Revocation, such as 2013Nu21634 Corrective Order

Daedong Industrial Co., Ltd.

Fair Trade Commission

April 29, 2015

June 10, 2015

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s corrective order and penalty surcharge payment order in the attached Form No. 2013-120 issued by the plenary session Resolution on June 27, 2013 are revoked.

1. Facts recognized;

A. Status of the plaintiff, etc.

The plaintiff and the International Comprehensive Machinery Co., Ltd. (hereinafter referred to as the "Co., Ltd. in the case of a corporation for convenience") fall under the business operators provided for in subparagraph 1 of Article 2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Fair Trade Act") as a corporation whose business purpose is manufacturing, selling, etc. agricultural machinery.

(b) Characteristics and current status of the agricultural machinery market;

(1) The demand for agricultural machinery is a farmer whose income level is relatively low. Accordingly, the domestic agricultural machinery market has a greater impact on the government policy, such as the provision of funds for purchasing agricultural machinery than the general market principle. The agricultural machinery is not easily replaced by human resources, livestock, etc., and the demand for the change of competition or price is low.

(2) The production of agricultural machinery is highly seasonally heavy due to the characteristics of agricultural production that is greatly affected by season, and the production of agricultural machinery requires various kinds of agricultural machinery according to the specific contents of the work for production or crops. Accordingly, the manufacturing industry of agricultural machinery has the characteristics of ‘multi-variety small quantity production' in general.

(3) In order to engage in manufacturing and selling agricultural machinery, a nationwide distribution network and post-management network should be established. Moreover, consumers need considerable time and investment until the brand value is formed by strong tendency to preference existing brands more favorable in terms of quality guarantee and heavy sales. Accordingly, it is relatively difficult for a new business entity to enter the domestic agricultural machinery market.

(4) As of September 30, 201, the manufacturing and selling company of domestic agricultural machinery is estimated to have approximately 436 items.

However, most small and medium enterprises are participating in the markets of small machinery or parts, such as sloping machines, etc., and major types of machinery, such as Trackers, ems, and compacters (hereinafter referred to as the "agricultural machinery of this case") are forming an excessive market structure that leads large enterprises such as the plaintiff to manufacture and sell.

(5) There is no significant change in the share of the domestic agricultural machinery market for the last ten years based on the sales. In 209 and 2010, the total market share of the Plaintiff and the International Comprehensive Machinery Products and LSMM LSMs (hereinafter referred to as “the instant four agricultural machinery manufacturers”) reached about 67%. In addition, the total of the market share of the four agricultural machinery manufacturers of the instant four agricultural machinery manufacturers based on the sales channel of the National Agricultural Cooperative Federation of 201 (hereinafter referred to as “CF”) was about 89% in the case of Tracter, about 66% in the case of EM, and about 75% in the case of Machan.

(6) As the global agricultural machinery market is hard to increase grain production such as China, India, etc., the annual average of about 5,3% has increased since 2005, and it is anticipated that the market size will be expanded in the future. The domestic agricultural machinery manufacturing industry has sought aggressive marketing strategies in line with this, and export of agricultural machinery continues to increase.

(c) Distribution structure of agricultural machinery and appliances;

(1) The method of distributing agricultural machinery in the domestic agricultural machinery market is divided into ① distribution through an agency for manufacturing agricultural machinery, ② distribution through agricultural cooperatives, ③ distribution through procurement contracts, etc. However, the proportion of distribution through procurement contracts falls short of 1%, and in fact, distribution through an agency for manufacturing agricultural machinery (80%) and distribution through agricultural cooperatives (20%) can be divided into approximately 1%.

(2) The distribution through agricultural cooperatives shall be divided into (1) distribution through the system business, (2) distribution through the system business, and (3) distribution through the leasing business.

(A) When the Agricultural Cooperative Co., Ltd. entered into a contract at the end of the preceding year or at the beginning of the pertinent year after having entered into a contract at the price for agricultural machinery type or model (not including purchase volume), it is a distribution method in which the manufacturer of agricultural machinery supplies agricultural machinery to the agricultural cooperative in the relevant region and receives the price in accordance with the unit price agreed in advance from the agricultural cooperative. System companies and businesses were conducted to supplement vulnerable bargaining power of the agricultural cooperative or individual farmer. However, in 201, there was no narrow difference between the agricultural cooperative and the four manufacturers of the instant agricultural machinery in relation to the price of the instant agricultural machinery, and thus no system contract was entered into in the instant case. (b) The agricultural cooperative Co., Ltd. purchased agricultural machinery in a lump sum from the manufacturing of the agricultural machinery and supplied the agricultural machinery to the agricultural cooperative through the agricultural cooperative in lieu of the agricultural cooperative. In addition to the purchase price of the agricultural machinery in advance, each of the agricultural machinery is determined not only in the quantity of the agricultural machinery, but also in the agricultural cooperative and the agricultural cooperative.

(C) Where agricultural cooperatives entered into a unit price contract for agricultural machinery manufacturing through open competitive bidding for the previous year or at the beginning of the corresponding year, and then the local agricultural cooperatives purchase the relevant agricultural machinery at the unit price set forth in the above contract and lease it to farmers for compensation if there is demand in the agricultural cooperatives, the rental business is a distribution business that purchases the agricultural machinery at the unit price set forth in the above contract. The rental business began from 2008 to reduce the burden of purchasing agricultural machinery and to increase the rate of agricultural machinery and equipment.

(d) Price structure of agricultural machinery;

(1) In the case of agricultural machinery and equipment eligible for subsidization of purchase funds, the Government made self-regulation by means of reporting the price of the agricultural machinery and equipment from October 1, 198 to October 1 every year ( January, April, July, and October). However, until December 31, 2010, the Ministry of Agriculture and Forestry made the manufacturer of the agricultural machinery to report the price directly or directly through the Korea Agricultural Machinery and Industry Cooperatives (hereinafter referred to as the “Korea Agricultural Machinery and Industry Cooperatives”) or to the Ministry of Agriculture and Forestry by December 31, 2010, it is difficult to deem that the full self-regulation was made since the government made its determination of its propriety and approval. On January 1, 2011, the price fluctuation system requires approval from the Ministry of Agriculture and Forestry was abolished and approved by the Ministry of Agriculture and Forestry (the Association has the substantial meaning of self-regulation policies on the agricultural machinery and equipment in order to obtain the price fluctuation data from the manufacturer of the agricultural machinery and equipment and to calculate and deliver them at the average price).

