Newsletter | May 2014, Issue 2
	Technology, Media & Telecommunications
	Appeals Court to dismiss claims filed by distributors of a mobile telecommunications company
	On March 20, 2014, the Seoul High Court dismissed most of the claims made by six LG Uplus (“LG U+”) distributors against LG U+ in a complaint for damages, in which they alleged that LG U+’s practice of imposing sales targets violated the Monopoly Regulation and Fair Trade Act (“MRFTA”) and harmed their businesses.  The Seoul High Court reasoned that (i) LG U+’s various business policies for distributors are not unfair business practices under the MRFTA since they constitute ordinary trade practices for encouraging distributors to attract new subscribers and (ii) even if they did impose sales targets, the distributors failed to provide sufficient evidence that their businesses were harmed by the sales targets, and even if there was harm, such harm cannot, on its own, be viewed as damages caused by an unfair business practice.
	In reaching this decision, the Seoul High Court essentially overruled the Seoul Central District Court’s decision, rendered on September 27, 2012, which had (i) concluded that LG U+’s practice of imposing sales targets violated the MRFTA and (ii) awarded damages pursuant to the “gist of all arguments” approach and Article 57 of the MRFTA by solely relying on the distributors’ unsubstantiated submissions on the alleged damages inflicted on their businesses.  The Seoul High Court’s decision is also significant because it clarifies the standard for differentiating between sales targets that are unlawful under the MRFTA and ordinary trade practices, as well as the scope of Article 57 on calculating damages.  In light of growing concerns toward abuse of superior bargaining power and recent allegations of MRFTA violations directed at companies that have taken measures to maintain their distribution networks, this decision is expected to be a helpful guide on what constitutes a lawful, ordinary business practice.
	Kim & Chang was retained for the appeal after another major law firm failed to obtain a favorable decision by the lower court.  Through its extensive fact-finding and legal arguments, Kim & Chang successfully persuaded the Seoul High Court to overturn the Seoul District Court’s ruling.
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