SOUTH KOREA Trends and Developments Contributed by: Sang Oh Jeon, Hee Jae Lee, Chiyeol Kim and Seokmin Song, Yoon & Yang LLC
promotional campaigns that advertised items such as Nintendo Switch consoles priced at KRW999 for only one customer on a first-come-first-served basis, while deceptively implying that multiple customers could receive the promotional item. Criminal Litigation Involving KFTC Referrals Yogiyo case The KFTC referred Yogiyo operator Wesang for criminal prosecution regarding alleged coercion of restaurants to adopt its lowest-price guarantee policy. However, both the first instance and appellate courts acquitted Yogiyo. The courts found it difficult to conclude that Yogiyo intended to cause unjust harm to restaurants, considering that the lowest-price guarantee allowed consumers to order without concerns about overpay - ing, thus contributing to growth of the food delivery market, and that without such a guarantee, it would be difficult to maintain a commission-based fee system favourable to smaller restaurants compared to a fixed monthly fee system. The Supreme Court subsequently affirmed Yogiyo’s acquittal by dismissing the govern - ment appeal. Scrap steel purchasing cartel case The KFTC imposed a remedy and a total fine of KRW300 billion against seven steelmakers for col - luding on scrap steel purchasing base prices through exchanges of information, and referred four of the companies to the prosecutors’ office. However, the first instance and appellate courts acquitted the steelmakers. Although the steelmakers had exchanged information on scrap steel inventory levels and incoming volumes, the courts found insuf - ficient evidence to conclude the existence of explicit or implicit agreements to fix or adjust the level or tim - ing of price changes. The courts noted that simulta - neous price increases merely reflected a “conscious parallelism,” as one steelmaker’s initial price increase to secure inventory prompted others to follow. The courts also reasoned that the complexity of the scrap steel market, involving numerous market participants, made secret co-ordination practically impossible and that large-scale special purchases frequently occurred independent of base prices. Therefore, the courts determined that the charges had not been proven beyond a reasonable doubt. However, considering
subsequent administrative court rulings upholding the KFTC’s fines against certain steelmakers, it remains to be seen whether the acquittals will be upheld by the Supreme Court. This ruling is significant in clarifying the legal boundary between conscious parallelism and unlawful collusion. The courts found it insufficient to establish unlawful collusion based solely on simultaneous price increas - es, absent clear evidence of explicit or implicit agree - ments to jointly determine or adjust prices. This case predates the MRFTA amendment explicitly prohibiting The KFTC initiated an on-site investigation into alle - gations that the Cargo Truckers Union, established by cargo trucking operators, engaged in prohibited conduct as a business association under the MRFTA by collectively deciding and implementing a refusal to transport cargo while demanding the abolition of the sunset clause of the “safe trucking freight rates system”. The Cargo Truckers Union, however, blocked entry to its premises, thereby obstructing the on-site investigation, and communicated its refusal to com - ply with the investigation through its representatives. The KFTC subsequently referred the Cargo Truckers Union to the prosecutor’s office for obstruction of its investigation. The trial court acquitted the Cargo Truckers Union, recognising that the Union simultaneously possessed characteristics of both a business association and a labour union. The court determined that the refusal to transport cargo was collective action regarding work - ing conditions, rather than terms of trade, because the aim was to establish a minimum freight rate to prevent cargo operators or shippers from setting excessively low rates. Thus, the court held that the Cargo Truck - ers Union’s collective refusal constituted lawful labour action under the Trade Union Act, falling outside the MRFTA’s regulatory scope, and refusal to comply with the KFTC’s on-site investigation did not constitute obstruction under the MRFTA. information exchange cartels. Cargo Truckers Union case This ruling is significant as it sets forth clear criteria to determine whether the conduct of an organisa - tion having dual characteristics as both a business
195 CHAMBERS.COM
Powered by FlippingBook