(2) The value of agricultural machinery shall be divided into the base price, contractual unit price, and actual supply price for each stage.

(a)The price of the agricultural machinery subject to government procurement funds reporting to the Ministry of Agriculture and Forestry by the manufacturer of the base price is not only the basis for calculating agency sales price and the agricultural cooperative sales price, but also the basis for calculating the limit of government procurement funds. The base price shall be included in the agricultural machinery price collection issued by the agricultural machinery cooperative once a half year.

(B) The amount calculated by deducting sales agents for agricultural machinery or the distribution margin of agricultural cooperatives from the contractual unit price. The distribution margin of agricultural machinery and equipment research, which serves as the basis for calculating the contractual unit price, was about 7% until 2006, but was replaced by approximately 10% since 2007.

(C) The supply price of agricultural machinery is the price actually supplied to agencies for the sale of agricultural machinery or to the agricultural cooperative. The agricultural cooperative agrees to the payment rate of sales incentives (hereinafter referred to as “sales incentives”) through individual consultation and coordination before the manufacture of agricultural machinery and the conclusion of the system contract in the corresponding year.

E. The Defendant’s disposition (1) issued on June 27, 2013 by the plenary session’s resolution (2013-120) to bring an accusation against the Plaintiff to the prosecution, on the ground that the Plaintiff violated Article 19(1)1, 4, and 8 of the Fair Trade Act by engaging in unfair collaborative act as set forth below (hereinafter “instant collaborative act”) in manufacturing the agricultural machinery of this case.

(A) On November 27, 2002, from November 27, 2002 to September 4, 2011, the instant agricultural machinery manufacturers exchanged information about whether to increase the reported price and the increase in the price before reporting the price of the instant agricultural machinery on a quarterly basis, and determined the price proposal to be reported by the company (hereinafter “the instant agricultural machinery manufacturers”).

(B) On December 5, 2003 through March 22, 2011, the manufacturers of the instant agricultural machinery discussed whether to accept the proposal for the subsidy rate proposed by the agricultural cooperative prior to individual consultation with the agricultural cooperative on the subsidy rate set each year while participating in the instant agricultural machinery system projects managed by the agricultural cooperative. Each of the manufacturers exchanged information on the subsidy rate proposed by the agricultural cooperative to be offered to the agricultural cooperative, and entered into an individual negotiation with the agricultural cooperative (hereinafter referred to as "the 10-year subsidy rate collaborative act"). (c) On January 7, 2011, the fourth agricultural machinery manufacturers of the instant 201 agreed on the 201-year subsidy rate agreement with the agricultural cooperative (hereinafter referred to as "the 20-year subsidy rate collaborative act"). In the event the agricultural cooperative did not accept the 21-year subsidy rate increase agreement on the agricultural machinery of the instant case, the 21-year subsidy system renewal agreement with the 201-year agricultural cooperative agreement was not reached.

(D) On March 28, 201, the instant 4 agricultural machinery manufacturers agreed that agricultural cooperatives would not participate in the business promoted on behalf of the instant agricultural machinery manufacturers (hereinafter “the instant 4 agricultural machinery manufacturers”).

(E) Since 2010, agricultural cooperatives conducted rental business for new agricultural machinery, and consulted with manufacturers of agricultural machinery and supply prices, but the negotiations had been conducted on the reduction rate. Accordingly, agricultural cooperatives changed the purchase method of agricultural machinery from a negotiated contract to a competitive bidding method. Accordingly, agricultural cooperatives agreed to (i) bid price in advance in order to encourage bidding in the case of 2010 and not to participate in bidding or bidding in the case of 2010, and (ii) in the case of 2011, the bid price was determined in advance by the specifications of the agricultural machinery of this case, which was referred to the bid, and agreed to bid price bidding by research method (hereinafter referred to as “rental bid for rental business”).

(F) On December 9, 2009 to September 6, 201, the instant four agricultural machinery manufacturers agreed to increase the price of agricultural and fishery products supplied to the agency for repair or replacement at the same price, and at the same time they carried out (hereinafter referred to as “the instant four agricultural machinery manufacturers”).

(2) The calculation details of penalty surcharges imposed by the Defendant on the Plaintiff are as follows.

(A) Relevant sales amounting to KRW 1,532,88,000,00 (i.e., sales amounting to KRW 1,295,759,000,000 related to the reported price collaborative act + sales amounting to KRW 207,018,00,000 related to the collaborative act of rental business bid + sales amounting to KRW 25,298,000,000 related to the collaborative act of rental business bid + imposition rate of KRW 4,813,00,000 related to the price collaborative act of rental business

(a) Collaborative act with reported price: 2% (limited to a violation with weak gravity);

(b) Collaborative act with a subsidy rate: 2% (limited to a violation with a heavy relative nature);

(c) Collaborative act in leasing business and collaborative act in different bidding prices: 7% (any substantially contrary act); and

(C) Coordination by an element of the actor

(i) Reduction taking into account active cooperation in investigations: 30 percent for each offence;

2) Reduction in consideration of administrative guidance: 20% for collaborative acts of reported prices;

(d) A reduction by taking into account the current status of the domestic agricultural machinery market for additional adjustment: 50% for each violation.

(e) Final Imposition Penalties of KRW 8,663,00,000

[Reasons for Recognition] No. 1, Gap's evidence and the purport of whole pleadings

2. Determination as to the existence of the reasons for the disposition

A. As to the existence of reasons for the action of the reported price collaborative act

(1) Summary of the Plaintiff’s assertion

(A) A collaborative act conducted by the manufacturers of agricultural machinery of this case relating to the reported price under Article 19(1)1 of the Fair Trade Act does not constitute "the act of determining, maintaining, or changing the price prohibited under Article 19(1)1 of the Fair Trade Act for the following reasons."

