SOUTH KOREA Trends and Developments Contributed by: Sang Oh Jeon, Hee Jae Lee, Chiyeol Kim and Seokmin Song, Yoon & Yang LLC
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Introduction Over the past year, Korean courts have issued a series of noteworthy decisions on abuse of dominance. A handful of online platform operators have consolidat - ed market power through network effects, and the Korea Fair Trade Commission (KFTC) has correspond - ingly intensified its scrutiny of platform conduct that permeates consumers’ daily lives. In respect of cartel enforcement, the KFTC has com - pleted its first investigations under the 30 Decem - ber 2021 amendments to the Monopoly Regulation and Fair Trade Act (MRFTA), which expressly outlawed information exchange cartels. These cases involve the loan‑to‑value (LTV) ratio cartel and the government bond cartel, both of which are awaiting a vote by the full Commission. Courts, too, have delivered headline rulings, most notably the Supreme Court’s decision that affirmed the KFTC’s authority to regulate the ship - ping surcharge cartel. The continuing expansion of the e‑commerce sector has triggered a wave of sanctions and lawsuits under the E‑Commerce Act against music streaming ser - vices, foreign retailers and others. On the criminal front, several judgments have been rendered in cases referred by the KFTC. Among them, the Cargo Truckers Union ruling addressed the obstruction of a KFTC dawn raid, providing fresh guid - ance on the scope and limits of the agency’s investi - gatory authority.
Civil litigation for MRFTA violations is likewise gain - ing momentum. Shareholder derivative suits seek - ing director liability for MRFTA breaches continue to rise and are expected to accelerate following recent amendments to the Commercial Code. Investigations and Litigation Relating to Abuse of Dominance Siemens case Siemens is the market leader in the Korean CT/MRI equipment market and holds roughly a 95% share of the maintenance market, where it competes with independent service organisations (ISO). The KFTC imposed a remedy and an administrative fine of KRW6.3 billion against Siemens, finding that Siemens supplied the software “service key”, which is neces - sary for maintenance services, only to hospitals that dealt directly with Siemens, while charging a fee or refusing to supply it to hospitals using ISOs. The KFTC characterised this discriminatory condition of supply as an abuse of dominance that impeded the ISOs’ business activities. The Supreme Court, however, quashed the KFTC’s decision. The court held that, in determining whether a dominant company imposed unreasonable condi - tions on its counterparty to unfairly interfere with that party’s business activities, a trade practice inconsist - ent with current market practices may still constitute a “normal trade practice” if it is found to align with a sound competitive order. In this case, however, the court found that Siemens’s collection of fees for issu - ing the service key fell within its legitimate rights as a copyright holder, and there was insufficient evidence
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