[1] In a case where a series of agreements on price collusion take measures such as temporary reduction of price, whether the agreement may be deemed to have been terminated or terminated and thus the agreement is severed (negative in principle)

[2] The meaning on the date when an unfair collaborative act is terminated (i.e., the date when the act of execution is terminated) and whether such a legal principle is applied in cases where there exists an agreement on the restriction of transaction, etc. under Article 19(1)1 of the former Monopoly Regulation and Fair Trade Act, or where there is a combination of an agreement on price fixing and an agreement on the restriction of transaction, etc. (affirmative)

[1] In general, it is difficult to deem that an agreement has been terminated or terminated, unless it is acknowledged that a business operator explicitly expresses his/her intent to reverse collusion even though a series of agreements temporarily lower the price.

[2] In cases where there was an agreement on price determination, etc. and an implementation based thereon under Article 19(1)1 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11937, Jul. 16, 2013; hereinafter “Fair Trade Act”), the date when the unfair collaborative act was terminated refers not to the date when the agreement was reached, but to the date when the implementation based on the agreement was terminated. Such legal principle applies likewise to cases where there was an agreement on trade restriction, etc. under Article 19(1)3 of the Fair Trade Act, or where there was a combination of agreements on price determination and trade restriction, etc.

[1] Article 19(1) of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 11937, Jul. 16, 2013) / [2] Article 19(1)1 and 3 of the former Monopoly Regulation and Fair Trade Act (Amended by Act No. 11937, Jul. 16, 2013)

[2] Supreme Court Decision 2004Du11275 Decided March 24, 2006 (Gong2006Sang, 728), Supreme Court Decision 2010Do16001 Decided September 13, 2012 (Gong2012Ha, 1705)

As shown in the List of Plaintiffs in attached Table.

KONS Korea Co., Ltd and two others (Attorneys Lee Im-soo et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Law Firm Han, Attorneys Ahn Byung-jin et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012Nu16529 decided February 7, 2013

1. Of the lower judgment, the part of the lower judgment revoking the payment order of KRW 1,308,00,000 against Plaintiff NexEX Korea Co., Ltd. is reversed, and that part of the lower judgment is revoked, and that part of the lawsuit is dismissed.

2. Of the judgment below, the part of the judgment against the defendant against plaintiff Nexna Korea Co., Ltd., Hanwon Cable Co., Ltd., Seoul Electric Cable Co., Ltd., Han Cable Co., Ltd., Korea Electric Cable Co., Ltd., Han Han Electric Cable Co., Ltd., continental Cable Co., Ltd., continental Cable Co., Ltd., Ltd., M&C Co., Ltd., Ltd., M&C Co., Ltd., Ltd., M&C Co., Ltd., Ltd., light safety ships Co., Ltd., Ltd., Ltd., Gamat Cable Co., Ltd., Ltd., Ltd., Gamat Cable Co., Ltd., Ltd., 200, etc.

3. Each of the appeals by Plaintiffs Kukdong Cable Co., Ltd. and DDR Co., Ltd. and the appeals by the Defendant against Plaintiff Kukdong Cable Co., Ltd. are dismissed.

4. The costs of the appeal by the Plaintiff Kukdong Cable Co., Ltd. shall be borne by the said Plaintiff, and the remainder except the costs of the appeal by the Defendant shall be borne by the Defendant.

1. Determination of the grounds of appeal ex officio is made prior to the judgment.

A. If the Defendant issued a penalty surcharge (hereinafter “prior disposition”) against a voluntary reporter or an investigative partner under Article 22-2 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 11937, Jul. 16, 2013; hereinafter “Fair Trade Act”), and subsequently issued a penalty surcharge reduction or exemption on the ground of voluntary report, etc. by separating the case against the voluntary reporter, etc. under Article 35(3) of the Enforcement Decree of the Fair Trade Act, the subsequent disposition is final disposition that determined the final penalty surcharge actually to be paid by the voluntary reporter, including the voluntary report, and the prior disposition is a type of provisional disposition that planned such a final disposition, and becomes extinct after the subsequent disposition. Therefore, in such a case, the lawsuit seeking the cancellation of the prior disposition is unlawful as it seeks the cancellation of the previous disposition, as it is unlawful.

B. On May 4, 2012, Plaintiff NON Korea Co., Ltd. (hereinafter “Co., Ltd.”) sought revocation of both of the previous dispositions (hereinafter “instant subsequent dispositions”) and the Defendant’s order to pay a penalty surcharge of KRW 1,308,00,000 to the said Plaintiff (hereinafter “instant prior dispositions”) and (2) the Defendant’s order to pay a penalty surcharge of KRW 654,00,000 on the ground that the previous dispositions were voluntarily filed on May 6, 2012 under Article 22-2 of the Fair Trade Act (hereinafter “instant subsequent dispositions”). The lower court rendered a judgment revoking the entire previous dispositions, while the subject of the instant revocation lawsuit is the remaining amount after the said reduction.

