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Seoul High Court Revokes KFTC’s Administrative Fine Against a Steel Product Transport Company for Bid-Rigging


Kim & Chang represented a transport company (the “Complainant”) in its appeal before the Seoul High Court (“Court”) seeking annulment of a corrective order and administrative fine imposed by the Korea Fair Trade Commission (the “KFTC”) for allegedly rigging bids with other companies to transport steel products by agreeing on each company’s bid amount and share of products in advance.

The key issues in this case were (i) whether the KFTC had imposed an excessive fixed-amount administrative fine for a certain year, and (ii) whether the agreement among the companies could, in substance, be considered a consortium agreement, as this would lower the amount of the relevant sales revenue.  Representing the Complainant throughout the appeals process, Kim & Chang argued that: (i) where a fixed-amount administrative fine was imposed because of difficulties in calculating the relevant sales revenue for only a portion of several agreements that were made across multiple years, the fixed fine amount should have been set at a more reasonable level in consideration of the relevant sales revenue during the periods before and after the subject period; and (ii) the KFTC should have reduced the relevant sales revenue in calculating the appropriate fine for the other agreements because for each bid there were multiple winning bidders to whom the products would be allocated on a differential basis based on their specific bid amounts, making the agreements similar in substance to consortium agreements.

Based on extensive experience in successfully handling bid-rigging cases, our team provided the Court various materials demonstrating the illegality of (i) the KFTC’s imposition of the specific fixed-amount administrative fine, and of (ii) the KFTC’s failure to consider the consortium-like nature of the agreements in calculating the relevant sales revenue, ultimately succeeding in persuading the Court to revoke the administrative fine imposed by the KFTC.