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Newsletter | May 2014, Issue 2 |
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ANTITRUST & COMPETITION |
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Supreme Court Affirms Lower Court’s Decision on System Operator’s Abuse of Superior Bargaining Position |
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On February 13, 2014, the Supreme Court affirmed the lower court’s decision reversing the KFTC’s finding of abuse of superior bargaining position (coerced purchases) by some cable TV system operators (“SO”) and imposition of corrective measures and fines. The Supreme Court affirmed the lower court’s holding that the implicated SOs did not coerce the purchase of commercial time slots to program providers (“PP”). |
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In sum, the Supreme Court’s decision held that: |
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Unlawful coercion of purchases includes forcing objective circumstances that would inevitably lead to such purchases. |
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The Court does not find that there was coerced purchases given that: (i) it is difficult to find that the bargaining position of the five largest multiple program providers (“MPP”) are considerably different from those of the implicated SOs; (ii) the implicated SOs have not made any statements to the effect that they would provide disadvantages in channel allocation to PPs who refused to buy commercial time, and in fact, there is no direct evidence of such disadvantages provided to unwilling PPs; (iii) some witnesses who testified for the KFTC during the KFTC’s investigation have retracted or changed some of their statements during the administrative appeal process; (iv) it is difficult to find that the PPs did not want to buy the commercial slots; and (v) the prices for the commercial slots offered by SOs were markedly lower than the prices offered by ground broadcast operators or PPs. |
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The Supreme Court accepted the arguments put forward by the SOs that there was no unlawfully coerced purchase given the relationship between the parties and the surrounding circumstances. Kim & Chang represented the implicated SOs in this case. |
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