1) The instant manufacturing of agricultural machinery did not have any authority to actually determine, maintain, or change the price of the instant agricultural machinery due to strong price control by the Ministry of Agriculture and Forestry. Since the instant manufacturing of agricultural machinery was merely a recommendation or reference for price guidelines set by the Ministry of Agriculture and Forestry, the instant manufacturing of the agricultural machinery was not subject to the “act” under Article 19(1)1 of the Monopoly Regulation and Fair Trade Act.

2) The information exchange and agreement on the price of the agricultural machinery of this case was made in the course of reporting the price proposal to the Ministry of Agriculture and Forestry, and the manufacture of the agricultural machinery of this case was notified by the Ministry of Agriculture and Forestry of price guidance, and submitted it to the Agricultural Machinery Cooperative.

3) The manufacturing of the instant agricultural machinery is merely a co-operation between the government with the right to make a decision by exercising the right to petition guaranteed by Article 26(1) of the Constitution to lead more favorable policies from the government with the right to make a decision.

(B) Whether competition limit and illegality are recognized

Even if the collaborative act related to the manufacturing price of the agricultural machinery of this case constitutes an agreement on the price prohibited under Article 19(1)1 of the Fair Trade Act, the restriction of competition and the illegality thereof are not recognized for the following reasons.

1) Since the Ministry of Agriculture and Forestry strongly controlled the price of the agricultural machinery in this case, it cannot be deemed that the collaborative act of the manufacturer of the agricultural machinery in this case causes or is likely to cause competition restriction effect. Rather, the price of the agricultural machinery in this case was stable through the collaborative act of the manufacturer of the agricultural machinery in this case and the efficiency of overall economy was increased, such as the activation of financing projects for the purchase of the agricultural machinery. (ii) The Ministry of Agriculture and Forestry separately set the price increase guidelines by using price control authority, and most of the returned dutiable values of the manufacturing of the agricultural machinery in this case were not accepted. Accordingly, it is difficult to recognize a substantial causal relationship between the collaborative act in relation to the reported price and the maintenance or change

(C) Whether the act constitutes a legitimate act

The pertinent collaborative act is merely based on strong administrative guidance of the Ministry of Agriculture and Forestry with respect to the manufacturing price of the agricultural machinery of this case, and thus constitutes a legitimate act stipulated in Article 58 of the Fair Trade Act.

(2) Determination

(A) As to whether Article 19(1)1 of the Fair Trade Act constitutes Article 19(1)1

1) “Price” in an agreement on the price prohibited by Article 19(1)1 of the Fair Trade Act means any kind of payment made by the counterparty for the price of goods or services in light of the characteristics of the relevant goods or services, the details and methods of the transaction, etc. (see, e.g., Supreme Court Decision 2012Du17773, Nov. 28, 2013). In such cases, the agreement on the price is not limited to the final transaction price itself, but also an act that may directly or indirectly affect the determination, maintenance or change of such price.

2) However, considering the facts acknowledged earlier and the Plaintiff’s 1, 25-27, 29, 30, 37, 39, 41, 44, 46, 50, 54, 56-60, 63, 64, 66-68, 71, 77, 82, 86, 88, 89-183, and 185 (hereinafter “this case’s 3rd price increase guidelines”), the Defendant’s assertion that the Plaintiff’s 1’s 3rd price agricultural machines price increase guidelines were inconsistent with the Plaintiff’s 1’s 3rd price declaration guidelines, and that the Plaintiff’s 1st price increase guidelines were inconsistent with the Plaintiff’s 1st of the 1st of the 1st of the 3th of the 1st of the 3th of the 1st of the 3th of the 1st of the 3th of the 1st of the 1st of the 3th of the 1st of the 1st of the 1st of the 3th of the st of the st of the agricultural machinery.

B) The reported price of the manufacturing of the instant agricultural machinery is a premise for the determination of the base price of the instant agricultural machinery, and the base price is a basis for the agency sale price and the calculation of the sales price of agricultural products. Therefore, it is clear that the reported price constitutes “price prohibited by the agreement under Article 19(1)1 of the Fair Trade Act.”

C) Even if the manufacturing price of the instant agricultural machinery was submitted, the fact that the price was increased or even reduced compared to the initial intention without obtaining approval from the Ministry of Agriculture and Forestry until December 31, 2010 when the dutiable value return system was implemented. However, in full view of the statements, etc. of the persons involved in the collaborative act in the dutiable value return, it is determined that the manufacturing of the instant agricultural machinery could have autonomously determined the price within the scope of not exceeding the guidelines set by the Ministry of Agriculture and Forestry in consideration of the inflation rate in most products. The evidence alone is difficult to recognize that the manufacturing of the agricultural machinery of this case did not have the authority to determine, maintain, or change the price of the instant agricultural machinery.

D) When comprehensively considering the statements of the persons involved in the collaborative act of price declaration and the various internal documents of the manufacturer of the agricultural machinery of this case, the manufacturer of the agricultural machinery of this case, as alleged by the defendant, can fully recognize the fact that the manufacturer conducted the collaborative act of price declaration by sharing detailed information about the reported price that it is difficult to collect through normal information collection activities in the market through various means, such as meetings of the executive officers in charge of the business, meetings of the head of the business department, meetings of practitioners, e-mail, etc., by type of the agricultural machinery of this case, and plans on whether to increase the reported price and the increase rate of price

On the other hand, the plaintiff asserts that there is no agreement on the price of the agricultural machinery of this case after the Ministry of Agriculture and Forestry established the price guidelines for the agricultural machinery of this case on the following grounds: (1) there is no agreement on the appearance of the report price collaborative act; and (2) there is no agreement on the price of the agricultural machinery of this case after the establishment of the price guidelines for the agricultural machinery of this case.

