SOUTH KOREA Trends and Developments Contributed by: John H. Choi, Changhun Lee, Hyunah Kim and Jae-Hyuk Choi, Shin & Kim
Throughout the KFTC investigation and hearing, the carriers maintained that their conduct was in line with binding regulation issued by the Korea Communications Commission (KCC) under the Mobile Device Distribution Improvement Act. The KCC also defended the carrier’s conduct, asserting that the sales incentive adjustments were made in compliance with its guidance and did not constitute cartel conduct restricting com - petition among independent businesses. It fur - ther emphasised that, under its strict regulatory oversight – including its prior sanctions for non- compliance – the carriers lacked any incentive to collude. However, the KFTC concluded that the carriers’ agreement exceeded the bounds of KCC’s administrative guidance and amounted to anti-competitive collusion under the MRFTA. The KFTC found that the conduct could not be justified under the KCC’s regulatory framework and warranted antitrust enforcement under the MRFTA. Following the decision, the carriers expressed their disappointment and have reportedly indi - cated plans to pursue legal action. Meanwhile, the KFTC also reviewed whether the Korea Association for ICT Promotion – an affili - ated organisation under the KCC and Ministry of Science and ICT – had engaged in cartel con - duct alongside the carriers. However, the KFTC plenary session found no violation and decided to close the hearing procedure with respect to the Association. Recent Significant Court Decisions Related to Cartels In South Korea, administrative lawsuits chal - lenging decisions by the KFTC fall under the exclusive jurisdiction of the Seoul High Court as prescribed by the MRFTA. Unlike standard litiga - tion, which follows a three-tiered court system
comprising the district court, high court, and Supreme Court, administrative lawsuits against the KFTC are adjudicated under a two-tiered court system. These cases are heard initially by the Seoul High Court, with final appeals directed to the Supreme Court. Duck meat processing companies case The KFTC determined that an agreement among duck meat processing companies concerning the price and production volume of fresh duck meat constituted a cartel. Company A and Com - pany B, both implicated in the same cartel case, filed separate appeals against the KFTC’s deci - sion before the Seoul High Court. However, the two Administrative Divisions of the Seoul High Court handling the respective cases reached conflicting conclusions: the KFTC’s decision was cancelled in the case of Company A, while it was upheld in the case of Company B. In particular, the two Divisions diverged in their assessment of whether production volume restriction agree - ments in the agricultural and livestock sector constitute an unfairly restriction of competition. Both rulings have been appealed to the Supreme Court and are currently pending. KFTC’s decision In its 2022 decision, the KFTC imposed remedial orders and surcharges on nine duck meat pro - cessing companies for agreeing on and imple - menting co-ordination regarding the pricing and production volume of fresh duck meat from 2012 to 2017. According to the KFTC, the collusion was mainly carried out through various meetings and telephone communications within the Korea Duck Association, an industry association. The companies agreed to limit the production of fresh duck meat by reducing the number of ducklings or discarding duck eggs. They also agreed to raise prices and set an upper limit on discounts for fresh duck meat. The KFTC also imposed
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