207Nu10541 Revocation, etc. of corrective order

1. Tybrod Sydi broadcasting for the stock company;

Gangseo-gu Seoul Metropolitan Government 6 969 - 7

The preceding date of the representative director;

2. Ethrod class broadcasting for stock companies;

Gangseo-gu Seoul Metropolitan Government 1969 - 7

The preceding date of the representative director;

[Judgment of the court below]

Fair Trade Commission

The representative chairperson and the chairperson of the board of directors

Attorney Park Young-chul, Counsel for the defendant-appellant

July 12, 2007

November 8, 2007

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s plenary session Resolution No. 2007 - 152 and 2007 - 153 on March 28, 2007 to the Plaintiffs as the plenary session Resolution No. 2007

order of correction, order of publication, and disposition of penalty surcharge in the Schedule 1, 2 of the separate sheet that has been revoked, respectively.

1. Details of the disposition;

A. Status of the plaintiffs

The plaintiffs are corporations engaging in CATV broadcasting business after obtaining permission from the Minister of Information and Communication pursuant to Article 9 (3) of the Broadcasting Act, which are business operators prescribed in Article 2 (1) of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Act").

B. The general status of the plaintiffs is as shown in the following Table 1.

The general status of the plaintiffs (unit: million won, as of the end of 2006) in the attached Table 1. Market structure (1) the structure and actual condition of the pay-charging market

The pay-charging market is an industry that transmits a broadcast program to viewers through a broadcasting facility held by an excursion ship and a satellite broadcasting business operator, etc., and consists of ① a business operator who supplies the broadcast program (hereinafter referred to as a “PP”), ② a platform business operator who transmits the broadcast program to subscribers through a broadcasting facility (channel) (hereinafter referred to as a “SO”), a CATV broadcasting business operator (hereinafter referred to as a “SO”), a CATV relay broadcasting business operator (hereinafter referred to as “RO”), a satellite broadcasting business operator, a satellite broadcasting business operator, a satellite broadcasting business operator, etc.); ③ a fee-charging program is a subscriber who visits a platform company to view the broadcast program.

PP is currently 173 business operators as of December 2, 2005, and most of them except for terrestrial broadcasting business operators concurrently or small number of business operators such as PP. On the other hand, as of December 2005, SO is 77 business operators nationwide (57 exclusive zones and 20 independent zones) and exercises a dynamic and dynamic position for each broadcasting zone. Other broadcasting business operators are RO 160 business operators, 1 satellite broadcasting business operators (one broadcasting business operator broadcasting business operator without any restriction on broadcasting zone, 'Scarf' of Korea Digital Satellite Broadcasting Business operator), 1 satelliteDB business operators (hereinafter referred to as 'TU media business operator' of the above gender DMB business operator).

In particular, since the conversion of RO into SO by the Korean Broadcasting Commission, the permission of mergers and acquisitions between SO, the full permission of large companies' investment in SO, multiple composite cable broadcasting businesses (msO: Multi System), the concentration of markets has been deepened. Then, as seen in Table 2, eight msO occupied the total composite cable broadcasting market on July 8, 2004 by 78% as of the sales amount in 2005, the market control power has been strengthened more than 8% compared to 72.8% in 2004.

On the other hand, on December 2005, the number of households that have joined pay broadcasting services is 1,4130,000 households, and the number of households that have joined double cable broadcasting accounts for 1,208,000 won and 84.7% of the total number of subscribed households.

(2) The TV home shopping business operator who provides information on products through the current TV home shopping market and sells the products by telephone is classified into a specialized home shopping business operator and an online social business operator. The specialized home shopping business operator is a business operator who has obtained approval for a program providing business under the Broadcasting Act and has five existing companies as shown below in Table 3. On the other hand, the online social business operator is a business operator who purchases and operates a cable TV program supplier with the time for advertising after undergoing prior deliberation by the autonomous advertising review organization and then purchases and operates the time for advertising to the cable TV program supplier, and the majority of them are small and medium business operators (see, e.g., e., 200 currently in operation).

The relationship between the present status of five specialized home shopping business operators (as of the end of 2005) (3) SO and TV home shopping business operators

In the past, home shopping business operators have received service fees from SO, such as general PP, but they began to demand part of the profits from sales of goods by SO, and they also began to pay service fees to SO and increase viewing households in order to secure channels.

