2014Du939 Cancelling corrective action, etc.

Korea Ecuate Co., Ltd.

Fair Trade Commission

Seoul High Court Decision 2012Nu24339 Decided December 4, 2013

January 14, 2016

The judgment below is reversed, and the case is remanded to Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 19(1) of the Monopoly Regulation and Fair Trade Act (hereinafter “Fair Trade Act”) prohibits “agreement on an act of unfairly restricting competition”, and such agreement includes not only explicit agreement but also implied agreement. The essence of the agreement is that two or more enterprisers communicate with each other. As such, it cannot be deemed that there was an agreement as a matter of course on the ground that there was an external appearance consistent with the act listed in each subparagraph of the above provision exists, but it can be deemed that there was an agreement between the enterprisers, if there is a proof of circumstance to acknowledge the reciprocity of communication (see, e.g., Supreme Court Decision 2012Du17421, Nov. 28, 2013).

In addition, in a case where competitive enterprisers exchange information on major competitive factors, such as prices, the exchange of information may serve as a means to facilitate or facilitate collusion by removing uncertainty on the decision-making of price, etc., and thus, such exchange of information may serve as a valuable material to recognize the reciprocity of communication among the business entities. However, even so, it cannot be readily concluded that there exists an agreement on an act of unfairly restricting competition solely based on the fact that the information is exchanged. Whether there exists an agreement on an act of unfairly restricting competition should be determined by comprehensively taking into account all the circumstances, such as the structure and characteristics of the relevant market, the nature of the exchanged information, the subject and timing and method of the exchange of information, the purpose and intent of the exchange of information, the degree of consistency or difference between the business entities, such as the price and output after the exchange of information, the process and contents of the decision-making, and the impact of the exchange of information on the market (see Supreme Court Decision 2013Du16951, Jul. 24, 2014).

2. (1) The court below, based on its adopted evidence, shall consult with other companies, including the plaintiff, if the plaintiff, the farming court, the Gyeyang Food Co., Ltd. (hereinafter referred to as "the plaintiff, etc.") makes and sells Eul, if the plaintiff, etc. (hereinafter referred to as "the plaintiff, etc.") produces and sells Eul, and if the plaintiff, etc. is a representative meeting held at the end of December 200 or at the beginning of January 2001 (hereinafter referred to as the "representative meeting"), after exchanging opinions as to the price increase first, it shall be decided to follow the above provision, and if the farming court increases the price first, it shall be 10% of the average price of the agricultural container at the 20th regular meeting (hereinafter referred to as "council"), 20% of the price increase at the 19th regular meeting (hereinafter referred to as "2nd regular meeting"), 3rd regular meeting (hereinafter referred to as "Council") and 10% of the average price at the 2nd regular meeting, 201.

(4) If the plaintiff et al. increases the price on July 1, 2001, then the average increase rate was 12.0%, 9.7%, and 10.5%, and in particular, the ex-factory price of each company was 322 won, taking into account the fact that the plaintiff et al. conducted price increase over five times from October 2002 to February 201, the plaintiff et al. determined that the average increase rate of price of current products was equal or similar to that of the plaintiff et al. (hereinafter referred to as "two to six price increase"), and (5) the plaintiff et al. continuously exchanged important information, such as the date on which the price increase was made during that period, price increase, and price increase by the plaintiff et al. (hereinafter referred to as "price increase by the second to nine (1) price increase by the plaintiff et al., the price increase by the second to nine (2) price increase by the second (1) price increase by the plaintiff et al.

3. However, we cannot accept the judgment of the court below for the following reasons.

A. According to the reasoning of the lower judgment and the record, the following circumstances are revealed. (1) A was a person who was directly present at the meeting of the representative, and a person who was discussed at the meeting of the representative from the network B, was not only A at the time and EF at the time, but also there was no direct evidence containing the network B’s statement. (2) The statement written by D was written to the effect that: (a) it was stated that, at the meeting of the representative meeting on behalf of the principal, it would not be able to raise the price if “I would not come up with this low story at the meeting of the representative; and (b) I would like to agree with raising the price at the first time.”

(3) In addition, F’s statement is written that there was no special talk at the meeting of representatives from the network B, and that the price was set at between 2 and 3 years, which would have been flicked by the first round of the trial.

(4) After the so-called 'IMF remedy finance' was raised in the early 1998, the price increase had not been made more than 3 years until the representative meeting despite the increase in expenses, so it seems that the price increase was a pending issue in the industry at the time of the representative meeting. (5) On the other hand, if the Council gives direct evidence of the contents discussed at the Council, it is the only G G statement that directly attended the meeting and talk about the price increase. If at the time of March 28, 2001, the minutes of the Council contain a signature of other person than the signature of G, and if at the time, a letter of delegation was attached to the effect that all voting rights to be held at the ordinary meeting should be delegated to H. Accordingly, G did not know the above contents of the lawsuit, such as Seoul High Court No. 2012Nu2423 and No. 2423, etc., which was raised against the defendant, the statement made in the court below's letter of delegation as stated in the above 201.

(6) If the price increase by the two enterprises even prior to the 1980s, including the 1980s, which occupied the 2nd line of the industry, it appears that the rest of the enterprises would have been closely related to the government's control over the price. If the Government has held a price increase in the manner of setting the outline upper limit on one product representing the first company in the market share, the average increase in the price was 8.5% to 9.5%, and the average increase in the 5th price at the 5th price was 6.5% to 6.0% to 8.0% to 8.0%, the average increase in the 5th price at the 5th price was 6.0% to 6th 5% to 13.5% to 13.5% of the average increase in the prices at the 6th 6th o.e., the Plaintiff's products at the 6th o., the second or 6th o.b., the 3th o.

