In a case where five combined cable broadcasting business operators, including Gap corporation, agreed to impose sanctions on program providers who concluded a contract for supplying broadcast programs with Internet multi-media broadcasting business operators by means of reducing their broadcasting channels, and the Fair Trade Commission issued a corrective order and penalty surcharge, on the ground that they conducted unfair collaborative acts as prescribed by Article 19(1)9 of the Monopoly Regulation and Fair Trade Act, the case holding that the above agreement indirectly interfered with the paid broadcast service business of Internet multi-media broadcasting business operators, thereby restricting or restricting competition in the paid broadcast service market.

In a case where five combined cable broadcasting business entities, including Gap corporation, entered into a broadcast program supply contract with the Internet Multimedia Broadcasting business entities, (hereinafter referred to as "IPTV business entities"), and (hereinafter referred to as "P business entities") agree to impose sanctions by reducing the broadcast program channels, and thus, the Fair Trade Commission issued a corrective order or penalty surcharge on the ground that they conducted unfair collaborative acts prescribed in Article 19 (1) 9 of the Monopoly Regulation and Fair Trade Act, the case affirming the judgment below that the aforementioned agreement would hinder the business of the TV broadcasting business entities, which made it difficult to enter the TV broadcasting market and made it difficult for the service business entities to make access to the TV market, as well as reduced competition between the users of the TV service market and the company Gap who participated in the agreement, etc., taking into account the structure and characteristics of the TV broadcasting market, the relationship between the combined cable broadcasting business entities and the PP business entities participating in the agreement, the intention and purpose of the agreement, and the market situation before and after the agreement, were indirectly waived, thereby undermining the competitiveness of the TV business entities.

Article 19 (1) 9 of the Monopoly Regulation and Fair Trade Act

C&C Co., Ltd. (Attorneys Son Ji-yol et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Rotex, Attorneys Cho Han-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2011Nu30566 decided September 19, 2012

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. Regarding ground of appeal No. 1

A. Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) provides that “No enterpriser shall agree with another enterpriser to engage in, or cause another enterpriser to engage in, any of the following acts that unfairly restrict competition (hereinafter “unfair collaborative act”) by means of a contract, agreement, resolution, or any other means.” Article 19(1) of the same Act provides that “any other act than those referred to in subparagraphs 1 through 8, which practically restricts competition in a particular business area by preventing or restricting business activities or business activities of other enterprisers (including those who engaged in such act).”

B. Based on the adopted evidence, the lower court acknowledged the following: (a) as a new entry into the television broadcasting business entity (hereinafter “IPTV business entity”) into the television broadcasting market, the Plaintiff and five composite cable broadcasting business entities (referring to multiple cable broadcasting business entities running in more than two broadcasting zones; hereinafter “Plaintiffs, etc.”) was anticipated; and (b) as to media which entered into a broadcast program supply contract with the IPTV business entity on November 14, 2008, the lower court determined that the agreement was made with the 25 billion won to support the IP business entity, on condition that the PE business entity did not supply the broadcast program to the IPTV business entity; (c) as to which the PE business entity had concluded a broadcast program supply contract with the PE business entity on November 14, 2008, the lower court, based on the overall agreement between the PE business entity and the Plaintiff’s 10-year program provider and the Plaintiff’s market share prior to and after the agreement on the PE business entity’s provision of the PE.

C. Examining the reasoning of the judgment below in light of the above legal provisions and the records, the judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles as to "influence of business activities" under Article 19 (1) 9 of the Fair Trade Act, incomplete deliberation, violation of the rules of evidence, omission of judgment, etc., which affected

2. Regarding ground of appeal No. 2

A. Whether the pertinent collaborative act restricts competition should be determined by examining whether the collaborative act causes or is likely to cause impacts on the determination of price, quantity, quality, other terms and conditions of trading, etc. by reducing competition in a particular business area, taking into account various circumstances, such as the characteristics of the pertinent goods or services, consumers’ standard for choosing products, and the impact of the market and enterprisers on competition (see, e.g., Supreme Court Decisions 9Du6514, Mar. 15, 2002; 2012Du19298, Nov. 14, 2013).

B. Comprehensively taking into account the facts and the circumstances established by the lower court, the Plaintiff et al. made it difficult to enter the pay broadcast service market by engaging in the act of interference with the business activities of the said service provider in accordance with the agreement of this case, and not only made the channel competitiveness of the said service provider in the pay broadcast service market, and there was a risk of undermining the consumer’s choice of the pay broadcast service market, and thus, the agreement of this case may be deemed to have caused a situation in which competition in the pay broadcast service market is restricted or restricted, and it is difficult to deem that the act of interference with the business activities has brought a pro-competitive effect on the pay broadcast service market.

C. Therefore, the decision of the court below which held that the agreement in this case was eventually likely to restrict or restrict competition in the pay broadcast service market is just, and there is no error in the misapprehension of legal principles as to competition limitation under Article 19 (1) 9 of the Fair Trade Act, incomplete hearing, or violation of the rules of evidence, as alleged in the grounds of appeal.

3. As to the third ground for appeal

A. Article 22 of the Fair Trade Act, Article 9(1) of the former Enforcement Decree of the Monopoly Regulation and Fair Trade Act (amended by Presidential Decree No. 23864, Jun. 19, 2012; hereinafter “Enforcement Decree of the Fair Trade Act”) provides that the amount of purchase of relevant goods or services may be determined as related sales if a violation is related to the purchase of goods or services, and Article 61(1) [Attachment 2] of the Enforcement Decree of the Fair Trade Act provides that the Fair Trade Act shall be determined based on the type and nature of the goods or services that are directly or indirectly affected by the violation, transaction area, transaction stage, etc.

B. Based on the circumstances indicated in its reasoning, the lower court determined that there was no illegality in recognizing the scope of the Defendant’s related products on the ground that the instant agreement indirectly or indirectly contributed to the failure of the PP TV business operators to supply the broadcast programs to the PP business operators other than the PP, and that the PP business operators are unable to be actually supplied with all the broadcast programs provided by the PP business operators, and thus, the lower court rejected the Plaintiff’s assertion that the inclusion of the purchase amount of the broadcast programs from the PP business operators other than the PP business operators, regardless of the instant agreement, of the channels in which a large number of the PP business operators were never intended to supply the broadcast programs to the PP business operators, was improper.

Furthermore, the lower court determined that the Defendant’s calculation of the penalty surcharge based on the premise that the instant agreement constitutes a very serious violation on the ground that the possibility of criticism for the instant agreement is not low, did not deviate from discretion or abuse.

C. Examining the reasoning of the judgment below in light of the above legal provisions and the above legal principles and records, the judgment of the court below is just and there is no error in the misapprehension of legal principles as to imposition of penalty surcharges, incomplete hearing, omission of judgment

4. Conclusion

Therefore, the appeal is dismissed, 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 Kim Chang-suk (Presiding Justice)