At present five home shopping business operators are transmitting all broadcast programs to viewing households through a specific channel of the nationwide SO, and there are differences in the sales amount of transmission fees and home shopping business operators paid according to the channel numbers organized by SO. In particular, since 200, SO has the right of channel programming, five home shopping business operators are competing in order to transmit to terrestrial channels (Seng channel) or terrestrial adjacent channels (A Grade A channel).

D. The contract period between the plaintiff's "Korean Home Shopping" and the Hague (Head - Ed) integrated company for the plaintiff's Hybrod Sdi broadcasting company (hereinafter "Sdi broadcasting") is between the contract period of our Home Shopping (hereinafter "Korean Home shopping") in 2005.

1. From December 31, 2006 to December 31, 2006, each quarter (three months) entered into a program forwarding contract with the main contents of 153,00,000 won, and 8 transmitting channels (No. 4-1), and Plaintiff Trod Library Broadcasting Co., Ltd. (hereinafter referred to as “Grodial Broadcasting”) entered into a contract with Korea Home Shopping for a program forwarding agreement with the main contents of 8 broadcasting channels (No. 4-2). The agreement was to notify the Plaintiffs of the acquisition and re-issuance of the agreement within the terms of the contract and re-issuance of the agreement within the terms of the agreement between Korea Home Shopping in 2005 to December 31, 206 to 8,000,000,000 won, and 15 broadcasting channels (No. 4-2).

The term of validity of the permission granted by the head of the Seoul Metropolitan Government pursuant to Article 9(2) of the Broadcasting Act on March 24, 2006: The permission granted for a CATV broadcasting business with the term "(3) years from April 1, 2006 to March 31, 2009." The permission granted for a CATV broadcasting business with the same CATV broadcasting business area (the name of Plaintiff Sscar Broadcasting).

B. From February 2, 2006 to March 2006, there was a need to consolidate the two categories of TV home shopping business operators within one year and six months from the date of permission. The plaintiffs promoted the Hague Integration among the plaintiffs, and completed the integration on April 2006. The above Hague Integration refers to the joint use of adjacent CATV broadcasting facilities, operation expenses, and human resources for the efficient use of CATV broadcasting facilities, and their appurtenant land and buildings. This was implemented as government policies. The above Hague Integration requires the same adjustment of the channels of TV home shopping business operators, which the plaintiffs transmitted differently due to the above Hague Integration, to the same extent as the channels of the TV home shopping business operators, which the plaintiffs sent differently. However, the plaintiffs demanded the Korea Home shopping to increase the transmission fees, but our Home shopping failed to comply with this request, as we see our Home shopping was modified on April 1, 2006.

The E.M. 4) Details of the change of the channel numbers before and after the Hague integration

The defendant, in light of the trade structure of the paid-charging market in relation to the above channel change activities, demarcated the relevant market as SO's program forwarding market, and demarcated the relevant regional market as the broadcast area of each SO. In addition, the plaintiffs' market share meets the requirements for presumption of market dominant business entity under Article 4 of the Act. In addition, the above channel change activities of the plaintiffs constitute "an act unreasonably obstructing other business entity's business activities" under Article 3-2 (1) 3 of the Act and applied Article 5 of the Act to the plaintiffs on March 28, 2007 by applying Article 5 of the Act.

As the above penalty surcharge, the Defendant imposed KRW 9 million on Plaintiff SP broadcast, and KRW 1 million on Plaintiff SP broadcast, respectively. This result is to apply the Plaintiff’s violation period (from April 2, 2006 to December 12, 2006) related sales (Plaintiff SPD broadcast KRW 459,00,000, and Plaintiff SPD broadcast KRW 72,00,000, and KRW 5% on each of the relevant sales (the Plaintiff’s broadcast KRW 72,00,00, and KRW 72,00,000) which are paid from Korea Home shopping).

[Grounds for recognition] Gap evidence 1 to 5, Eul evidence 1 to 6 (including branch numbers)

A. The plaintiffs' assertion that the error in defining the relevant market is not a market dominant business entity.

The Defendant’s determination of the relevant product market as a program delivery market in the instant disposition and limited the relevant geographical market to Gangseo-gu Seoul Metropolitan Government. In other words, with regard to the determination of the relevant market, the pay broadcast service market is classified into ① the transaction stage between the platform business operator, such as PP and SO, and ② the transaction stage between the platform business operator and the subscriber (consumer). The instant channel change was made between the Plaintiffs, a PP, our home shopping and the platform business operator. Therefore, even if the PP is not the Plaintiffs, the geographical scope should be defined across the country, and in this case, the Plaintiffs do not fall under the abuse of market-dominating positions under Article 3-2(1)3 of the Act, or constitutes justifiable acts under Article 58 of the Act.

