Nomethyl Effects Co., Ltd. (Law Firm Pacific et al., Counsel for the defendant-appellant)

Fair Trade Commission (Law Firm Kang-ho, Attorneys Mediation and 2 others, Counsel for defendant-appellant)

September 26, 2012

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 issued to the Plaintiff on June 14, 2011 shall be revoked.

1. Details of the disposition;

On June 14, 2011, the Defendant is a device that allows financial institutions such as a bank of financial automation devices to receive financial services directly, such as cash withdrawal, and there is a CD with no deposit function.

In accordance with the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”), four enterprisers, including the Plaintiff, etc., engaged in the manufacture and sale business (hereinafter “instant enterprisers”), were ordered to take corrective measures and pay penalty surcharges (hereinafter “instant disposition”), on the ground that they committed the following unfair collaborative acts:

(1) On July 23, 2003, the 2005 new financial market price agreement (hereinafter “sale price agreement”) was reached between the former Promotion Association, the ATM council, or the executives and employees in charge of the business to agree on the target selling price or minimum selling price of the financial automation device through mutual communication of the executives and employees in charge of the business, or the bid price or negotiated contract price for the financial automation facilities such as the bank (hereinafter “sales price agreement”). ② From September 2005, the 2005 new financial market price agreement was reached from September 2, 2006 to September 2007, the 2000 new financial market price agreement was reached, and the new financial market price for each new financial market from January 2, 2006 to April 22, 2007 to June 23, 2009, the 2000 new financial market price for each new financial market.

[Ground for recognition] Unsatisfy, Gap evidence 1, the purport of the whole pleadings

2. Whether the instant disposition is lawful

(a)the existence of a collaborative act;

1) The plaintiff's assertion

There was no agreement with the Plaintiff on the replacement price or the quantity distribution with other entrepreneurs.

(ii) the facts of recognition

(A) a meeting of manufacturers of financial automation machinery;

Financial automation Machinery Industry Council (hereinafter “ATM Council”) which is one of the industrial councils affiliated with the Korea Electronic Industry Promotion Association (hereinafter “Korea”) is established for the instant business operators in the form of a market share of 100%. The instant business operators are the president’ meetings, executive groups’ meetings, and working-level meetings.

(B) The Framework Agreement on July 23, 2003 and the Agreement on Sale Price

On July 23, 2003, the instant enterprisers agreed to “the normalization of the market price by preventing a decline in the price of financial automation machinery and restricting price competition” at a meeting of the president of the ATM council. Moreover, through a meeting of working-levels, etc., the price competition was prevented, but the price increase by means of determining the lowest price from 2004 on the basis of the fact that the price increase after conducting a cost investigation in consideration of the opposition by the consumers such as banks. This agreement continued until April 2009 through the ATM council, etc.

(C) An agreement on the replacement price of new rights

According to the Bank of Korea's issuance of Won Won-do Won-do, January 2006, 2007, Japan-Japan Won-do Won-do, and June 2009, financial institutions need to replace part of the existing financial automation devices so that they can respond to the new rights. Accordingly, this case's business operators agree on the replacement price of new rights from September 2005 to April 2009 through working-level meetings, etc. at any time. The main contents are as follows.

On September 2005, the population of ATM in the table set forth in the main sentence of 11.5 million won to KRW 12.5 million to KRW 9 million to KRW 12.5 million to KRW 9 million to KRW 1.5 million to KRW 750,000 to KRW 7.5 million to be replaced by the CD at KRW 750,000 to KRW 7.6 million to re-consultation the lower limit price to KRW 9 million to KRW 7.6 million to be agreed on July 2007, 207, with respect to the submission of the estimate in the second half of the year of 2007, the price for ATM vehicle to KRW 1,50 million to KRW 1,770,00 to KRW 1,60 to KRW 7,500 to KRW 2,608 to KRW 2,500 to KRW 760,00 to KRW 2,500 to KRW 2,508.

(d)Agreement on the distribution of quantity of shares;

The financial automation device is the most important means of competition because there is almost little difference in the performance between products. Accordingly, it means that enterprisers who have a market share of 100% agree on the sale and replacement price as above has become extinct. Accordingly, in order to maintain such agreement and facilitate the implementation thereof, there has been a need for enterprisers to agree on the distribution of the quantity of shares in advance.

Therefore, the instant business operators discussed the principle of 25% of each company regarding the division of markets in the second half of July 7, 2004 at the meeting of the president on July 7, 2004.After October 2004, the instant business operators agreed to the principle of quantity allocation as follows, and thereafter, they agreed to apply all competitive biddings and free contracts to the quantity of each subsequent competitive contract.

(1) The annual amount of supply of each company shall be at least 25%, and the difference in the annual amount of water supply by each company shall be within 【5%, and the difference in the quantity of water supply in the relevant year shall be preserved in the following year.

