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KFTC Finds No Evidence of Collusion in the Pricing of Four Vehicle Importers’ Car Parts, New Car Release Date Schedule and Promotion Plans

30 Jan 2018

On January 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 four vehicle importers (the “Respondents”) in their prices of car parts, new car release date schedule and promotion plans. 


Background:


Initially, the KFTC claimed that the Respondents engaged in price-fixing based on their exchange of information on the latest sales figures, current inventories, new car release date schedules, promotion plans, and prices of car parts.


However, despite the finding of price information exchange among the Respondents, the KFTC eventually decided they did not violate the FTL, because such exchange, in and of itself, would not be sufficient to establish an anti-competitive agreement prohibited under the FTL (i.e., an agreement to decide, maintain or amend prices in a manner that improperly restrains competition). 


Significance:


Going forward, this decision is expected to serve as the guidance on how proper information exchange should be carried out among competitors on issues commonly faced by the industry.


The KFTC’s decision takes into consideration the Supreme Court’s December 19, 2016 Decision (Case No. 2016Du31098), which states that “the act of exchanging information on sales prices and records amongst seven large-scale commercial trucks, in and of itself, does not amount to an act of collusion.”  That is, the KFTC’s decision makes it clear that information exchange (even on important matters such as prices) alone is not enough to prove the existence of collusion unless there is evidence showing reciprocity among the Respondents (e.g., joint determination of price) and anti-competitiveness of the agreement. 


Our Representation:


Over the course of five years, Kim & Chang represented the Respondents from the commencement of the KFTC’s investigation to assisting them in a number of dawn raids, interviews of summoned officers/employees, preparation and production of extensive documentation, and submission of opinion briefs on multiple issues. 


Eventually, our team persuaded the KFTC to rule in favor of the Respondents through our technical expertise in price fixing cases involving information exchange (including in-depth legal analysis and extensive research into precedents) and top-notch advocacy with a business savvy approach.