The Plaintiff’s change of the channel in this case is aimed at implementing the above vice of the Korea Broadcasting Commission, and its purpose or intent is irrelevant to the means to achieve the illegal and unfair purpose under the Fair Trade Act. The channel is allocated through negotiations between the parties in the process of determining the change of the channel in this case, so it cannot be deemed unfair in light of the market economy principle. Since five home shopping business operators exist in the TV home shopping market after the change of the channel, there is no change in the market situation of mutual competition, it does not constitute abuse of market dominant position, and in particular, the Plaintiff’s change of the channel in this case does not constitute abuse of market dominant position, and it does not apply to the prohibition of abuse of status under Article 3-2 of the Act, since it was conducted to implement the conditions of permission for the CATV broadcasting business in accordance with Article 9(2) of the Broadcasting

B. Relevant statutes

The entries in the attached Table-related Acts and subordinate statutes are as follows.

C. Determination

(1) The term "market-dominating enterpriser" under Article 2 subparagraph 7 of the Interpretation Act on the Definition of Related Markets and the Abuse of their Status refers to a supplier or customer in a particular business area who can independently or jointly determine, maintain, or change the price, quantity, quality, and other terms and conditions of transactions of goods or services. In determining a market-dominating enterpriser, the market share, the existence and degree of barriers to entry into the market, the relative size of competitive enterprisers, etc. shall be comprehensively taken into account. The term "a certain business area" under subparagraph 8 of the same Article refers to an area which is likely to be competitive or competitive relations by stage or by region. The term "an act practically restricting competition" under Article 2 subparagraph 8-2 of the same Act refers to an act that causes or threatens to cause impacts on the determination of price, quantity, quality, or other terms and conditions of transactions by intent of a particular business entity or an enterprisers' organization.

In such cases, a market-dominating enterpriser means a business entity with the ability to increase terms and conditions of transaction, such as the price, in relation to the related goods or related areas with market power to the extent that the other party is unable to accept the increase of the price without a substantial reduction of trading quantity, even if the price is increased for other goods or related areas with market power in a certain situation without any change in price, and a certain business area refers to the trade area where competition exists or may exist, and may be classified according to the subject, trade area, transaction stage, transaction channel, transaction counterpart, etc. (see subparagraph 6 of Article 202-6 of the Fair Trade Commission notification of the amendment of May 16, 2002, and subparagraph Ⅱ of the criteria for the examination of abuse of market-dominating positions (see subparagraph 2 of the same Article).

In this case, the issue of whether the plaintiffs are a market dominant enterpriser is ① how to determine the scope of the relevant market (goods market and local market) with the competitiveness, ② whether it is a dominant position in the market, and ② whether it falls under Article 3-2 (1) 3 of the Act only when a business operator who has a dominant position in the relevant market has abused his position in the market.

First, according to the defendant's resolution on the disposition of this case, the defendant is the related market of this case: ① program forwarding market as a product market (e.g., accurate service market); ② geographical market is defined as the area of Gangseo-gu Seoul Metropolitan Government with exclusive broadcast permission; ② the market share of the plaintiff z. 7.5%, the plaintiff z. 19%, the Korean Digital Satellite Broadcasting is 3.5%, and the market share of the plaintiffs exceeds the standard prescribed in Article 4 of the Act (this does not conflict with the plaintiffs) and there is no regional substitution for the purpose of operating the CATV broadcasting business; ② if the plaintiffs are the exclusive supplier of the CATV broadcasting service market supplied in Gangseo-gu Seoul Metropolitan City, and the plaintiffs are in a position to determine, maintain and change the terms and conditions of the transaction of the plaintiffs' price, etc., and it is difficult to apply the market price of the plaintiffs to the area of Gangseo-gu area with the market share increase in the market of Gangseo-gu area as stated in Article 2 subparagraph 7 of the Act.

However, as alleged by the plaintiffs in this case, the trading structure of the paid market is divided into two different stages: ① the trading structure of the TV home shopping business operator, etc., ① the transactional structure of providing the transmission service of the program by providing the program to the platform business operator such as SO and using the broadcasting facilities (use of channels), ② the transactional structure of the platform business operator such as the PP and SO, and ② the transaction process of transmitting the program supplied by SO to the subscribers in the region under his/her jurisdiction (or receiving the subscription fee or the receiving fee), namely, the distribution of the program supplied by SO to the subscribers in the region under his/her jurisdiction (which is divided into two different stages, the relationship between the platform business operator and the citizens in his/her region. Thus, the interpretation of the PP, our home shopping business operator and SO, etc., which are the subsequent market separate from the transmission market, does not immediately become a major business operator in the previous market, and whether the major supplier in the market is directly providing the user with the program and using it in the nationwide market through which the market is supplied.