However, in light of the above legal principles, the prior disposition of this case was absorbed into the subsequent disposition of this case, and thus becomes null and void, thus seeking revocation of the disposition already invalidated.

Therefore, among the lawsuit in this case, the part seeking the revocation of the preceding disposition is deemed unlawful. The lower court revoked the entire preceding disposition on the premise that this part of the lawsuit is lawful. In so doing, the lower court erred by misapprehending the legal doctrine on the legal nature and effect of the reduction of penalty surcharge due to voluntary report under the Fair Trade Act, thereby making a judgment.

2. We examine the Plaintiffs and the Defendant’s grounds of appeal (to the extent of supplement in case of supplemental appellate briefs not timely filed by the Plaintiffs).

A. As to the ground of appeal by Plaintiff NexEX Korea

The lower court determined that the part of the lawsuit filed by Plaintiff Nexna Korea seeking the revocation of the subsequent disposition of this case among the lawsuit filed by Plaintiff Nexna Korea is unlawful, where the Defendant issued an order to pay penalty surcharges on illegal collaborative acts and reduced the penalty surcharges on the grounds of voluntary report, the subject of appeal litigation is the remainder of the penalty surcharges, and the amount of the penalty surcharges is not separately subject to appeal litigation.

However, in light of the legal principles as seen earlier, since the instant subsequent disposition is a final disposition related to the penalty surcharge and the prior disposition of this case was absorbed into and extinguished as the subsequent disposition of this case, the said Plaintiff’s claim for revocation of the subsequent disposition of this case, which asserted illegality of the penalty surcharge disposition, shall be deemed lawful.

Nevertheless, the lower court determined that the part seeking the revocation of the follow-up disposition of this case is unlawful. It erred by misapprehending the legal principles on the legal nature of the disposition of reduction or exemption of penalty surcharges due to voluntary declaration under the Fair Trade Act and the subject of appeal litigation.

B. As to the ground of appeal by the Plaintiff Kukdong Cable and DK

According to the records, the above plaintiffs appealed only to the part of the judgment below as to the corrective order against them, and all of the grounds of appeal by the above plaintiffs are related to the winning part by revoking the payment order of penalty surcharge in full. Ultimately, all of the grounds of appeal by the above plaintiffs are related to the portion which was not appealed, and it cannot be a legitimate ground of appeal. Thus, we cannot accept it without examining it

C. As to the grounds of appeal by the rest of the plaintiffs except for the plaintiff KONEX Korea, Kukdong Cable, and DK Co., Ltd. (hereinafter "19 copies, including plaintiff Wonk Cable, etc.").

(1) As to the allegation on the interruption of the unfair collaborative acts and the lapse of the disposal prescription period for the Plaintiff Gowon Electric Cable, the Korean Electric Cable, the Han Cable, the continental Cable, and the continental Cable

(A) If business operators have reached multiple agreements over a long-term period of time, and if the multiple agreements have been implemented for the same purpose on the basis of a single intent, and without interruption, the specific contents of the agreement have been partially modified, such series of agreements shall be deemed as one unfair collaborative act, barring special circumstances (see Supreme Court Decision 2007Du3756, Sept. 25, 2008, etc.).

(B) The lower court determined that: (a) even though the Korea Electric Power Company (hereinafter “Plaintiffs, etc.”) agreed on the implementation ratio of small and medium enterprises with respect to two underground power lines and the scheduled implementation ratio of some items among the tender items for the purchase of electric power lines of the Korea Electric Power Corporation in 1999 (hereinafter “Korea Electric Power Corporation”), it did not reach an agreement with respect to the remaining electric power lines; (b) the bid price ratio for the purchase of the Korea Electric Power Line was 74.8% average of the estimated price was 1998, and the bid price ratio was remarkably low compared to 9.4% in 1998, based on the fact that the agreement was not reached in 1998, on the grounds that the agreement was not reached for 190 years after the lapse of 190 years on the basis of the agreement, and that the agreement was not reached for 190 years after the lapse of 190 as well as for 29 years after the 1999.

(C) However, it is difficult to accept the above determination by the lower court for the following reasons.