B. At that time, the Gu supported the Gu, despite the increase of the price on March 1, 2007, the period of support was less than 10 days. In addition, at the beginning of 2004, the Gu supported the ex-factory price, and the Plaintiff appears to have supported only 50% of the Gu. According to the internal part of the 2007 market, it can be confirmed that the price policy was reviewed in the direction of enhancing the share of the 2,3-month price compared to the competitor and implementing the discriminatory price policy for each product, based on the industry and consumer trends around 2007. According to the Plaintiff’s internal part of the 2004 and 205 market, the Plaintiff also established a strategy to late the price increase or to provide support for the distribution network in response to the competitor’s price strategy.

B. In light of the aforementioned legal principles, as to whether the agreement in this case was established or not, D and F’s statements, which are evidence of the agreement in this case, are all professional statements, and the contents discussed in the circumstances of the meeting of representatives are not correct. Thus, the possibility that if the price was not raised for a long time, there is only a atmosphere leading the price in the first time in the situation of raising the price at the time, it cannot be ruled out that there was a possibility that there was only the atmosphere leading the price in the first place. In addition, there is a difference in the average rate of price in the case of each company, and it is difficult to specify the contents of the agreement in addition to the fact that the price should be increased in the year 201.

(2) In addition, since the content of G’s statement, the only direct evidence for the contents discussed at the Council, is likely to not directly experience, it is difficult to grant credibility entirely. (3) Therefore, even if there was an agreement on one price increase, it is unclear about its content, and it is difficult to deem that there was a clear agreement that may affect competition for a long time, and thus, it does not constitute a basic agreement that serves as the basis for the exchange of information in the future. Accordingly, it cannot be said that there was an agreement on the subsequent information exchange and each price increase, and it cannot be said that there was an implied agreement on the extension of the first agreement, just because there was an agreement on the subsequent information exchange and each price increase, it cannot be said that there was an implied agreement on the part of the mere information exchange. Therefore, the formation of the agreement in this case can be recognized.

(4) However, as seen below, it is difficult to sufficiently explain the inducement, etc. of an agreement without the premise of the agreement, and some circumstances seem to be contrary to the act of a business entity that is difficult to be compatible with the agreement or the existence of the agreement. In addition, it is unclear whether the average discount rate for each business entity is somewhat different and the average discount rate for the prices of individual products can be recognized as "an accord with external appearance because the upper limit of the prices of individual products is diverse." In this regard, the evidence on each information exchange is insufficient to see the other materials submitted by the Defendant as evidence of the agreement on two to six prices.

① Since before 2001, there have been long-standing practices for competitors to increase their prices by drilling their prices, and once the price was set as a whole in 2001, if the agricultural trial was leading in accordance with the previous practices, it would be sufficient for other business entities to raise their prices by referring to this. Therefore, it is difficult to view that the Plaintiff, etc., etc., was enticed to make a separate agreement with respect to at least 2 through 6 prices.

② While the government has been under de facto control over the price increase even when it was under control, it is reasonable to make a reasonable choice to decide on the price level that the deaf court has consulted with the government, and the deaf court could have sufficiently predicted this point. In addition, considering the long-term practices of the price trend, the deaf court, where the market share reaches 70% after the price increase, need to separately agree with the competitors. Therefore, it is difficult to deem that there was a need to use the means of “agreement” in order to lead the deaf-mute and to form the price in the form of a confluence by other enterprisers.

(3) It is difficult to view that, even as the business entity was the first-class business entity of the market share, with the experience of forming the market share in the agricultural industry, it was difficult to view that the long-term incentive for price collusion, which makes it possible to boost the existing market share.

④ It seems difficult for the Plaintiff, etc. to agree on the price for each item because the product type is very diverse. In particular, it cannot be said that there was an agreement between the Plaintiff, etc. to accept the delivery price for the main product because the Plaintiff’s main product was not a “ king”.

⑤ Not only in the case of agriculture and forestry, but also in the case of other enterprisers, if there exists an agreement, such as delaying the price increase time in response to the price strategy of competitors or providing various support, such as support by the Gu for the distribution network, it may be difficult to see the circumstances that may arise. The Gu’s support may be used as a means of maintaining or suppressing collusion, but at the same time, it may be used as a means of active mutual competition as above, and the effect of increasing uncertainty may increase accordingly, may be a means hindering the maintenance of collusion.

(5) The Plaintiff et al. exchanged various information including long-term price information and reflected it in their decision-making can be deemed to have the effect of restricting competition. However, in addition to whether an information exchange agreement under the Fair Trade Act can be applied to an unfair collaborative act, the exchange of information itself cannot be acknowledged as an agreement on determining and maintaining the price immediately.

(6) If so, it is difficult to conclude that the agreement of this case or at least the agreement of this case 2 through 6 existed between the plaintiff et al.

4. Nevertheless, the lower court determined otherwise that the agreement of this case 1 and the agreement of this case 2 through 6 was recognized. In so doing, the lower court erred by misapprehending the legal doctrine regarding the establishment of an unfair collaborative act, by exceeding the bounds of the principle of logic and experience and by exceeding the bounds of the principle of free evaluation of evidence, or by failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

5. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ko Young-han

Justices Lee In-bok

Justices Kim Gin-young

Chief Justice Lee Ki-taik