the long-term price collusion, which would lead to the enhancement of the existing market share, has led to the increase in the market share.

④ It seems difficult to conclude that an agreement is made to determine the price for each item or to scood by item because of the very diverse types of products. In particular, it is difficult to deem that the scood’s main product was not “scood” and thus, there was an agreement between the Plaintiff, etc. to accept the delivery price of the main product.

⑤ Not only the Plaintiff, but also other enterprisers may be seen as difficult circumstances if there was an agreement, such as delaying the price increase time in response to the competitor’s price strategy or providing various support, such as support by the Gu for the distribution network. Although the Gu’s support may be used as a means of maintaining or suppressing collusion, it may be used as a means of active mutual competition at the same time, and the effect of increasing uncertainty may be the means of hindering the maintenance of collusion.

(5) The Plaintiff, etc. exchanged various information including long-term price information and reflected it in their decision-making can be deemed to have the effect of restricting competition. However, apart from whether an agreement on information exchange under the Fair Trade Act can be applied to unfair collaborative act, it cannot be acknowledged as an agreement on the act of immediately determining and maintaining the price itself.

(6) If so, it is difficult to conclude that the agreement of this case or at least the agreement of this case 2 through 6 existed between the plaintiff et al.

4. Nevertheless, the lower court determined otherwise that the agreement of this case 1 and the agreement of this case 2 through 6 was recognized. In so doing, it erred by misapprehending the legal doctrine regarding the establishment of an unfair collaborative act, by exceeding the bounds of the principle of free evaluation of evidence and logical and empirical rules, or by failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal assigning this error is with merit.

5. Therefore, without examining the remaining grounds of appeal, 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 Jo Hee-de (Presiding Justice)