However, even though the manufacturer of the agricultural machinery of this case does not fully match the base price fluctuation trends for the agricultural machinery of this case, considering the characteristics of the manufacturer of the agricultural machinery of this case, the manufacturer of the agricultural machinery of this case does not seem to have obvious external disagreements to the extent that it would deny the existence of the collaborative act. Furthermore, even if part of the manufacturer of the agricultural machinery of this case did not carry out the agreement, as seen earlier, as long as the existence of the agreement is recognized, it does not affect the establishment of the collaborative act. Next, A, an employee of the agricultural machinery association, was present as a witness of a lawsuit seeking cancellation, such as penalty surcharge surcharge surcharge surcharge 2013Nu45876 on January 17, 2014, and an employee of the agricultural machinery association was present at the meeting of the agricultural machinery of this case on June 3, 2008, as an employee of the agricultural machinery association of this case, at the meeting of the 20th members of the agricultural machinery association, it is difficult to view the increase rate of increase in the price of the agricultural machinery of 20.

E) In around 2001, as the cooperation system between the manufacturers of agricultural machinery and industry has been collapsed and competition has deepened such as price discounts while making strategic alliances, it seems necessary to take measures to avoid price competition since 2002 as well as the manufacture of the agricultural machinery in this case. In addition, considering the role of the reported price as seen earlier, the role of the price change in the price, the ability of the demand for agricultural machinery to change the price, the possibility of a new business operator’s entry into the agricultural machinery market, etc., the motive or inducement of the reported price collaborative act may also be sufficiently recognized.

F) The instant agricultural machinery manufacturers, such as the exchange or collection of information that would normally be acceptable in the market, share repeatedly information that directly affects the determination of the base price for each type or model of the agricultural machinery of this case for a long time, and furthermore, have reached an agreement on the reported price. Furthermore, following the enforcement of the recommended price scheme, the collaborative act continues until September 5, 201, which was after January 1, 201 when the procedure for approving the reported price by the Ministry of Agriculture and Forestry was abolished. Considering such circumstances, it is difficult to deem that the collaborative act was derived from a legitimate intent to lead policies favorable to the manufacturing of the agricultural machinery of this case, by affecting the Ministry of Agriculture and Forestry with respect to the price of the agricultural machinery of this case. Rather, the instant agricultural machinery manufacturers cannot be deemed to have exercised the right to participate in the collaborative act, which is guaranteed under the Constitution, in order to minimize mutual competition and achieve stable profits by accomplishing their desired prices.

(B) As to whether competition limit and illegality are recognized

1) Whether a collaborative act has a limitation on competition under Article 19(1) of the Fair Trade Act should be determined by examining whether the collaborative act causes or is likely to cause impacts on the determination of price, quantity, quality, and other terms and conditions of trading due to the reduction of competition due to the collaborative act, taking into account various circumstances, such as the characteristics of the product in question, consumer selection criteria, and the impact on the market and enterprisers on the competition. Furthermore, the illegality of the collaborative act should be determined by taking into account the following as a whole: (a) the restricted outcome of competition that may arise from the collaborative act; and (b) the specific effects of the collaborative act, including the impact on the overall economic efficiency (see, e.g., Supreme Court Decision 2012Du1773, Nov. 28, 2013). However, an act of jointly determining or changing the price of the enterpriser in question, within the scope of price reduction, which causes or is likely to cause impacts on the free price determination according to its intent. Therefore, a special collaborative

Unless there exist any circumstances, it is inevitable to view that it is unfair (see Supreme Court Decision 2008Du21058, Mar. 26, 2009).

2) However, comprehensively taking account of the facts acknowledged earlier and the following circumstances revealed by the evidence cited above, the restriction and illegality of competition in the reported price collaborative act can be sufficiently recognized. The Plaintiff’s assertion on this part cannot be accepted.

A) It is not easy for a new business entity to enter the domestic agricultural machinery market because of low demand carbon capabilities for price changes, and strong tendency for consumers to preference existing brands. In addition, considering the specific contents and period of collaborative acts with the reported price, market share of the manufacturing of the agricultural machinery of this case, etc., the manufacturing of the agricultural machinery of this case could have obtained a competitive result, such as reducing mutual price competition with respect to the agricultural machinery of this case through collaborative acts with the reported price.

B) As seen earlier, the manufacturing of the instant agricultural machinery could autonomously determine the price of the instant agricultural machinery to the extent that it does not go against the Ministry of Agriculture and Forestry’s pricing guidelines, and the reported price of the instant agricultural machinery manufacturers became the premise for determining the base price. Therefore, the circumstances asserted by the Plaintiff and the evidence presented by the Plaintiff alone cannot be deemed as having been determined at the same level as the case where the price of the instant agricultural machinery was not the same as the case where the reported price collaborative act had been

C) It is difficult to recognize a special circumstance that denies the illegality, such as where the submitted evidence alone increases the economic efficiency through a collaborative act with the reported price.

(C) As to whether the act constitutes a legitimate act

1) Article 58 of the Fair Trade Act provides that “The provisions of this Act shall not apply to lawful acts conducted by an enterpriser or an enterprisers’ organization in accordance with other Acts or orders issued under such Acts.” The term “justifiable acts” refers to the minimum acts conducted within the scope of orders issued under such Acts and subordinate statutes, where the exclusive status of an enterpriser is guaranteed by a business or an authorized system deemed reasonable to restrict competition due to the unique nature of the pertinent business, while the exclusive status of an enterpriser is guaranteed by a business operator in accordance with the business or an authorized system, etc., for which the exceptions to free competition are specifically recognized in the business that requires high level of public regulations from the perspective of public nature (see, e.g., Supreme Court Decision

2) However, in full view of the facts acknowledged earlier or the following circumstances revealed through the relevant statutes, it cannot be deemed that the reported price collaborative act constitutes “justifiable act” under Article 58 of the Fair Trade Act. The Plaintiff’s assertion on this part is without merit.

