The Korea Fair Trade Commission (“KFTC”) determined that 11 feed producers, which account for about 40% of the Korean feed market, had colluded, fixing average feed price increases/decreases and the timing of increasing/decreasing the feed prices on 16 occasions in total between 2006 and 2010. During the foregoing alleged collusions, at least three producers were found to have filed a leniency application. Kim & Chang represented some of the feed producers during their appeal seeking revocation of the KFTC’s sanctions before the Seoul High Court and the Supreme Court of Korea.

In an oligopolistic market, price parallelism often appears even without any collusion, due to price competition among the players. It is also easy to invite suspicion of collusion if the players establish an association and meet on a regular basis for a group purchase of raw materials, as happened in this case. Also, if some players file for leniency, it is very difficult for the other players to be cleared of collusion allegations.

Kim & Chang succeeded in proving that there had been no price agreement beyond information sharing, based on the status of the attendees of the meetings where the KFTC alleged the companies had colluded, price changes before and after the collusion meetings, analysis on different industries that the attendees engaged in (i.e., feed for cows, pigs, and chicken), analysis on price differences compared to the non-attendees, among others. The High Court and the Supreme Court rejected the KFTC’s allegations in their entirety, resulting in the revocation of all administrative surcharges and corrective orders imposed by the KFTC.
 
This case has value as a precedent as it clearly made, in an oligopolistic market context, a distinction between illegal collusion and permissible information sharing that does not amount to collusion.