[Plaintiff, Appellee] Kia Motors Corporation (Legal representative: Law Firm Sejong, Attorneys Lim Byung-il and 2 others)
[Defendant, Appellant] Fair Trade Commission (Legal representative: Law Firm (LLC) Logos, Attorneys Kang Wan-gu and 3 others)
[Lower Court Judgment] Seoul High Court Decision 2007Nu30897 rendered on September 11, 2008
[Order]
The appeal is dismissed. The costs of the appeal shall be borne by the Defendant.
[Reasoning]
The grounds of appeal are examined.
The unfairness of an act of interference with business activities as an abuse of a market-dominant position under Article 3-2(1)(3) of the Monopoly Regulation and Fair Trade Act (독점규제 및 공정거래에 관한 법률) must be interpreted in accordance with the legislative purpose of "promoting competition in a monopolistic or oligopolistic market." Accordingly, it is not sufficient to find such unfairness merely because a market-dominant enterprise interfered with the business activities of a particular counterparty in an individual transaction with wrongful intent or purpose, or because the particular enterprise suffered a disadvantage such as experiencing or being at risk of experiencing difficulty in conducting business as a result of such interference. Rather, unfairness can be recognized only where the enterprise, having the intent or purpose of maintaining or strengthening its monopoly in the market—that is, the intent or purpose of artificially affecting market order by restricting free competition in the market—engaged in an act of interference with business activities that can objectively be evaluated as an act carrying the risk of producing such anti-competitive effects.
Therefore, the Defendant, who asserts that a market-dominant enterprise's act of interfering with business activities constitutes an abuse of its dominant position, bears the burden of proving that the act of interference with business activities was an act carrying the risk of producing anti-competitive effects such as an increase in the price of goods, a decrease in output, an impediment to innovation, a decrease in the number of effective competing enterprises, or a decrease in diversity, and that there was intent and purpose with respect thereto. Where it is proven that such effects actually occurred as a result of the act of interference with business activities, it may be factually presumed that, at the time of the act, there was a risk of causing restriction of competition and that there was intent or purpose with respect thereto. However, where this is not the case, it must be determined, upon comprehensive consideration of various circumstances—including the background and motive of the interference with business activities, the manner of the act of interference, the characteristics of the relevant market, the degree of disadvantage suffered by the trading counterparty as a result of the interference, whether there was a change in price and output in the relevant market, and whether there was an impediment to innovation or a decrease in diversity—whether the act of interference with business activities was an act carrying the risk of producing the aforementioned anti-competitive effects and whether there was intent or purpose with respect thereto (see Supreme Court en banc Decision 2002Du8626 rendered on November 22, 2007; Supreme Court Decision 2007Du25183 rendered on December 11, 2008, etc.).
According to the reasoning of the lower court judgment, the lower court found as follows: the Plaintiff, a market-dominant enterprise in the domestic passenger vehicle sales market and the sales market for trucks (freight vehicles) of 5 tons or less, delayed or refused the applications of three sales agencies to relocate their business locations, citing failure to meet the required distance from directly-operated stores, opposition by the labor union, and the like, and as a result, the three sales agencies were found to have been interfered with in their business activities. However, the lower court determined that the Plaintiff's act of interference did not give rise to anti-competitive effects such as an increase in the price of goods, a decrease in output, an impediment to innovation, a decrease in the number of effective competing enterprises, or a decrease in diversity, and that there was no evidence to show that the Plaintiff engaged in the aforementioned act of interference with the intent or purpose of maintaining or strengthening its monopoly in the market. On these grounds, the lower court did not recognize the unfairness of the said act of interference with business activities, and ultimately determined that the Plaintiff's conduct did not constitute an unfair abuse of a market-dominant position.
Upon examination in light of the legal principles set forth above and the record, the lower court's determination is justified, and there is no error of law, such as a misapprehension of the legal principles concerning unfairness in relation to a market-dominant enterprise's act of interference with business activities, in the lower court's judgment.
Accordingly, the appeal is dismissed, and the costs of the appeal are to be borne by the losing party. This Judgment is rendered as set forth in the Order by the unanimous opinion of the participating Justices.
Justice Ahn Dae-hee (Presiding Justice), Park Si-hwan, Cha Han-sung, Shin Young-chul (Justice in charge)