A) The term "agricultural mechanization promotion" is an Act aimed at contributing to the improvement of agricultural productivity and the improvement of management by facilitating the development and distribution of agricultural machinery and promoting efficient and safe use of agricultural machinery. Article 3 or 13 of the Act imposes a duty to prepare a policy necessary to promote agricultural mechanization projects on the State or a local government, or Article 13 of the Act provides that the State or the Minister of Agriculture and Forestry may entrust part of the agricultural mechanization projects to a corporation established to promote agricultural machinery mechanization projects, and there is no ground to view that free competition exception is specific. Furthermore, in relation to the "Rules on Handling Entrusted Services for Agricultural Mechanization established by the Ministry of Agriculture and Forestry on July 1, 2007" or "Guidelines for Handling Agricultural Mechanization Affairs" enacted on January 31, 2009, which was enacted until December 31, 2010.

In light of the contents and purport of the above-mentioned laws and regulations, even if the manufacturing of the agricultural machinery in this case reported the price of the agricultural machinery to the Ministry of Agriculture and Forestry within the scope of the price guidelines with the Ministry of Agriculture and Forestry at the time when the dutiable value return system is implemented, it is reasonable to view that the manufacturing of the agricultural machinery in this case is a price competition within the scope of the price guidelines set by the Ministry of Agriculture and Forestry, not just to exclude the price competition itself among the manufacturing of the agricultural machinery. However, the manufacturing of the agricultural machinery in this case did not simply comply with the price guidelines with the Ministry of Agriculture and Forestry, but rather agreed on the price increase or increase rate by type, model, or model. Accordingly, it does not constitute a “minimum act to be conducted within the scope of the law that specifically acknowledges the exception of free competition.”

B) Meanwhile, the administrative guidance refers to an administrative action that provides guidance, recommendation, or advice to a specific person not to conduct a certain act or not to conduct a certain act within the scope of the administrative affairs under its jurisdiction (Article 2 subparag. 3 of the Administrative Procedures Act). Even if the administrative guidance causes an unfair collaborative act, the illegality of the unfair collaborative act is not denied unless there are special circumstances that the unfair collaborative act satisfies the requirements of Article 58 of the Fair Trade Act. However, according to the result of inquiry on the Ministry of Agriculture and Forestry, in order to prevent civil complaints by the Ministry of Agriculture and Forestry in advance, the Minister of Agriculture and Forestry requires manufacturers of agricultural machinery to report the same price in the case of the same model agricultural machinery manufactured by the method of order production (hereinafter referred to as "Oprogin Equation"), and if the price differs, it shall be acknowledged that the Minister of Agriculture and Forestry has adjusted it through the Association of Agricultural and Fishing Machinery. However, as seen earlier, it does not constitute an act of providing guidance, advice, or advice on a single price for a specific agricultural machine manufactured by the Ministry of Agriculture and Forestry as an exception to free competition.

Next, in the case of the remaining agricultural machinery (hereinafter “non-identical model agricultural machinery”) except for the same model agricultural machinery produced by OEM among the agricultural machinery of this case, it is recognized that the Ministry of Agriculture and Forestry took part in the process of price establishment by December 31, 2010, such as setting guidelines for price of non-identical model agricultural machinery and equipment and approving reported price. Furthermore, the Plaintiff asserts that the Ministry of Agriculture and Forestry has given administrative guidance to the manufacturer of the agricultural machinery of this case so that the Ministry of Agriculture and Forestry may agree on the increase of price by type or the rate of increase in rate of increase in price by type of the agricultural machinery. However, some fact-finding results on the association of the agricultural machinery of this case consistent with the Plaintiff’s assertion are lacking in objective evidence or circumstances to support its credibility, and there is no sufficient evidence to acknowledge the Plaintiff’s assertion that the agricultural machinery association is a substitution of interest with the manufacturing of the agricultural machinery of this case. However, as seen earlier, there is no sufficient evidence to deem the same model of price declaration by the Ministry of Agriculture and Forestry.

B. As to the existence of grounds for the action of the incentive rate collaborative act

(1) Summary of the Plaintiff’s assertion

The cartel conduct with the incentive rate cannot be deemed to fall under Article 19 (1) 1 of the Fair Trade Act for the following reasons, and there is no restriction on competition, nor is it very little.

(A) In the form of a collective consultation with the manufacturing of the instant agricultural machinery, agricultural cooperatives had consulted on the rate of incentives for the instant agricultural machinery. The discussion about the ratio of incentives for the instant agricultural machinery manufacturers was merely an extension of the “collective consultation,” which agricultural cooperatives induce and approve by themselves.

(B) Collaborative act with the subsidy rate is a quasi-exclusive consumer of agricultural machinery and an exclusive authority granted by the government to provide funds for purchasing agricultural machinery of this case and a minimum measure that was inevitably made to require and respond to the request for excessive increase of the subsidy rate for the agricultural machinery of this case.

(C) The right to determine the rate of incentives for the instant agricultural machinery and manufacturing industry was considerably limited due to the superior position in the trade of the agricultural industry, as seen earlier, and the agricultural industry cooperative did not incur any damage by determining the rate of incentives for the instant agricultural machinery at the level it wishes, notwithstanding the joint act with the ratio of incentives.

(D) After notifying the instant proposal to increase its subsidy rates to the manufacturers of the instant agricultural machinery, agricultural cooperatives impliedly understood the collaborative act of raising subsidy rates by arranging a group of manufacturers of the agricultural machinery.

(2) Determination. In full view of the facts acknowledged earlier and the circumstances indicated in the evidence Nos. 25, 33, 34, 36, 49, 51, 52, 90, 93-96, 98-105, 110-12, 114, 116, 120, 179, and 183 as follows, the cartel conduct rate is determined to have a limitation of competition as an act affecting the determination of the price, which is the transaction conditions of the agricultural machinery of this case. The plaintiff's assertion on this part is not acceptable.

(A) In the process of consultation between the instant manufacturing of agricultural machinery and the instant manufacturing of agricultural machinery, the agricultural cooperative marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing marketing.