(2) In order to cope with tenders by bank, two suppliers shall be designated as one company in charge of each bank each year to minimize competition. The distribution rate of supply volume of the first and second-class suppliers for each bank shall be 7:3, 6:4, etc. In such cases, the first-class supplier shall have priority in price negotiations and the second-class supplier or the rest companies shall comply with the opinion of the first-class supplier.

(3) In cases of small-scale banks, only one supplier shall be selected, as it is impossible to determine second-class suppliers due to its nature, since there are many purchases.

(4) Where only a specific enterprise can enter into a contract under conditions (such as technology, human resources, and physical network, etc.) other than price, the relevant specific enterprise shall be a principal business operator: Provided, That this shall include the volume in determining annual distribution rate (25% per annum).

5. The agricultural cooperatives shall be allocated to all four companies, and the principal trader shall have preferential negotiating rights and shall receive an amount equivalent to 60% of the supply volume of the agricultural cooperatives.

Since then, the instant enterprisers maintained these principles of agreement through continuous meetings, but they recognized a certain difference in quantity between the instant enterprisers, and tried to reduce the difference in quantity between the instant enterprisers by holding a quantity-sharing consultation for each case.

[Ground for recognition] The facts without dispute, Eul's entries in Section 1-4, 7, 8, 12, 24-29, 30, 31-38, 52, 53, 65-67, 77-80, 83-86, 88, 94, 102, 103, 105, 106, 108, and 116, and the purport of the whole pleadings

3) Determination

According to the facts of recognition, since July 23, 2003, the instant enterprisers including the Plaintiff, based on the agreement on selling prices of financial automation machinery, which was made from July 23, 2003, and since July 2004, since September 2005, they agreed on the replacement prices and the distribution of the quantity respectively. In addition, the Plaintiff’s assertion disputing this agreement is not accepted (in particular, regarding the agreement on the distribution of the quantity of vehicles, the corrective order of this case only provides that “the agreement on the distribution rate of the quantity of each company, the supplier, etc.” as prohibited acts, and it does not specify that it constitutes the replacement quantity, and it does not increase the relevant sales amount on the ground that there was an agreement on the distribution of the quantity of vehicles, or that there was no agreement on the distribution of the quantity of vehicles, even if there was no agreement on the distribution of the quantity of vehicles as alleged by the Plaintiff, it does not affect the legality of the instant disposition).

B. Whether there exists a restriction on competition in the individual price agreement

1) The plaintiff's assertion

① The replacement market for financial automation machinery is a single-time market that temporarily occurs as a new paper paper is issued, and the company that manufactures and supplies the machinery is a exclusive market that can replace only the company that manufactures and supplies the machinery. ② The cost of replacing the machinery with the new product is more than twice the replacement cost, and there is no sufficient time to issue the new paper paper paper paper paper paper paper paper paper paper as at the time the new paper paper paper paper paper paper paper paper paper paper paper paper paper paper paper was issued. ③ For these reasons, consumers such as the bank, etc. have been conducting negotiations with respect to the replacement and replacement price with the instant company including the Plaintiff, etc. without regard to the replacement price and replacement price, and there is no competition relationship between the Plaintiff and the replacement. Moreover, since the replacement price is determined by individual negotiations with the bank regardless of the agreement in this case, there is no restriction on the replacement part of the agreement in this case.

2) Determination

(A) Definition of the relevant market

In light of the following circumstances, the above employed evidence, Gap evidence Nos. 11, 52, 54, 70, 71, and Eul evidence Nos. 82 (including serial numbers), and Eul evidence Nos. 82, the defendant's measures are correct in terms of the overall market (financial automation device and the market selling replacement service) covering the replacement and replacement of the financial automation device, and competition relation between the business operators is recognized even in relation to the replacement and replacement, and it cannot be viewed that the financial institution, such as the bank, had already determined the quantity and replacement in the inside before conducting the purchase negotiations with the business operators of this case. The plaintiff's assertion is not acceptable.

(1) A financial automation device shall have no particular difference in its function where it is replaced with a new one or where it is replaced with an existing one.

② Accordingly, financial institutions, which were buyers of financial automation devices, considered the replacement proposal for existing apparatus and new apparatus, and set the replacement and replacement cost, the number of apparatus subject to replacement by examining the cost of replacement and replacement, the training of use of existing apparatus, investment comparison, etc., and subsequently, the increase in the sale price of new apparatus was anticipated to bear a large burden of costs. Accordingly, financial institutions, which were buyers of financial automation devices, were required to replace the apparatus subject to replacement with the apparatus that was originally planned to be changed (the apparatus purchased in 202) or to introduce new apparatus and promote replacement.

