[1] Criteria for determining whether an advertisement is likely to mislead consumers if it targets general consumers

[2] Whether the Fair Trade Commission may issue an order to publish the fact that a corrective order was issued by the Fair Trade Commission on the ground of a violation of the law even though the part of "public announcement of violation of the law" under Article 24 of the former Monopoly Regulation and Fair Trade Act loses its effect as a decision of unconstitutionality (affirmative)

[3] The case holding that a disposition by the Fair Trade Commission ordering an investment trust securities company that produces and distributes a guide leaflet that is likely to mislead consumers as to the return rate of financial goods does not constitute a deviation or abuse of discretionary power, in addition to the suspension order of the pertinent act

[1] Whether an advertisement is likely to mislead consumers when it covers general consumers should be objectively determined on the basis of the overall and extreme increase in the number of ordinary consumers, who are not experts, by receiving the advertisement in question.

[2] Even if the part of the "Publication of Violation of the Act" under Article 24 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 5235 of Dec. 30, 1996) loses its effect as a decision of unconstitutionality, the Fair Trade Commission may issue an order of "public announcement of the fact that the Fair Trade Commission received a corrective order from the Fair Trade Commission on the ground of the violation of the Act" as "other necessary measures

[3] The case holding that the Fair Trade Commission's disposition ordering an investment trust securities company that produced and distributed a guide leaflet that is likely to mislead consumers as to the return rate of financial goods does not constitute a deviation or abuse of discretionary power, in addition to the suspension order of the pertinent act

[1] Article 23 (1) 6 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 5235 of Dec. 30, 1996) / [2] Articles 23 (1) 6 and 24 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 5235 of Dec. 30, 1996), Article 47 (2) of the Constitutional Court Act / [3] Articles 23 (1) 6 and 24 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 5235 of Dec. 30, 1996), Article 27 of the Administrative Litigation Act

[2] Constitutional Court en banc Order 2001Hun-Ba43 decided Jan. 31, 2002 (Hun-Gong65, 155)

Korea Investment Trust Securities Co., Ltd. (Law Firm Sejong, Attorneys Yellow-si et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Attorney Choi Han-hoon, Counsel for defendant-appellant)

Seoul High Court Decision 2001Nu7635 delivered on May 23, 2002

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

The grounds of appeal are examined.

1. As to whether the guiding leaflet of this case constitutes an advertisement

The court below acknowledged the fact that the information leaflet in its decision (hereinafter referred to as the "information leaflet in this case") was produced by the plaintiff to widely inform and present the contents, terms and conditions of his financial product, and other transaction related matters to consumers, and actually distributed to not only institutional investors but also individual investors, and determined that the information leaflet in this case constitutes "advertisement" under Article 23 (1) 6 of the former Monopoly Regulation and Fair Trade Act (amended by Act No. 5235 of Dec. 30, 1996, hereinafter referred to as the "Act").

In light of the records, the fact-finding and decision of the court below is justified, and there is no violation of the rules of evidence as otherwise alleged in the ground of appeal.

2. As to the possibility of mistake in the leaflet of the instant case

The court below found that although the plaintiff's holding Doro Doro Securities Investment Trust No. 4 (hereinafter "the product of this case") stated the phrase "it shall pay interest of 15% per annum to domestic investments regardless of operating profits," in the information leaflet of this case, although it is a performance dividend product, it is not an explanation to the plaintiff's product of this case, but an explanation to the effect that the plaintiff's credit is an explanation to the plaintiff's credit issued, it is not an explanation to the plaintiff's investment of the product of this case. The court below held that the above wording stated in the information leaflet of this case based on the above facts found as above can not be easily viewed if it is an expert, but if it purchases the product of this case to general consumers who are not aware of the operating method of complex financial products, it is likely to mislead them as if they would pay interest of 15% per annum to them regardless of operating profits.

Whether or not an advertisement is likely to mislead consumers if it is intended for general consumers shall be determined objectively on the basis of the total and stitual increase that general consumers with common caution, not experts, receive the advertisement in question.

In light of the records and relevant statutes and the above legal principles, the fact-finding and judgment of the court below are acceptable, and there is no violation of the rules of evidence or misapprehension of legal principles as to the possibility of misconception of the information leaflets of this case, as otherwise alleged in the ground of appeal.

3. On the order to publish the fact of receiving corrective orders due to violation of the Act

The decision of the Constitutional Court (2001Hun-Ba43, Jan. 31, 2002) that a violation of the law is unconstitutional, is interpreted and operated to mean that an offender recognizes and publishes facts of violation of the law on his own before the commencement of a criminal trial." However, the "Publication of facts of violation of the law by the Fair Trade Commission," which is distinguished from the "Publication of Violation of the Act", can be permitted in order to achieve the legislative purpose, to minimize negative effects such as decrease in the degree of infringement of fundamental rights and confusion that may occur after the trial, and to minimize the negative effects such as confusion that may occur after the trial." Even if an act of violation of the provisions of Article 23 (1) of the Act was committed, the Fair Trade Commission should consider the "Publication of other necessary corrective measures" as the "Publication of the Act on the Grounds that it loses the effect of the unconstitutionality Order" as the "Publication of other necessary corrective measures" as the "Publication of the Act on the Grounds that it becomes necessary for correction."

In the same purport, it is proper that the court below determined that the order to publish the decision ex officio based on the "other measures necessary for correction" under Article 24 of the Act is legitimate as the order to publish the fact that the defendant received the corrective order", and there is no error in the misapprehension of legal principles as to the "other measures necessary for correction" under Article 24 of the Act, as otherwise alleged in the ground of appeal.

4. As to the deviation and abuse of discretionary power

The lower court determined that even if the Defendant issued a corrective order in addition to the suspension order of the Plaintiff’s act, it cannot be deemed that it deviates from and abused discretionary power, on the ground that the Defendant’s disclosure of the fact that the Defendant received the corrective order in addition to the suspension order of the Plaintiff’s act was also necessary for the public interest to prevent the same act later by making the Plaintiff know of the key contents of the guidance leaflet, and thus, even if the Defendant did not abuse and abuse discretionary power, on the ground that the rate of return on financial products, such as beneficiary certificates, is a key matter that may have a decisive impact on consumers’ decision on the purchase selection, and that the guidance leaflet in the instant case could be mistakenly expressed such key contents in an inaccurate manner.

In light of the records, we affirm the judgment of the court below and there is no error in the misapprehension of legal principles as to deviation or abuse of discretionary power, as otherwise alleged in the ground of appeal.

5. Conclusion

Therefore, the appeal is dismissed and the costs of appeal are assessed against the plaintiff who is the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Cho Cho-Un (Presiding Justice)