(B) The fact that agricultural cooperatives in the instant agricultural machinery market were in superior position to the general consumers is recognized. However, about 80% of the domestic agricultural machinery manufacturing agency, distribution through agricultural machinery manufacturing agency, and distribution through agricultural cooperatives is merely about 20%. Moreover, since there was an increase in demand for the agricultural machinery market, the instant agricultural machinery manufacturing agent could secure a substitute trading agent to a certain extent through export. Furthermore, in light of the market share of the instant agricultural machinery manufacturing industry based on the agricultural cooperative marketing performance, agricultural cooperatives depend on the supply of the instant agricultural machinery manufacturing industry. Furthermore, the fourth agricultural machinery manufacturing investigation in the instant 4 agricultural machinery was difficult to view that agricultural cooperatives were in superior position to the demand for the suspension of the business by cancelling a contract concluded with agricultural cooperatives that did not carry out their proposal in 2011. In light of such circumstances, it is difficult to view that agricultural cooperatives were in superior position to the demand for the suspension of the business.

(C) The price actually supplied by the manufacturer of agricultural machinery to an agency for sale of agricultural machinery or agricultural cooperative is determined by the contract price after deducting the commission, such as sales incentives, from the contract price. Therefore, it is apparent that the collaborative act with the incentive rate constitutes an agreement on the price prohibited under Article 19(1)1 of the Fair Trade Act. Furthermore, the circumstance and evidence presented by the Plaintiff alone, despite the collaborative act with the incentive rate, is insufficient to recognize that the incentive rate of the agricultural machinery of this case was determined at the

(D) Collaborative act with the subsidy rate was conducted through a conference or mutual contact with the executive officers, etc. in charge of the instant agricultural machinery and manufacturing separately held by the agricultural cooperative, not the business council organized by the agricultural cooperative, but the instant agricultural machinery and manufacturing. In addition, from the viewpoint of the agricultural cooperative, there is a concern that it would be difficult for the agricultural cooperative to carry out the subsidy rate if the manufacturing of the instant agricultural machinery would reach an agreement on the subsidy rate and participate in individual negotiations with the agricultural cooperative, there is no special circumstance to permit the joint act with the agricultural cooperative. Considering these circumstances, it is difficult to find that the agricultural cooperative, upon the submitted evidence alone, has implicitly understood the subsidy rate in advance even though it was aware of the joint act with the prior knowledge of the joint act. As to the existence of the grounds for the disposition

(1) Summary of the Plaintiff’s assertion

As the agricultural cooperatives abuse their superior position in transactions and forced excessive price discounts, the four agricultural machinery manufacturers of this case inevitably take a minimum common response, and there is no competition limitation or is very little.

(2) Determination

Comprehensively taking account of the facts acknowledged earlier and the following circumstances revealed by the statements from 135 to 138, it can be sufficiently recognized that the restriction of competition between the system business and the non-compliance with the business. The Plaintiff’s assertion on this part is without merit.

(A) As seen earlier, comprehensively taking into account the portion of distribution through Nonghyup in the domestic agricultural machinery market, the possibility of securing alternative trading lines for the manufacture of the four agricultural machinery of this case, the market share of the manufacture of the four agricultural machinery of this case, and the case of unilateral termination of the system contract by the manufacture of the four agricultural machinery of this case, etc., the evidence submitted alone in order to respond to the excessive demand of the agricultural cooperatives in superior transactional position. It is difficult to view that the system project and the non-commercial activities are merely the minimum measures to cope with the demand of the agricultural cooperatives in superior transactional position.

(B) On March 28, 2011, the instant four manufacturing companies agreed to participate in a scam business administered by the Nonghyup on March 28, 201, and thereafter, LSMT entered into an agreement with the Nonghyup on March 28, 201, and entered into an agreement on the Track in the instant agricultural machinery. Accordingly, the Plaintiff and the international group machinery and products manufacturing companies re-contested with the Nonghyup on April 1, 201 that they did not enter into a scam contract with the Nonghyup on March 28, 201, and carried out a plan to reduce the sales of the agricultural machinery of LSMD loan, which did not carry out the agreement with the Nonghyup on March 28, 2011. (c) In view of the fact that agricultural cooperatives depend greatly on the four manufacturing process of the instant agricultural machinery in the supply of the instant agricultural machinery, it was determined that they were likely to have carried out a competitive act and its effects due to the process of restricting competition.

D. As to the existence of reasons for the disposition of collaborative acts in rental business bidding

(1) Summary of the Plaintiff’s assertion

The cartel conduct for rental business has no or is very weak to restrict competition for the following reasons:

(A) The act of rental business bidding is merely a joint response to the manufacture of the instant 4 agricultural machinery to the minimum extent due to the excessive reduction of the price of the instant agricultural machinery through bidding by the agricultural cooperative. Moreover, such joint response was denied by the determination of the contract price at the price desired by the agricultural cooperative due to an individual consultation with the agricultural cooperative.

(B) Recognizing that agricultural cooperatives agreed in advance to distribute the awarded agricultural machinery manufacture of the instant 4 agricultural machinery products, the agricultural cooperatives impliedly understood this fact.

(2) Determination

Comprehensively taking account of the facts acknowledged earlier and the circumstances indicated in the evidence No. 152 and No. 155, the following circumstances, which can be known, the competition limitation of rental business bidding can be sufficiently recognized. The Plaintiff’s assertion on this part is also unacceptable.

(A) In full view of the circumstances mentioned above in relation to the transaction status of the agricultural cooperative and the manufacture of the four agricultural machinery of this case, the competitive bidding of the agricultural cooperative by the agricultural cooperative, such as denying the competitive bid of the agricultural cooperative or obtaining the bid price from the successful bidder as his own will, is de facto nullifying the competitive bidding of the agricultural cooperative, and the competitive bidding of the rental business continues to be conducted for about one year and six months, it is difficult to view that the evidence submitted alone is a minimum measure to respond to the excessive demand of the agricultural cooperative in superior transaction status.

(B) The circumstances and evidence presented by the Plaintiff alone are insufficient to recognize that the unit price of the instant agricultural machine was determined the same level as the case where the rental business bid was not conducted, notwithstanding the rental business bidding.