1) According to the reasoning of the lower judgment and the evidence duly admitted by the lower court, ① Korea Electric Power Industry Cooperative (hereinafter “Electric Cooperative”) has the authority to allocate the annual unit price to ensure that the agreement was reached in 2000, based on the following facts: (a) except for the underground power line bidding on October 5, 1999, the bid was conducted on a yearly basis; (b) a competitive bidding was conducted from October 19, 199 to November 3, 199; and (c) there was no attempt to return to the former collusion participants before the new agreement on the tender in 2000; and (b) the authority to allocate the annual unit price was granted to the Korea Electric Power Industry Cooperative (hereinafter “Electric Cable Cooperative”) to ensure that the agreement was implemented; (c) (i) (i) (i) (i) (i) (i) (i) (i) (i) (ii) (i) (i) (i) (ii) (iii) (i) (iii) (i) (iii) (i) (iv) (i) (i) (i) (i) (iv) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (ii) (i) (ii) (i) (i) (i) (i) (ii)

2) We examine these circumstances and facts acknowledged by the lower court in light of the legal doctrine as seen earlier.

In general, in a case of price collusion, even if a series of agreements take measures such as temporary reduction in the price among enterprisers, it is difficult to deem that the agreement has been terminated or terminated unless the enterprisers’ explicit intent to reverse collusion is recognized. However, in the instant case, since the agreement was not reached in the bidding on October 5, 199 among multiple biddings, the said competitive bidding was conducted immediately, and a series of biddings that were in the following month continued to have been conducted, it cannot be viewed as a case of temporary reduction in price.

Furthermore, the 2000 agreement had significant changes in its contents compared with the 1998 agreement, and the reason for changing the content of the agreement was to make a new device to prevent the situation where the agreement was not reached as in 1999, and thus, it can be deemed that the purpose of improving the structure of the previous weak agreement is to start a new collusion by improving the structure of the agreement. In addition, in order to attempt a new agreement again in the subsequent year after the failure of the agreement, it is necessary to make a new resolution on the agreement. However, there is no evidence to deem that the agreement was already reached at the time of the 198 agreement to prepare for the case where the agreement was not reached and going to a competitive bidding.

In light of these circumstances, it is difficult to view in this case that the agreement in 1998 and the agreement after 2000 were for the same purpose on the basis of a single intent.

3) If so, the 1998 agreement is separate from the remaining agreements since 2000, and it is difficult to view that there exists continuity of agreement between the two. As to the 1998 agreement, the five-year statute of limitations under Article 49(4) of the former Fair Trade Act (amended by Act No. 11406, Mar. 21, 2012) should have expired.

Nevertheless, solely based on its stated reasoning, the lower court determined that the 1998 agreement and the 2000 agreement were to carry out the same purpose on the basis of a single intent and continued without being severed due to the failure to reach an agreement in 1999, and thus the 1998 agreement has not lapsed. This is an erroneous determination by misapprehending the legal principles on the number of unfair collaborative acts and the statute of limitations on the disposal of unfair collaborative acts under the Fair Trade Act.

(2) As to the assertion of the termination of the unfair collaborative act by 19 companies, including the Plaintiff Gowon Electric Cable

(A) Where there was an agreement on price fixing etc. under Article 19(1)1 of the Fair Trade Act and an action based on such agreement, the date of termination of the unfair collaborative act refers not to the date on which the agreement was reached but to the date on which the action based on such agreement was terminated (see Supreme Court Decision 2004Du11275, Mar. 24, 2006, etc.). Such a legal principle applies likewise to cases where there was an agreement on trade restriction, etc. under Article 19(1)3 of the Fair Trade Act, or where there was a combination of agreements on price fixing etc.

(B) The facts acknowledged by the lower court are as follows.

1) The Plaintiffs, etc. continuously agreed on the annual bidding for the purchase of various electric power lines conducted by Korea Electric Complex from 2000 to 2006, the ratio of allocation of the quantity between large enterprise groups and small and medium enterprise groups, the ratio of allocation for each company belonging to the pertinent business group on the quantity allocated to large enterprise groups and small and medium enterprise groups, the selection of successful bidders, the bidding price and the bid price according to the bidding scenario (hereinafter “instant collaborative act”), and the bidding price and the bid price according to the bidding scenario, etc. have been carried out (hereinafter “instant collaborative act”), and the bid price and the bid price have been re-distributioned according to the agreement

2) The Plaintiffs, etc. agreed on the tender in 2006 on October 19, 2006. The specific details are as follows: ① The basic allocation ratio of large enterprises with respect to total bidding quantity is 60%:40%; ② With respect to specific allocation ratio, the allocation ratio of large enterprises with underground power lines is 5%:45%, the allocation ratio of large enterprises with respect to small and medium enterprises with electric poles, 59.3%:45%, the public power line for electric poles with electric power and electric poles for strengthening power generation shall be 59:3%:40%, the public power line for steel towers shall be 100%, the low voltage line shall be 0%, and 0%:10%, the low voltage line shall be determined as 0%, and ③ the successful bid volume shall be distributed to the small and medium enterprises to which the said association belongs, depending on their partnership shares, and thereby, the agreement shall be reached in a way that allows small and medium enterprises to grow more than one billion won out of the large enterprises in order (hereinafter referred to “206”).