In conclusion, it is the interpretation of the current law that the abuse of market dominant position is the case where not only the market dominant enterpriser's control but also the transfer of his control in the prior or next adjacent market (transfer of control) and unreasonably interferes with the activities of other enterprisers in the market. The reason is as follows.First of all, the law adopted the general rule such as abuse of market dominant position, and the act of unreasonably interfering with the business activities of other enterprisers unlike the wording of Article 3-2 subparagraph 3 of the same Act concerning the exclusion of "competitive enterprisers" is "the act of unreasonably interfering with the business activities of other enterprisers" and it is not necessary to limit it to the "competitive enterprisers of the same market". In the above case, it is the legislative purpose of regulating fair competition as an act detrimental to the fair competition (in Germany and Japan with similar regulatory form, it also constitutes abuse of market dominant position under Article 23 (1) subparagraph 4 of the Act, which constitutes an abuse of market dominant position under the general rule, but in particular, it constitutes an abuse of market dominant position under Article 3-2 of the Act.

- (2) In determining whether the act falls under the abuse of market-dominating positions, and whether the act is a legitimate act under the laws and regulations, Article 3-2 (1) 3 of the Act provides that the production, finance, sales activities, etc. of other enterprisers shall be comprehensively taken into account, but it shall include cases where business activities are likely to be difficult. The above notice by the Fair Trade Commission is a "act that makes it difficult for other enterprisers to engage in business activities." (1) An act that unfairly restricts the quantity or contents of goods or services to be traded with a specific business operator, (2) an act that presents unfair terms and conditions that are not reasonable in light of normal business practices, or unfairly discriminates against the other party to the transaction, (3) an act that unfairly restricts the transaction or acts that are disadvantageous to the other party to the transaction (see the above notice by the Fair Trade Commission).

In this case, as seen above, the plaintiffs are market-dominating enterprisers in the 6-level integrated home delivery market, and as long as the 6-level integrated home delivery service provider, such as Korea home delivery business entity, is bound to purchase the plaintiffs' programs within the Gangseo-gu area for their own sale, there is no doubt that the plaintiffs, who are exclusive suppliers of the adjacent markets, agreed to the above 6-level integrated home delivery service contract terms and conditions (see, e.g., the above 10-year integrated home delivery contract terms and conditions) were no more than 6-level integrated home delivery contract terms and conditions than the 6-level integrated home delivery contract terms and conditions, and the remaining 4-level integrated home delivery business entities (for example, the integrated home delivery contract terms and conditions were changed from 10-year to 12 channels) were no longer likely to cause any change in their existing home delivery service terms and conditions.

Furthermore, “Justifiable act” referred to in Article 58 of the Act means a necessary or minimum act conducted within the scope of an order of free competition in a business which requires high level of public regulation from the perspective of public nature, etc. (see, e.g., Supreme Court Decisions 2004Du558, Jun. 2, 2006; 2004Du3304, Jan. 11, 2007). In this case, the Hague integration is based on government policies for the overlapping investment in composite cable broadcasting facilities, operating expenses, and efficient use of human resources, and it is difficult for the plaintiffs to unilaterally consider that the Hague integration was conducted in connection with the implementation of the Vice Minister’s legitimate permission, and there is no need or change of channels from the perspective of public nature to the extent that it is recognized as an act of free competition within the minimum scope of the terms and conditions of the terms and conditions of the business operator’s exclusive use of the aforementioned Act, as seen above. However, it is difficult for the plaintiffs to recognize the change of the terms and conditions of the Act within the scope of its existing regulations.

Ultimately, the above act of changing the plaintiffs' channel constitutes "an act of unfairly interfering with the business activities of other business entities" under Article 3-2 (1) 3 of the Act, and applying the provisions of Article 5 of the Act, the defendant's disposition that issued an order for correction and publication as stated in the separate sheet against the plaintiffs on March 28, 2007 is legitimate, and the amount of the penalty surcharge calculated by the defendant is not also illegal.

3. Conclusion

Therefore, the plaintiffs' claim of this case seeking the revocation of the disposition of this case is dismissed as it is without merit. It is so decided as per Disposition.

Judges Kim Jong-dae

Judges Lee Young-jin

Judges Gangseo-Appellee

A person shall be appointed.