[1] Whether a warning resolution by the Fair Trade Commission on the ground of a violation of the former Act on Fair Labeling and Advertising constitutes an administrative disposition (affirmative)

[2] The meaning of "measures necessary to correct other violations" under Article 7 (1) 4 of the former Act on Fair Labeling and Advertising, and whether a warning disposition against a violation of the Act on Fair Labeling and Advertising constitutes such action (affirmative)

[1] The Fair Trade Commission’s resolution on warning on the ground of a violation of the former Act on Fair Labeling and Advertising (amended by Act No. 11050, Sep. 15, 2011) constitutes an administrative disposition that restricts a business entity’s freedom and rights by taking into account whether to impose a penalty surcharge or its degree where a business entity violates the Act on Fair Labeling and Advertising (hereinafter “Fair Labeling and Advertising”).

[2] According to Article 7(1) of the former Act on Fair Labeling and Advertising (amended by Act No. 11050, Sept. 15, 2011), when a business operator, etc. commits an unfair labeling or advertising, the Fair Trade Commission may order the suspension of the relevant violation (Article 1), the publication of the fact of receiving a corrective order (Article 2), the corrective advertisement (Article 3) and other measures necessary for correcting the violation (Article 4) to correct the violation. Here, “other measures necessary for correcting the relevant violation” refers to all the measures deemed necessary and appropriate for correcting the violation, other than the corrective measures prescribed in subparagraphs 1 through 3, such as “order to Suspend the relevant violation,” and whether a penalty surcharge is imposed pursuant to the Act on Fair Labeling and Advertising, or a warning disposition that may affect the degree of the imposition.

[1] Article 7(1) of the former Act on Fair Labeling and Advertising (Amended by Act No. 11050, Sep. 15, 201); Article 2(1)1 of the Administrative Litigation Act / [2] Article 7(1)4 of the former Act on Fair Labeling and Advertising (Amended by Act No. 11050, Sep. 15, 201)

petitioner Construction Co., Ltd. and two others (LLC, Kim & Lee LLC, Attorneys Oi-seok et al., Counsel for the defendant-appellant)

Fair Trade Commission (Government Law Firm Corporation, Attorney Park Si-hwan, Counsel for defendant-appellant)

Seoul High Court Decision 2010Nu17344 decided January 12, 201

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The principle of statutory reservation derived from the principle of the rule of law under the Constitution provides that administration should be made based on law, and Article 37(2) of the Constitution provides that all freedom and rights of the people may be restricted by law only when necessary for national security, maintenance of order, or public welfare. Therefore, administrative disposition that limits the freedom and rights of the people must be based on law.

A warning resolution by the Fair Trade Commission on the grounds of a violation of the former Act on Fair Labeling and Advertising (amended by Act No. 11050, Sep. 15, 201; hereinafter “former Act on Fair Labeling and Advertising”) is to confirm the illegality of the relevant labeling and advertising, but it is a disposition that restricts the freedom and rights of the business entity by taking into account whether to impose penalty surcharges or the degree of the penalty surcharges if the business entity violates the Act on Fair Labeling and Advertising again.

According to Article 7 of the former Labeling and Advertising Act, when a business operator, etc. makes an unfair labeling or advertising, the Fair Trade Commission may order the suspension of the relevant violation (Article 1), the publication of the fact that it has received a corrective order (Article 2), the corrective advertisement (Article 3) and other measures necessary to correct the violation (Article 4). Here, the term "other measures necessary to correct the violation" refers to all the measures deemed necessary and appropriate for correcting the violation in addition to the corrective measures prescribed in subparagraphs 1 through 3, such as the "order to Suspend the relevant violation," and the warning measures that may affect the imposition of penalty surcharges or the degree of the violation of the Advertisement and Advertising Act are also deemed to fall under such measures.

Therefore, the judgment of the court below on the premise that the defendant's warning disposition constitutes corrective measures based on the former Act on the Advertisement and Advertising is just in light of the above legal principles, and there is no violation of law such as

The Supreme Court precedents cited in the grounds of appeal are inappropriate because they differ from this case and applicable laws and regulations.

2. As to the grounds of appeal Nos. 2 and 3

The false or exaggerated advertisements under the former Labeling and Advertising Act refer to advertisements that are different from the facts or are likely to deceive or mislead consumers by excessively exposing the facts, and are likely to undermine fair trade order. Whether the advertisements are likely to deceive or mislead consumers, or are likely to mislead consumers, should be objectively determined on the basis of the overall and extreme increase that general consumers with common caution receive the relevant advertisements (see Supreme Court Decision 2007Da59066, Jul. 22, 2010, etc.).

Examining the facts duly established by the court below in light of the above legal principles, the court below's determination that the advertisement of this case constitutes a false or exaggerated advertisement under the former Act on the Advertisement and Advertising, on the ground that the advertisement of this case is not appropriate for the part that the advertisement of this case constitutes a false or exaggerated advertisement on the ground that the advertisement of this case was made by using a conclusive expression that the construction of light metal was not a “equitable or planned”, on the premise that the construction of light metal was clearly distinguished from the meaning of the scheduled plan, but it is just to determine that the advertisement of this case constitutes a false or exaggerated advertisement under the former Act on the Advertisement and Advertising, on the ground that the advertisement of this case was made by means of the arrangement, composition, and method of expression of advertisement phrases emphasized in large characters as if the apartment of this case is connected with the light metal. Therefore, the court below did

3. Regarding ground of appeal No. 4

Sanction against violation of administrative laws is a sanction against the objective fact that is a violation of administrative laws and regulations in order to achieve administrative purposes. As such, it may be imposed even if there is no intention or negligence on the part of the violator, barring special circumstances, such as where it is unreasonable for the violator to know his/her duty because it is not unreasonable for the violator to believe that he/she does not know his/her duty, or where it is unreasonable to expect the party to fulfill his/her duty, etc., or where there is a justifiable reason that it is unreasonable to expect him/her to do so, etc. (see Supreme Court Decision 2010Du24371, Jun. 28, 2012, etc.).

According to the reasoning of the judgment below and the evidence duly admitted by the court below, since no confirmation was made as to the implementation of the high-speed railway business or the route of the high-speed apartment buyers in the high-speed meal district including the plaintiffs, the Goyang-si notified the housing supplier of this fact sufficiently to the housing suppliers and the removal of the light rail portion from the promotional materials for sale on two occasions after receiving such notification. After receiving the notification, the plaintiffs reported the advertisement of this case. The plaintiffs established the basic plan for the high-speed railway through the public hearing of the residents and planned to implement the light rail construction business with the approval of the central government agency, but the public hearing scheduled on July 21, 2008 was planned to be opposed to the residents, and under such circumstances, the plaintiffs advertisedd on August 1, 2008 among the advertisements of this case.

In light of the above facts in light of the above legal principles, it is difficult to view that the false or exaggerated advertisements of this case are not attributable to the plaintiffs' neglect of duty. The judgment below to the same purport is justifiable, and there is no error of law such as misunderstanding of legal principles as to the

4. Conclusion

All appeals are 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 on the bench.

Justices Lee Sang-hoon (Presiding Justice)