3) According to the agreement in 2006, the Plaintiffs, etc. invested in the bid for the purchase of electric power lines, such as underground power lines, electric poles, etc., conducted on December 12, 2006, according to the scenarios, and the Electric Cable Cooperative allocated the successful bid volume to the affiliated small and medium enterprises according to their partnership shares, etc. The Korea Electric Cable, LSS and Ga Electric Cable, belonging to a large enterprise, cultivated part of the successful bid volume from January 19, 2007 to December 4, 2007, to compensate for the decrease in external shape of the sales amount.

4) Under the agreement in 2006, the Electric Cable Union concluded a contract for the supply of goods from July 12, 2007 to July 11, 2008 with the KON and the Plaintiff Hanmi Electric Cable, light safety lines, Arabic, DNA electric wires, and two electric wires until July 11, 2008, which served as a cover for raising the successful bid price in a tender implemented from March 15, 2007 to June 22, 2007.

5) In addition, in accordance with the agreement in 2006, the Electric Cable Union concluded a goods supply contract with the KON, the 600V cV 2006 supply unit (600V) from July 20, 2007 to September 5, 2007, with the ion Cable and the Plaintiff ES Cable, together with the ion Cable and the 12-time auction to increase the successful bid price. On September 12, 2007, the term of the contract was awarded on September 12, 2007 at the average bid price rate of 9.6% from September 12, 2007 to September 111, 2008, and concluded a goods supply contract with the KON, the 3rd Electric Cable, the 3rd Electric Cable, the 3rd Electric Cable, the 2005 ethic Electric Cable, the ethic Electric Cable, the ethic Cable, the ethic Cable, the ethic Cable, the ethic Cable, the ethic Electric Cable, the

6) Meanwhile, the Plaintiff Nexna Korea, Nexna Electric Cable, Kukdong Cable, Seoul Electric Cable, Tak Cable, Tak Cable, Alternative Cable, Korea Electric Cable, Gak Cable, continental Cable, IMC, KTC, KTC, and astronomical IEel (hereinafter “12 small and medium enterprises, including Plaintiff Nexna Korea”) declared on November 28, 2007 that in the conference room of the Electric Cooperative on November 28, 2007, it would not follow the previous agreement. The Nonparty, who was not the first party of the Electric Cooperative, declared that in the above bidding, the bidding would be between the two small and medium enterprises, including Plaintiff Nexna Korea, and that in fact, the bidding was conducted between the two small and medium enterprises, including the Plaintiff Nexna Korea, and five large enterprises, etc.

(C) In light of the aforementioned legal principles, the agreement between the parties on the termination date of the collaborative act in this case (i) on the limitation of successful bid price and transaction volume in the goods transaction in the bidding method, such as the collaborative act in this case, has resulted in a conclusive effect of restricting competition in the transaction by concluding a contract for goods supply through the bidding procedure, and the act of distributing the successful bid volume to affiliated small and medium enterprises, such as electric wires associations, is merely an internal division of the outcome. (ii) The agreement between Korea and 200 to 206 on the purchase of various power lines of advance bid conducted each year from 200 to 2006, and each agreement is for the same purpose and continued to be implemented with the same intention, and it can be deemed that there has been an implied agreement on the suspension of tender documentation every year between the plaintiffs and others (the date of 200 years prior to 20 years prior to the end of the competitive act). As such, it can be deemed that 206 days prior to the end of the competitive act in this case’s 207 years prior to the tender.

Therefore, the basic imposition rate of penalty surcharges (limited to 5%) set forth in the Defendant’s notice on the detailed standards, etc. for the imposition of penalty surcharges (hereinafter “public notice of penalty surcharges”) before amendment of December 31, 2007 shall apply to the collaborative act of this case.