(C) When it is difficult for Nonghyup to conclude a contract by way of a negotiated contract with the four manufacturing of the instant agricultural machinery, it conducted competitive bidding. Considering the process of such competitive bidding, the steam submitted alone cannot be deemed to have been aware in advance of the fact that the four manufacturing of the instant agricultural machinery was allowed to distribute the successful bid price.

(e) As to the existence of reasons for the action of price collaborative act

(1) Summary of the Plaintiff’s assertion

In other words, the price increase rate is set in proportion to the price increase rate by agricultural cooperatives and the Public Procurement Service to simplify the final consumers of typry fishing, and the price increase rate is set in proportion to the price increase rate by other suppliers, so there is no competition limit or it is very little.

(2) Determination

Comprehensively taking account of the following circumstances revealed through the facts acknowledged earlier, it can be sufficiently recognized that the restriction of competition in the price collaborative act is limited. The Plaintiff’s assertion on this part is without merit.

(A) It is not sufficient to recognize that agricultural cooperatives or the Public Procurement Service provided any administrative guidance so that the final consumers can be integrated into agricultural machinery manufacturers of the instant 4 agricultural machinery only with Gap evidence No. 12, and there is no other evidence to acknowledge otherwise.

(B) Even if the manufacture of the instant 4 agricultural machinery from the same company purchases different products, the final consumers are bound to change depending on the distribution structure or appropriate profit size of each business entity. Nevertheless, the manufacture of the instant 4 agricultural machinery by agreement on the price of the 4 agricultural machinery, thereby minimizing price competition.

(C) Considering the circumstances in which the manufacture of the four agricultural machinery of this case occupies 100% of the market for agricultural purposes, it is deemed that the effect of the collaborative act on the price determination of the typ for agricultural purposes was absolute.

3. As to the illegality of the penalty surcharge payment order

A. Summary of the plaintiff's assertion

The order to pay the penalty surcharge of this case shall be revoked as the following defects are found:

(1) Defect in the calculation of the relevant sales amount

(A) The manufacturer of the instant agricultural machinery reported the price to the Ministry of Agriculture and Forestry, limited to the product with a price increase among the agricultural machinery of this case. Accordingly, the sales of the product without a price increase among the agricultural machinery of this case should be excluded from the relevant sales.

(B) Of the instant agricultural machinery not related to the reported price collaborative act, sales of 10 classes sold only by the Plaintiff among those for agricultural use, which are not related to the price collaborative act, should be excluded from the relevant sales.

(C) Sales of products which are forced by the Ministry of Agriculture and Forestry to apply the same price among the agricultural machinery of this case must be excluded from relevant sales unless the violation of the Fair Trade Act is recognized.

(2) Defect in the determination of the base rate

(A) The act of rental business bidding or the act of price collusion is weak to restrict competition, and thus, constitutes "an act of violating heavyness". Nevertheless, the defendant considered it as "an act of violating heavyness" and determined the standard rate for imposition as 7%.

(B) The facts are similar in that both the incentive rate collaborative act and the rental business collaborative act stand against the agricultural cooperative that is in an exclusive position in demand. Nevertheless, the defendant is against the equity in view of the importance of the two acts significantly different.

(3) Other defects

(A) The fact-finding is similar in that both different price collaborative acts and reported price collaborative acts have occurred as a partner of the government’s policies. Nevertheless, unlike the reported price collaborative act, the Defendant does not reduce a penalty surcharge on the ground that the government’s policies were taken place as a partner, which is contrary to the reported price collaborative act, and thus is contrary to equity.

(B) In light of the characteristics of the domestic agricultural machinery market and the importance of the violation, etc., the Defendant’s issuance of a penalty surcharge in addition to the corrective order to the Plaintiff is an excessive sanction, and the penalty surcharge calculated also deviates from and abused discretion, such as going against the principle of proportionality.

(1) The Defendant has discretion to determine whether to impose penalty surcharges on a violation of the Fair Trade Act and to determine the specific amount of penalty surcharges within a certain scope prescribed by the Fair Trade Act when imposing penalty surcharges. However, if the Defendant erred by misapprehending the fact that served as the basis for imposing the penalty surcharges or violates the principle of proportionality while exercising such discretion, it constitutes a deviation or abuse of discretionary power (see, e.g., Supreme Court Decision 2012Du17773, Nov. 28, 2013). Meanwhile, the Defendant bears the burden of proof as to the deviation or abuse of discretionary power imposed by an administrative agency in carrying out discretionary actions.

(2) However, for the following reasons, there is no violation of the relevant statutes or any violation of the discretionary authority regarding the instant penalty surcharge order. The Plaintiff’s assertion on this part cannot be accepted.

(A) As to whether the calculation of the relevant sales was defective

1) The relevant sales refer to sales of related goods or services sold by an enterpriser in violation of the Fair Trade Act in a certain business area during the period of violation. In such cases, the relevant goods or services should be determined individually and specifically by type of act, taking into account the type and nature of goods or services affected directly or indirectly by the violation, trading area, trading partner

2) However, comprehensively taking account of the facts acknowledged earlier and the following circumstances revealed by the evidence Nos. 26 and 168, the Defendant’s calculation of the relevant sales amount of the instant case can be sufficiently recognized as objectivity and rationality.

A) As to the relevant sales of the reported price collaborative act:

① The manufacturers of the instant agricultural machinery did not simply agree on the rate of increase in the products raised at the reported price among the agricultural machinery of this case, but also agreed on whether to increase the reported price by type, model, or type of the agricultural machinery of this case. In other words, the product was excluded from the subject of the agreement on manufacturing the agricultural machinery of this case on the sole ground that the reported price was not increased.

Even if there are some products that did not expressly agree in the process of determining whether to increase the reported price, the main difference by product type is only Mab and there is no change in homogeneity between the filmer, the colorer, or the compacter, in light of the fact that there is no change in the homogeneity between the manufacturer and the manufacturer of the agricultural machinery in this case, the price change in some models among the products belonging to the same group is bound to affect the price of the other model. Therefore, the defendant's measure of calculating the sales amount related to the collaborative act of the reported price is not considered unreasonable without distinguishing the price increase.