③ The instant business operators discussed how to respond to the new rights, and agreed that “the devices introduced in 2004 and 2005 shall be replaced and the remainder shall be replaced.” This is recognized that the instant business operators may replace the existing devices and replace them with new devices, and on the premise of this, they seem to have operated a business plan.

④ Considering that the difference between the replacement price and the replacement price is one of the two times the nominal difference between the replacement price and the replacement price, the difference between the future available period of use of the relevant equipment and the replacement, etc., it cannot be deemed that the difference between the real price and the replacement price leads to that degree. Therefore, it cannot be readily concluded that there is no substitution between the replacement and replacement.

(5) A financial institution has installed various devices supplied by many business operators as well as the apparatus supplied by a single business operator in preparation for the failure of the financial automation device to operate due to a malfunction. Even if new money is issued, the current amount of money used along with the old right and the term of use of the devices has been more than 5 years and more than 6 years. Therefore, even if it is impossible for the instant business operator to replace the apparatus supplied by another business operator for economic and de facto reason, if the cost of replacement for each business operator is different, the financial institution may increase the number of vehicles for the apparatus of the business operator to present a low price of replacement, and the quantity of replacement for each business operator to present excessive cost of replacement for the apparatus of the business operator until the replacement with a new product or reaching the replacement cycle.

(B) Restriction on competition

In the relevant market of the instant agreement, the market share of the instant enterprisers, including the Plaintiff, in the financial automation equipment and its replacement service sales market, exceeds 100%, and the performance of the financial automation equipment is not different by manufacture, and thus the most important competition factor is “price.” Considering that the instant collaborative act is a collaborative act with regard to the price and the volume distribution for that purpose, it is recognized that the instant collaborative act is likely to restrict or restrict competition in the relevant market. Even if the actual individual price was determined by individual negotiations with the bank, such as the Plaintiff’s assertion, it cannot be viewed otherwise. The Plaintiff’s assertion is rejected.

(c) Penalty surcharges;

(i) the relevant sales;

A) The portion of the transaction from July 23, 2003 to March 2, 2004

(1) Plaintiff’s assertion

The agreement of July 23, 2003 was agreed to increase the selling price of the machinery and appliances to be sold in 2004, and accordingly, the sales amount from July 23, 2003 to March 2, 2004 should be excluded from related sales.

(2) Determination

As seen earlier, the agreement was reached in the meeting of the president on July 23, 2003 and the working-level group immediately following the agreement not to compete with the price. Accordingly, the sales up to March 2004 constituted the sales directly or indirectly affected by the agreement of this case, which concluded that the sales up to March 2004 would not compete with the price. The Plaintiff’s assertion is rejected.

B) Other parts

(1) Plaintiff’s assertion

In accordance with a contract concluded before July 23, 2003, the sales of products supplied after July 23, 2003 and the sales of contracts concluded after March 2004, which were not affected by the collaborative act of this case, shall be excluded from the relevant sales.

(2) Determination

Even based on all evidence submitted by the Plaintiff, it cannot be readily concluded that the sales amount claimed by the Plaintiff was not directly or indirectly affected by the instant agreement on the price and quantity allocation, and in light of the following circumstances, there is no error in the Defendant’s measures, including the relevant sales amount. The Plaintiff’s assertion is rejected.

① Article 9(1) of the Enforcement Decree of the Fair Trade Act provides that the relevant sales amount is “the sales amount of relevant goods or services sold in a particular business area during the period of violation” or “amount equivalent thereto,” and does not limit the sales amount of relevant goods or services sold in relation to the violation.

② The term “unfair collaborative act” prohibited under the Fair Trade Act is established by mutual agreement to jointly engage in an act of unfairly restricting competition, and as such, it does not require the act of implementation following such agreement, and thus, it is subject to a penalty surcharge even if it does not perform such act. Accordingly, Article 9(1) of the Enforcement Decree of the Fair Trade Act and the detailed criteria for imposition of penalty surcharges are publicly announced 5.C. of the Enforcement Decree of the Fair Trade Act. “Where no sales have occurred due to a violation,” the pertinent sales may be calculated by comprehensively taking into account the past performance, relevant business entity’s plan, market situation, etc. In addition, in the case of a bid collusion, the contract amount is to be the relevant sales for

③ In full view of the content and function of the aforementioned statutes, the purpose and function of the penalty surcharge system, and the subject and procedure of imposition, etc., the penalty surcharge imposed on an unfair collaborative act is based on the nature of administrative sanction imposed on the relevant offense in order to realize the administrative purpose of suppressing the unfair collaborative act, and the elements of restitution of unjust enrichment should be deemed as added (Supreme Court Decision 2002Du7456 Decided October 28, 2004). Therefore, it cannot be deemed that the penalty surcharge is necessarily subject to unjust enrichment arising from the unfair collaborative act.