(D) Nevertheless, the lower court deemed that the instant collaborative act was terminated only on September 11, 2008 after the electric cable cooperative finished distributing the successful bid volume to its affiliated small and medium enterprises, and determined that the instant penalty surcharge payment order was lawful by applying the upper limit (10%) of the base rate of penalty surcharge (10%) stipulated in the penalty surcharge notice amended on December 31, 2007 as to the instant collaborative act by the 19 major companies, including Plaintiff Won Electric Cable, was lawful. In so doing, the lower court erred by misapprehending the legal doctrine on the termination date of the unfair collaborative act under the Fair Trade Act.

D. As to the Defendant’s grounds of appeal

(1) As to the allegation of legality of applying the imposition standard rate to Plaintiff Kukdong Cable

For the reasons indicated in its holding, the lower court determined that the instant penalty surcharge order was unlawful, based on the basic rate for imposition of penalty surcharges as amended on December 31, 2007, after the completion of the agreement, on December 21, 2007, which was the time when the voluntary report was filed with respect to the Plaintiff Kukdong Cable, and that the instant penalty surcharge order was unlawful.

As seen earlier, the termination date of the instant collaborative act, including the said Plaintiff, may be deemed as September 12, 2007 or November 28, 2007. Therefore, the said Plaintiff’s voluntary report is merely after the completion of the collaborative act, and it does not constitute the termination date of the said collaborative act against the said Plaintiff.

Therefore, the court below erred in finding the time to file a voluntary report on the termination of the collaborative act against the above plaintiff, but the conclusion that the above plaintiff's collaborative act was terminated before the penalty surcharge notice was amended on December 31, 2007, which applied the above revised penalty surcharge notice, was justified. Therefore, the court below did not err by misapprehending the judgment below which affected the conclusion of the judgment.

(2) As to the assertion of calculating the relevant sales revenue of Plaintiff DK

(A) The lower court determined to the effect that it was unlawful for the Defendant to recognize the relevant sales revenue to the said Plaintiff, even though the said Plaintiff did not have any relevant sales revenue since the Plaintiff returned all the allocated volume and received a culture by another business entity.

(B) However, it is difficult to accept the above determination by the lower court for the following reasons.

As seen earlier with respect to the collaborative act of this case, the said Plaintiff was a party involved in the entire collaborative act of this case, which agreed on the determination of successful bid price and the allocation of quantity, rather than simply the agreement on the allocation of quantity. As such, the said Plaintiff was aware of the fact that the electric cable association participated in the actual bidding and that the said Plaintiff agreed on the allocation of quantity through the electric cable

In addition, Article 9(1) proviso of the Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 21492, May 13, 2009) provides that the contract amount shall be the relevant sales if the above plaintiff actually received the share of the quantity in accordance with the above agreement, and the circumstances that were returned thereafter are merely the grounds for imposing a penalty surcharge; Article 9(2) proviso of the Enforcement Decree of the Fair Trade Act (amended by Presidential Decree No. 21492, May 13, 2009) delegated by Article 22 of the Fair Trade Act (amended by Presidential Decree No. 21492, supra) provides that if the above plaintiff's collaborative act of this case is a bid collusion and similar act, the contract amount shall be deemed to be the relevant sales; even if the above defendant imposed a penalty surcharge on the above plaintiff's collaborative act on the basis that it is difficult to calculate the price of the above plaintiff's price, such as the price of the goods or services sold in a particular business area, and the above provision provides that the defendant's notice of the above may not be applied within 2017.

Nevertheless, the court below held that the order to pay a penalty surcharge against the above plaintiff was unlawful on the grounds that there was no related sales amount in the above plaintiff. This decision is erroneous in the misapprehension of legal principles as to the scope of related sales under the Fair Trade Act.

3. Conclusion

Therefore, in the judgment of the court below, the part that the Defendant revoked the entire prior disposition against Plaintiff NON Korea is reversed. Since this part of the judgment of the court below is sufficient for the Supreme Court to directly render a judgment on the Defendant’s grounds of appeal, this part of the lawsuit by Plaintiff NON Korea is dismissed, without further proceeding to decide on the Defendant’s grounds of appeal. Of the judgment below, the part that lost 19 Plaintiff NON Korea and Plaintiff NON Korea, and the part that lost the Defendant against Plaintiff DK, are reversed, and each of these parts of the case is remanded to the court below for further proceedings consistent with this Opinion. Each of the appeals by Plaintiff Kukdong Cable, DK, and Defendant’s appeals against Plaintiff Kukdong Cable are all dismissed. The costs of appeal are assessed against each losing party, excluding the part that resulted from Plaintiff Kukdong Cable’s appeal and the part that resulted from Plaintiff DK’s appeal from the Defendant’s appeal, and the remainder that

[Attachment] List of Plaintiffs (Appellants): Omitted

Justices Kim Shin (Presiding Justice)