The method of determining whether a collaborative act constitutes “competitive competition” as prescribed by Article 19(1) of the Monopoly Regulation and Fair Trade Act / In the case of a price collusion agreement, whether a collaborative act can recognize the restriction on competition even if the accurate market share of the participants in the collaborative act did not periodically calculate the relevant regional market (affirmative in principle)

Article 19(1) of the Monopoly Regulation and Fair Trade Act

Supreme Court Decision 2012Du19298 Decided November 14, 2013 (Gong2013Ha, 2256)

Plaintiff 1 and one other (LLC, Kim & Lee LLC, Attorneys Yoon Sung-chul et al., Counsel for the plaintiff-appellant)

Fair Trade Commission (Government Law Firm Corporation, Attorneys Lee Dong-hwan et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012Nu18419 decided April 10, 2013

All appeals are dismissed. The costs of appeal are assessed against each party.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate brief filed).

1. Regarding the plaintiffs' grounds of appeal

A. Regarding ground of appeal No. 1

(5) The lower court, based on its adopted evidence, found the following: ① on April 30, 201, the Enforcement Decree of the Road Traffic Act and the Enforcement Rule of the Road Traffic Act (amended on June 10, 201) were amended on April 30, 201 to enable the above-mentioned citizens to obtain a driver’s license at the low cost; ④ on the basis of the first-class ordinary license, the compulsory education hours for acquiring a driver’s license at a driving school are changed to 8 hours in total, including 15 hours in office, 10 hours in road, 6 hours in road driving, etc.; ② on the basis of the 11th and 10 items in the National Association of Automobile Driving Schools (hereinafter referred to as the “Seoul Association”), the lower court found that the above-mentioned Seoul Specialized Driving Schools Association and the Seoul Specialized Driving Schools Association (hereinafter referred to as the “Seoul Specialized Driving Schools”) prepared on May 16, 2011 to present their opinions on the future operation of the Driving Schools and the Seoul Specialized Driving Schools (hereinafter referred to the “Seoul Association”).

In addition to these facts, the lower court determined that the 7 business entities, including the Plaintiffs, agreed on May 16, 201 to set the tuition fees (including examination fees) for basic-type goods (including examination fees) of which the total eight hours are the minimum statutory compulsory education hours, referring to the standards set in the operating plan of the instant case, as the number of basic-type goods, including the Plaintiffs, is set on the line, in consideration of the fact that the amount of tuition fees for each driving specialized driving school is anticipated to reduce revenues, while the service provided by each driving specialized driving school would act as an important discrimination factor due to the dynamic fault.

In light of the relevant legal principles and records, the above judgment of the court below is just, and there were no errors by misapprehending the legal principles on the establishment of unfair collaborative acts or by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules

B. Regarding ground of appeal No. 2

In order to determine whether a collaborative act constitutes an unfair collaborative act under each subparagraph of Article 19(1) of the Monopoly Regulation and Fair Trade Act, first of all, the relevant market, which is the object of trade, can be determined with respect to a certain area of trade at issue. Considering the diversity of unfair collaborative acts, efficiency and rationality of such regulations, it cannot be necessarily required to undergo empirical economic analysis when defining a market related to such collaborative act. Even if a market is demarcated without such economic analysis, the determination of the propriety of the relevant market based on the type and specific contents of the collaborative act at issue, the economic effect from which it can be inferred, the general transaction reality of goods or services subject to the collaborative act, etc. (see, e.g., Supreme Court Decisions 2013Du2471, Nov. 27, 2014; 2013Du1676, Jun. 11, 2015).

The lower court determined that: (1) 11 specialized driving schools in the Seoul metropolitan area at the time of the instant collaborative act are located in areas other than Seoul; (2) driving specialized driving schools are operating shuttle buses in neighboring areas including areas where a private teaching institute is located to secure students; (3) part of the Gyeonggi-do areas adjacent to Seoul specialized driving schools, such as Sungnam-si and Seocheon-si, are located in Seoul; (4) the number of registered students of specialized driving schools in the Seoul metropolitan area are living in Seoul metropolitan area to secure students; (6) the number of registered students of specialized driving schools in the Seoul metropolitan area can easily be seen as residents of Gyeonggi-do who are adjacent Seoul metropolitan area; and (5) the number of registered students of specialized driving schools in the Seoul metropolitan area is more likely to have been residing in the Seoul metropolitan area than the Gyeonggi-do area of the Seoul specialized driving school; and (6) the number of registered students of specialized driving schools in the Seoul metropolitan area is more likely to have been residing in the Gyeonggi-do area and the Gyeonggi-do area of the Seoul specialized driving school.

In light of the above legal principles and the records, even if the agreement in this case is deemed to be mainly in Seoul, while the related regional markets of the agreement in this case include some areas of Gyeonggi-do, it can not be denied the restriction on competition that can affect consumers living in some areas of Gyeonggi-do, such circumstance alone is insufficient to determine that the restriction on competition of the agreement in this case can not be denied. Thus, the judgment of the court below is within the acceptable scope, and there is no error in the misapprehension of legal principles as to the determination of the regional market and the restriction on competition in relation to unfair collaborative acts, or in violation of logical and empirical rules, or in violation of the principle of free evaluation of evidence.

2. As to the Defendant’s ground of appeal

According to the reasoning of the lower judgment and the evidence duly admitted by the lower court, ① the Enforcement Decree and the Enforcement Rule of the Road Traffic Act as amended at the time of May 10, 201 was scheduled to enter into force on June 10, 201, ② new tuition fees system was scheduled to enter into force on the above date; ② the remaining entrepreneurs except for those who initially reported tuition fees in the vicinity of KRW 470,00 as agreed in May 1, 200, reported the change of tuition fees to Seoul Regional Police Agency by 410,00 to KRW 442,00, and the reported price was reduced by 147,50,000, which was lower than 16,000, which was lower than 46,000, which was the first 7,000, which was the first 46,000, which was the first 7,000, which was the first 46,000, which was the first 7,011.

In light of these circumstances, it is reasonable to view that the instant collaborative act was terminated as it was without actually being executed on or around June 11, 201. However, on the basis of the fact that the instant collaborative act continued until March 9, 2012, the Defendant’s calculation of the penalty surcharge against the Plaintiffs and the disposition ordering the payment of the penalty surcharge is unlawful.

Although the reasoning of the lower judgment is partly inappropriate, the conclusion of the lower court’s revocation of the order to pay the penalty surcharge on the ground that the collaborative act in this case ends on June 11, 2011 is justifiable. In so doing, it did not err by misapprehending the legal doctrine on the termination of the collaborative act, or by omitting judgment, which affected the conclusion of the judgment.

3. Conclusion

All appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-bok (Presiding Justice)