④ The term “related product” that determines the scope of the relevant sales amount refers to a product directly or indirectly affected by a collaborative act (see attached Table 2 of the Enforcement Decree of the Fair Trade Act). Therefore, even if a price increase is not made even if it is not made because it is not subject to a collaborative act, the sales amount of the product is included in the relevant sales amount if it is anticipated that the demand would increase because it is the price of the product subject to the collaborative act because it is the price of the product subject to the collaborative act, or that it would have been able to maintain the previous price even if there

However, even if there were circumstances alleged by the Plaintiff, such as that a contract was concluded prior to the collaborative act and the supply was made during the period of the collaborative act according to the price stipulated in the contract, it is difficult to readily conclude that the sale was not indirectly affected by the collaborative act.

⑤ The relevant sales are merely the basis for calculating a penalty surcharge. The amount of a penalty surcharge imposed is also calculated by taking into account other circumstances prescribed by Article 55-3 of the Fair Trade Act, such as the content, degree, period, and frequency of the relevant violation, and the scale of profits acquired therefrom. A penalty surcharge calculated as such is also imposed only within the scope of a penalty surcharge imposed under Article 22 of the Fair Trade Act. Therefore, the degree of profits acquired from an unfair collaborative act among the relevant sales may be sufficiently considered at the specific

④ Furthermore, the relevant sales refer to sales generated from the date of a violation to the date of completion of the violation, and the time of violation shall be based on the date of agreement (see Supreme Court Decision 2007Du3756, Sept. 25, 2008). However, even if an agreement was made to increase the price, sales at the price immediately increased from the date of agreement are more exceptional, and in fact, sales at the price increased after a certain period from the date of agreement can be sufficiently anticipated. Accordingly, if only the sales at the price actually increased is related, the agreement would be contrary to the purport of the agreement as of the date of calculating the relevant sales.

7) In addition, if only the sales amount transacted at the price increased by the collaborative act is related to the sales amount, the Fair Trade Commission should calculate the penalty surcharge on a daily basis as to which transaction was made at the price increased during the period of violation. Accordingly, it is substantially difficult to calculate the pertinent sales amount. On the other hand, in light of the calculation process of the penalty surcharge as seen earlier, the pertinent sales amount is not much equivalent to the actual profit that should be determined as well, and it does not coincide with the purport of the penalty surcharge system. In this regard, the pertinent sales amount is deemed as the sales amount generated during the period of

(ii)additional mitigation upon voluntary rectification;

A) Plaintiff’s assertion

Inasmuch as the Plaintiff did not voluntarily reduce the amount of voluntary declaration on the ground that the Defendant was subject to voluntary declaration even before reporting the commencement of the review of the instant collaborative act, it was unlawful.

B) Determination

In light of the following circumstances, the Plaintiff’s failure to take additional mitigation following voluntary correction on the ground that the status of the second-class voluntary reporter is recognized and the penalty surcharge is mitigated shall not be deemed to be erroneous, such as misconception of facts or violation of the principle of proportionality and equality. Moreover, there is no data suggesting that there is an error in the Defendant’s measure regarding the calculation of penalty surcharge. The Plaintiff’s assertion is rejected.

① Under the current law, voluntary declarations include investigation and cooperation requirements and recognition of the ratio of mitigation due to voluntary rectification belongs to the Defendant’s discretion. As a result of reviewing the contents, circumstances, degree, etc. of voluntary declarations, it may be determined that the mitigation by voluntary rectification is unnecessary in addition to the mitigation by the second voluntary declarations. Accordingly, there is a possibility that additional mitigation may be more unreasonable as a duplicate mitigation.

② On October 20, 2010, the issue of overlapping application was pointed out in the Defendant’s inside, and eventually, the public notice of detailed standards, etc. for imposing penalty surcharges (No. 2010-9 of the Fair Trade Commission’s notice) was amended, and the voluntary reporter excluded further mitigation on the ground of voluntary correction.

③ There are cases where the Defendant voluntarily reported to the business operator prior to the instant disposition, in addition to the mitigation pursuant to the voluntary mitigation, and there are cases where the Defendant did not reduce the mitigation, such additional mitigation cannot be deemed to have been established as a practice to the extent that it is binding on the Defendant himself/herself, and there are no materials to be deemed as identical or similar to the application of the principle of equality in the instant case.

④ In full view of the Plaintiff’s sales revenue, the amount of penalty surcharges, the ratio of the amount of penalty surcharges to the sales revenue of the imposition penalty surcharges, and the burden to bear the imposition penalty surcharges, etc., it is difficult to view that the amount of penalty surcharges imposed by the Defendant, as the Defendant did not voluntarily reduce the amount of penalty surcharges to the Plaintiff following the voluntary rectification, is excessive to the extent that the amount of

3. Conclusion

The plaintiff's claim is dismissed for lack of reasonable grounds.

Judges Ansan-jin (Presiding Judge)