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After a Six-year Investigation, the KFTC Finds No Evidence of Collusion Among a Vehicle Importer and Eight Dealerships

30 Mar 2018

On March 30, 2018, the Korea Fair Trade Commission (“KFTC”) declared no violation of the Monopoly Regulation and Fair Trade Law (“FTL”) in the case involving alleged collusion among a vehicle importer and its eight dealerships (the “Respondents”) concerning the pricing of hourly retail labor rate and the refusal to use third-party car parts.


Significance:


This decision clarifies the permissible scope of information exchange.  In particular, given that there is often no bright-line test for whether a certain type of communication among vertical and horizontal business partners is prohibited under the FTL as perpetrating a cartel (so-called “hub-and-spoke” conspiracy), the KFTC’s decision provides guidance on how a car importer and its dealerships should interact with each other going forward.


Our Representation:


Since the commencement of the KFTC investigation six years ago, Kim & Chang has been representing the Respondents from the beginning.  Our team has provided, among others, assistance in a number of dawn raids, interviews of summoned officers/employees, preparation and production of extensive documents, and submission of opinion briefs on multiple issues. 


Eventually, our team persuaded the KFTC to rule in favor of the Respondents through our top-notch advocacy with a business savvy approach, and technical expertise on price fixing cases involving information exchange.  We performed in-depth legal analysis and extensive research into precedents on whether a case amounts to collusion between enterprises in both vertical and horizontal relationship through a mastermind that perpetrated such hub-and-spoke conspiracy.