② For the same reasons as seen earlier, the price of another model belonging to the same group already existing in the case of new products among the agricultural machinery of this case is inevitably affected. In fact, the manufacturing of the agricultural machinery of this case seems to have been set higher than the price of the similar model when a new product is sold. Accordingly, the new product among the agricultural machinery of this case constitutes a product that is indirectly affected by the collaborative act of reporting price.

③ The Ministry of Agriculture and Forestry has had manufacturers of the agricultural machinery of this case report the same price of the same model manufactured by the OEM among the agricultural machinery of this case. However, as seen earlier, the reported price collaborative act cannot be deemed to fall under “justifiable act as stipulated in Article 58 of the Fair Trade Act.” Therefore, the defendant's measure that included the sales of the above products in the sales related to the price collaborative act is justifiable. (B) On August 25, 2010, the plaintiff's employee Eul sent e-mail to the employees in charge of the International Integrated Machinery, Winter Products Products, LSM, and LSM, that the sales of 44 kinds of agricultural products should be adjusted. On the other hand, the above 44 classes of products are composed of 0.0-13 specifications, 00-13 specifications, 6 x 12,44PR size, which the plaintiff claims that they alone sell. In light of such circumstances, the 4th class of the agricultural machinery of this case includes the information on the sale of the above products.

Even if some of the agricultural typists sold by the Plaintiff were not included in the subject of an agreement on price, considering the similarity, etc. of other typical materials, the price fluctuation in other specifications seems to have an indirect impact on the price of the agricultural typists sold by the Plaintiff alone. Therefore, the Defendant’s measures included in the sales related to the price collaborative act are not deemed to have been unlawful or unreasonable.

2) Comprehensively taking account of the following circumstances revealed through the facts acknowledged earlier as to whether the determination of the imposition standard rate was defective, the reasonableness of the imposition standard rate determined by the Defendant for the calculation of the penalty surcharge is recognized.

A) In light of the market share of the manufacturer of the instant 4 agricultural machinery, both the Rental Business Bidding and the other bidding price collaborative act are the so-called light collusion, and the restricted effect of competition is significant. Therefore, the Defendant’s premise that the Defendant’s bid for rental business and the other bidding price collaborative act constituted “a serious violation” and then determined the base rate of imposition (7-10%) as the minimum of 7% (7-10%) stipulated in the relevant public notice in consideration of the period during which the act of violation continued, is sufficiently acceptable.

B) The four manufacturing activities of the instant agricultural machinery were conducted through competitive bidding because it is difficult for agricultural cooperatives to conclude a contract with the manufacture of the instant four agricultural machinery, and the competitive bidding was conducted. It was determined that the instant four manufacturing activities conducted a rental business bid on the intent to supply the desired quantity to their own unit price, and it constitutes a more significant violation than the incentive rate in terms of the specific details of the violation or the degree of competition-restricted effects.

Therefore, it cannot be deemed that the Defendant’s setting of different rates for imposition of both parties contravenes the principle of equity.

(C) Comprehensively taking account of the following circumstances revealed through the facts acknowledged earlier as to whether there were other defects, the evidence submitted alone does not determine that the Defendant’s order to pay the penalty surcharge was erroneous as otherwise alleged in this part.

1) When comprehensively considering the market share of the instant agricultural machinery business operators, the period of collaborative acts, and the degree of competition-restricted effects due to collaborative acts, etc., the mere circumstance asserted by the Plaintiff does not constitute a case where the Defendant issued a penalty surcharge order to the Plaintiff in addition to the corrective order, does not constitute a case where it deviates from

2) As seen earlier, although the reporting price collaborative act does not constitute “justifiable act” as stipulated in Article 58 of the Fair Trade Act in the case of a price collaborative act, there is room to deem that the government’s policy that strongly controlled the prices of agricultural machinery between long-term and long-term prior to the implementation of the recommended consumer price scheme has become a single person. However, in the case of a price collaborative act, there is insufficient evidence to acknowledge that the government’s policy was the same person. Therefore, it cannot be deemed that the government’s measure that did not reduce the surcharge on the ground that the government’s policy regarding price collaborative act took place as the same person

4. Conclusion

The plaintiff's claim is dismissed on the ground that it is without merit.

The presiding judge, the whole judge;

Judges Dok-woo

Judges Yoon Jong-dae

1) Although LS was originally named “ELS Electric Cable,” the trade name was divided into the investment business sector and the machinery business sector on July 2, 2008.

At present, the change was made in the same manner, and from that time, the LSMT theory, a newly established corporation, has been engaged in the mechanical business sector of LS Wire.

2) The name was changed from the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Agriculture, Food and Rural Affairs, etc.;

The name of the Ministry of Agriculture and Forestry shall not be distinguished before or after the change in the name for the convenience.

3) An association established to promote the sound development of the agricultural machinery and industry and to enhance the welfare of its members, subject to financial support from the Ministry of Agriculture and Forestry.

The duties of selecting agricultural machinery, reporting of base price and change, and reporting of price, and the support standard funds for agricultural machinery eligible for subsidization of purchase funds;

It was entrusted with the calculation of the amount and support limit.

4) However, the period of the collaborative act in this part of LSS is from November 27, 2002 to July 1, 2008, and the period of the collaborative act in this part is from July 1, 2008 to LSSMN.

Between July 2, 2008 to June 9, 2011.

5) However, the period of the collaborative act in this part of LSSS is from December 5, 2003 to July 1, 2008, and the period of the collaborative act in this part of LSSSN.

From July 2, 2008 to March 22, 2011.

6) However, from April 12, 2010, ELSM was involved in the collaborative act in this part.

7) Business operators are also business operators in the "Guidelines for Examination of Unfair Collaborative Acts in which administrative guidance, which was established by the defendant, enacted on December 27, 2006, was involved."

Where a separate agreement is reached with respect to matters falling under any of the subparagraphs of Article 19 (1) of the Fair Trade Act by reducing administrative guidance, unfair practices are committed.

The Act stipulates that the act constitutes one of the collaborative acts.